Living Wage Legislation

Abstract

The following project is a requirement for graduation from Kalamazoo College. The first part of the project focuses on a research issue. Poverty is becoming a major concern in the United States. However, poverty is not stemming from a lack of jobs, but a lack of high paying jobs. Local governments are trying to create ways to correct this problem. Living wage laws are a new policy tool used by municipalities to effectively increase income for low wage earners. This project attempted to find the causes that would lead municipalities within Metropolitan Statistical Areas (MSAs) to employ living wage legislation, and explore a cost/benefit analysis of their effects. The second part of the project was an in-depth empirical analysis of poverty and living wage legislation. Using United States Census data and data collected by Dr. Hannah McKinney, professor of Economics at Kalamazoo College, it was found that living wage laws have no real employment effects in MSAs. However, through .logistical regression analysis, social stresses increased the probability of living wage implementation in MSAs. These factors pertained to crime rates, educational attainment, fluency in English, and labor market characteristics.