“Living Wage” Does Not Help

Suppose an unskilled worker is fortunate enough to retain her job with a government mandated “living wage” increase in pay and no reduction in any other job related benefits. Even in that case she is unlikely to gain much (if at all). The reason is that she loses government sponsored cash and in-kind transfers, offsetting the increase in pay.
Here (pp. 12-17) are my 2002 estimates of the loss of government transfers as pay increases.

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One Reply to ““Living Wage” Does Not Help”

  1. It will be interesting to track areas that have passed living wage initiatives (like Santa Fe; Santa Cruz, CA; Lansing, MI; Burlington, VT; etc.) to see how these communities’ long term prosperity and cost of living compare to other parts of the country.

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