AT Pollin and Luce / Reynolds Reject these studies they take into account potential disadvantages – don’t Neumark and Adams 03 David, prof of econ @ UCI, edits several journals, started several institutes. Scott, director of grad studies @ Wisconsin-Milwaukee, co-editor of Journal of Economic Behavior and Living Wage Ordinances Reduce Urban The Journal of Human Organization. “Do Poverty?” Resources, Vol. 38, No. 3 (Summer, 2003), pp. 490-521. [PDI] Pollin and Luce The best-known work on living wages is the book by (1998, hereafter PL). Although the primary purpose of this book argue that was to advocate living wages as a viable poverty-fighting tool, it is a useful starting point for research on the subject. PL living wage ordinances will deliver a higher standard of living for low-income families. They also posit that This work is problematic. First, such legislation will reduce government subsidy/transfer payments to working families.8 calculations regarding improved living standards and reduced subsidy/transfer PL’s payments are based on a family of four with a single wage earner, despite the facts (given in their that (i) only 42 percent of those earning at or below the Los Angeles living wage are the book) single wage earner in a family, and (ii) the average family size for these workers is 2.1, indicating that on average people potentially affected by living wages are not supporting a family of four. Second, PL do not attempt to estimate whether there are disemployment effects or hours reductions from living wages, but instead assume no such effects. If either results from a living wage increase, then some families may suffer potentially sizable income declines. On the other hand, it is no surprise that calculations based on raising wages of low-wage workers while assuming no employment or hours reductions will look In work cannot be viewed as short, PL’s beneficial to low-wage workers and to some extent to low-income families. reliable empirical evidence on the effects of living wages on low-income families. Despite this, calculations paralleling have been used to evaluate proposed ordinances in other PL’s cities (for example, Reynolds 1999). Not surprisingly, given the assumptions, these evaluations reach similar conclusions.
AT Pollin and Luce / Reynolds Reject these studies – they don’t take into account potential disadvantages Neumark and Adams 03 David, prof of econ @ UCI, edits several journals, started several institutes. Scott, director of grad studies @ Wisconsin-Milwaukee, co-editor of Journal of Economic Behavior and Organization. “Do Living Wage Ordinances Reduce Urban Poverty?” The Journal of Human Resources, Vol. 38, No. 3 (Summer, 2003), pp. 490-521. [PDI] The best-known work on living wages is the book by Pollin and Luce (1998, hereafter PL). Although the primary purpose of this book was to advocate living wages as a viable poverty-fighting tool, it is a useful starting point for research on the subject. PL argue that living wage ordinances will deliver a higher standard of living for low-income families. They also posit that such legislation will reduce government subsidy/transfer payments to working families.8 This work is problematic. First, PL’s calculations regarding improved living standards and reduced subsidy/transfer payments are based on a family of four with a single wage earner, despite the facts (given in their book) that (i) only 42 percent of those earning at or below the Los Angeles living wage are the single wage earner in a family, and (ii) the average family size for these workers is 2.1, indicating that on average people potentially affected by living wages are not supporting a family of four. Second, PL do not attempt to estimate whether there are disemployment effects or hours reductions from living wages, but instead assume no such effects. If either results from a living wage increase, then some families may suffer potentially sizable income declines. On the other hand, it is no surprise that calculations based on raising wages of low-wage workers while assuming no employment or hours reductions will look beneficial to low-wage workers and to some extent to low-income families. In short, PL’s work cannot be viewed as reliable empirical evidence on the effects of living wages on low-income families. Despite this, calculations paralleling PL’s have been used to evaluate proposed ordinances in other cities (for example, Reynolds 1999). Not surprisingly, given the assumptions, these evaluations reach similar conclusions.
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