Asheville Citizen-Times
| August 3, 2006
Section: EDITORIAL Edition: REGION Page: 5A STEVE AGAN READERS STORY |
| T The author of the letter, "Not sold on supposed benefits of a minimum wage hike," (AC-T, July 23), suggests that a living wage law for Asheville would cause job loss for the very people it is trying to help. There are, however, a number of empirical studies showing that an increase in the minimum wage does just the opposite -- that businesses directly affected by the new minimum wage standard showed an increase in the number of jobs they offered after the law went into effect. In the book, "Myth & Measurement: The New Economics of the Minimum Wage," by David Card and Allen B. Krueger (Princeton University Press, 1995), two Princeton economists conducted several studies of the real-world effect on increases in the minimum wage. The New Jersey study surveyed 410 fast food restaurants in New Jersey and eastern Pennsylvania and found that the rise in the state minimum wage actually increased employment in restaurants that were forced to raise pay to comply with the law. Another study, which was based on the 1991 increase in federal minimum wage, found that fast-food restaurants in Texas that were forced to increase pay had faster employment growth than did those restaurants not affected by the ordinance. In a recent article published by the Economic Policy Institute, entitled, "The economic impact of local living wages," the authors indicate that "Most of the available studies have concluded that there have been either no or only small employment losses as a result of adopting living wages." The authors note that in a 2005 study of the Boston living wage ordinance, little evidence of job losses was found. There was no significant difference in changes in employment between contractors who were forced to raise wages because of the law and those that did not have to raise wages. And, in an analysis of the living wage policy at the San Francisco Airport, researchers found that there was no evidence of employment losses due to the policy. Despite a recession-induced decline in airport activity during the period between 1998-2001, employment in jobs covered by the living wage policy rose by more than 15 percent during that period -- the same period in which the living wage policy was implemented. Those who argue that that "higher wages equals fewer jobs" often refer to studies conducted by Scott Adams and David Neumark. But their conclusions have been widely criticized as unreliable because their estimates of workers affected by the ordinance are overblown, and they utilized data that did not specifically study the workers and business impacted by the wage increase. Other researchers have gone through the more expensive and time-consuming -- but more reliable -- process of administering surveys targeted specifically at workers and businesses directly impacted by living wage ordinances. In addition to finding no significant job loss, these studies have found that living wage laws had a minimal effect on city budgets (less than one tenth of one percent in a detailed survey of 20 cities), reduced employee turnover for affected businesses (which saved them the cost of recruiting and training new workers), and, of course, raised the standard of living for many low-wage workers so that they could afford the basic necessities of life, such as food, transportation, clothing, health care, and housing. While the recent increase in the state minimum wage to $6.15 an hour is an important victory for thousands of North Carolina workers and their families, this still amounts to less than $13,000 a year, before taxes. The N.C. Justice Center estimates that a single parent with one child needs to make double that amount -- at least $13.10 an hour or $26,000 per year -- simply to meet basic needs while living in Buncombe County. As the process of adopting a living wage ordinance for the City of Asheville and Buncombe County moves forward, policy decisions should be based on hard economic data and not alarmist rhetoric or flawed studies. Starting with the first living wage ordinance passed in Baltimore in 1994, the living wage movement has become one of the great chapters in American history. There are now over 140 living wage laws on the books in cities, counties, school boards and universities across the country, thanks to the hard work of ordinary people who had the courage to stand up and say: "Our tax dollars should not be used to subsidize businesses that pay poverty-level wages." Asheville and Buncombe County would do well to adopt a living wage ordinance and join the many other communities in the United States that have already done so. Steve Agan is a steering committee member of the Asheville/Buncombe Living Wage Campaign. He lives in Asheville. |
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