Can Wage Laws Benefit Both Workers and Employers?
Those interested in promoting higher wages for low-wage workers also look to government policies to provide support, including minimum and living wage laws and the Earned Income Tax Credit. Minimum wage laws, while no longer controversial in the U.S., may still become an issue when not applied to sub-classes of workers (illegal immigrants, youth, or some service workers). The minimum wage has also declined significantly in real terms; adjusted for the cost of living, its value is lower than it was in the 1960s. Another example of debate over policy prescriptions for low-wage work is that over “living wage” ordinances. A number of cities (140 as of this writing, including Miami, Philadelphia, and New York[1]) have mandated such laws for covered employers; the debate is whether these laws drive away jobs, leaving workers worse off, or whether businesses can improve the wages and benefits of low-wage jobs and still be competitive. Regardless of the policy prescription under consideration,