Living Wage Ordinances: Maintaining Healthy Local Economies

Abstract

This paper discusses the failures of the minimum and prevailing wages along with the promise of a living wage. The minimum wage began to fail in the 1980's as the real value of minimum wage dropped to its lowest since 1968. The minimum wage lost its purchasing power and no longer provided workers the ability to live above the poverty level. The prevailing wage failed mainly due to its discriminatory ways. It did not favor black or other minorities in any way, nor did it provide a high enough wage to prevent workers from living in poverty. The living wage was first introduced in Baltimore, MD in 1994 and since then has gained popularity across the nation. Taking a closer look at the Baltimore, Los Angeles, and Chicago ordinances the living wage seems to have positive effects. The costs of living wage ordinances are also presented along with how companies may deal with the additional costs. These costs however, are outweighed by the benefits that the cities and employees experience, this is shown through several studies and through my collection of data of 87 cities and counties that have the living wage.