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Living Wages & Communities: Smarter Economic Development, LowerThan Expected Costs
<br />End Notes
<br />1 Since 1994, more than one-hundred cities and counties have passed Eocal living wage Iaws, and seventy-
<br />five other communities are considering same Form of living wage legislation. ACORN Living Wage
<br />Resource Center, Living Wage Successes: A Compilation of Living Wage Policies an the Bool�s (available
<br />at+��•u• �� ti•i •i� • i�: t��r• r.�: i�,-i •�-�;' �•�t •� ��� =• ��=i f� (visited Apr. 16, 2003)). See Greg LeRoy, eC al., Good,Jo6s
<br />Firrs, 7"he Poliey ,� ;i; � to Good jobs: Cities, State,c and Counties Attaehing job Quality Standarc�s to Develop-
<br />meratSub.sidi�s (2000) (listing cities and counties with wage and benefit requirements as a condition of
<br />receiving saxpayer-funded subsidies).
<br />2 There is broad consensus aman� researchers and policymakers that the fcderal poverty 1e�e1 significantly
<br />understaYes the income that a low-income person needs in ardcr to obtain basic necessities. Developed in the
<br />late 1960's based on the assumption that a typical family spends one third of its income on Food, the federal
<br />poverty level calculates a subsistence standard by tripling the cost of a basic food budget. Because the poverty
<br />level does not directly reftecr the costs of actual necessities besides food—far example, housing, 1�ealnc�are,
<br />childcare and transportation—ithas become increasin�ly outdated as those other costs have seen substantial
<br />inflation over the past chi,�ty years. 5ee Heather Boushey, Chauna $rocht, Bethney Gundersen �C 7ared
<br />$ernstein, Hardships inAmerica.• The RealSrary of WorkingFanzilies, pp. 5-7 (Economic Policy Institute 2001).
<br />3 For example, a Dane County Department of Human Services memorandum states that the inability of
<br />human services orga��izations to pay competitive wages resulted in "difficulty in rectuiting qualified staff,"
<br />"high staff turnover," and "increased costs associated with staff recruitment and training." Dane County
<br />Department of Human Services, "Purchase of Service COLA and Living Wage," p. 1(7uly 2000).
<br />4 These reporting cities and counties were drawn fzom an inival list of 291ocalities identified as likely to
<br />have available cost impact estimates, formal internal evaluations, andlor other observations of the effects of
<br />their living wage laws. The following localities were contacted but could not offer any observations or
<br />reports on the impact of their living wage laws: Ann Arbor, Boston, Cleveland, Cook County, Detroit, San
<br />Fernando, St. Paul ant� Tucson, While Milwaukee had available some information on the impact of its liv-
<br />ing wage law, we did not include it because the city was unable to provide an estimate of the increase in
<br />the cost of its contracts as a result of the wage requirement.
<br />See, e.g., Robert Pollin & Stephanie Luce, The Living Wage Building a Fair Economy, pp. 112-14, 119, 121
<br />(1998) (predicting that, in �;t•:• t•� �I. the vast majority of contracts will increase in cost by less than 1%, and
<br />that con�ractors will absorb most of that cost); Bruce l�issen & Peter Catran, The Impact of a Living Wage
<br />Ordinanceon Miami-Dade Caunty, p. 22 (Ctr, for Labor Research & Studies, �[a. Int'1 Univ., Oct. 23,
<br />1998) (predicting that the county would pay between 35% and 55% of the increased labor casts). Butsee
<br />Douglass Williams t'C Richard Sander, An Empiricral �Inaly.ria � the Proposed Lor .��gr;r� Living Wage
<br />Ordinance, pp. 51-52 (7an. 17, 1997) (predicting that over the long-term, contractors will probably pass
<br />through most increased costs to the locality).
<br />6 See Mark Weis6rot & Michelle Sforza-Roderick, Baltimore's Living Wage Law: An Analy.si.s of the Fiscal und
<br />,�'conamic Corts of Balczmore's City Ordinance, p. 11 (Preamble Ctr. for Public Policy, Oct. 1996) (finding
<br />no increase in contract prices after the implemenration of Baltimore's living wage law); Christopher Niedt
<br />et al., The Ef�'ects of tbe Living Wage in Baltimore, p. 6(Economic Policy Inst, Working 1'a�er No. 119,
<br />Feb. 1999) (finding that contract prices decreased in real terms after implementation of living wage law);
<br />Richard Sander and Sean Lokey, The Lor An�eles Living Wage.• The Fzrst Eighteen Months, p. 8(�Iov. 16,
<br />1998) (finding that 56% of studied firms did not pass on any costs to the City, that 27% passed on all
<br />increased costs to the city, and that 17% of firms reduced services in tcsponsc to cost increases).
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