Wash. Times Rehashes Myths About Living Wage To Attack D.C. Proposal

The Washington Times attacked a Washington, D.C., proposal that would require large retailers in the District provide a living wage to their employees, claiming there will be dire economic consequences if the measure succeeds. However, the editorial ignored evidence showing that establishing living wage standards boosts productivity and lowers turnover.

D.C. Council Bill Would Require Large Retailers Pay Living Wage

Wash. Post: D.C. Council Bill Would Require Large Retailers With Sales Of $1 Billion To Pay Living Wage. As The Washington Post reported, the Large Retailer Accountability Act proposed by the Washington, D.C. Council would require companies “with corporate sales of $1 billion or more and operating in spaces 75,000 square feet or larger to pay their employees no less than $12.50 an hour.” As the Post noted, the “city's minimum wage is $8.25. [The Washington Post, 7/9/13]

Wash. Times Claimed Bill Would Hurt D.C. Economy And Entry-Level Employees

Wash. Times: Living Wage Bill Would Drive Away Jobs And Cut Sales Tax Revenues In D.C. The Washington Times editorial board attacked the proposed D.C. Council bill, claiming that the measure is “discriminatory” on large businesses and that it “send[s] the message to major retail chains that they're not welcome in Washington, and they should take their jobs to the suburbs.” The editorial continued:

The District can't afford to drive away jobs, since entry-level employees in the city suffer at 16 percent unemployment, as calculated by the D.C. Fiscal Policy Institute.


That means sending more business across the Potomac, cutting sales-tax revenues that would otherwise be paid in the District, as well as other property and business-income taxes. The city will have further earned its reputation for being anti-business. [The Washington Times, 7/10/13]

Cities That Have Enacted Living Wage Laws Experience Little To No Loss Of Businesses

Economist Mark Brenner: “The Empirical Evidence For Job Loss Or Other Serious Economic Consequences” Due To Living Wage Laws “Is Weak.” In an interview with the Political Economy Research Institute, economist Mark Brenner discussed the study he conducted on living wage laws in which he found “no evidence of laws on the books leading to systematic job losses”:

The empirical evidence for job loss or other serious economic consequences is weak. Prior studies have found no consistent evidence that living wage laws increase contract costs, although there is wide variation. Some contract prices have gone up substantially after living wage implementation, others dropped significantly. This is why we stress the fact that living wage laws are only one of many factors influencing the cost of city services, and often not the most important one!  To date there has been no evidence of laws on the books leading to systematic job losses. Our study confirms this; living wage laws did not generate job losses in the cities we examined. We actually found some evidence that the living wage law in Boston may have improved the covered jobs, making more of them full-time. [Political Economy Research Institute, accessed 7/10/13]

Economic Policy Institute: Studies Show “There Have Been Either No Or Only Small Employment Losses As A Result Of Adopting Living Wages.” In a comprehensive analysis examining how a living wage affected businesses, the Economic Policy Institute found that the consensus among those who have studied the issue was that living wage laws resulted in little to no employment loss:

A frequently expressed concern about living wage ordinances is that the increased cost might decrease employment opportunities for low-skilled workers by causing employers to hire fewer workers or even lay off employees. The employment impact of living wage ordinances is a primary focus of most recent living wage studies. In attempting to answer the question of whether or not living wage ordinances have a significant impact on employment, different researchers have used a variety of approaches, ranging from qualitative interviews with service contractors and affected workers, to detailed before-and-after analysis of impacted firms, to econometric analyses of readily available labor market data. 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. [Economic Policy Institute, 2/15/06]

University Of New Mexico: Living Wage “Is Not A Significant Factor” In Hiring Or Firing Employees. In August 2007, the Bureau of Business & Economic Research at the University of New Mexico analyzed the impacts of a Santa Fe living wage law and found that there was little impact on employment following a mandatory increase:

In terms of the statistical analysis, there is little in the overall results that suggest any impact of the $9.50 living wage. Comparisons of large Santa Fe City businesses with large businesses in Santa Fe County and in Albuquerque yield no significant difference overall or by industry. Comparing large to small businesses, significant differences are only found in Santa Fe County and Albuquerque, our two control regions where the living wage does not play a direct role. All of this further supports conclusions arrived at in the original analysis of the $8.50 living wage that any employment changes are symptomatic of other factors, but that the living wage is not a significant factor in determining whether a company hires or fires employees. [Bureau of Business and Economic Research, August 2007]

Center For American Progress Action Fund: “Living Wage Law Has No Measurable Effect On Citywide Employment.” The Center for American Progress Action released a study in November 2010 looking at the economic impact of living wage laws on cities during a nearly 20-year span and found that a “business assistance living wage law has no measurable effect on citywide employment.” It also concluded  that “business assistance living wage laws are unlikely to have an effect on employment levels even during hard economic times.” [Center For American Progress Action Fund, November 2010]

Living Wage Laws Decrease Worker Turnover, Create More Productive Workforce

Study Of San Francisco Airport Workers Found Increased Productivity, Reduced Turnover, And Shorter Airport Lines. A March 2003 study on the effects of a living wage policy at San Francisco International Airport (SFO) found that security screeners, who had a 94.7 percent turnover rate before the living wage law had just an 18.7 percent turnover rate after the living wage policy went into effect:

Turnover fell by an average of 34 percent among all surveyed firms and 60 percent among firms that experienced average wage increases of 10 percent or more. The greatest reduction in turnover occurred among airport security screeners, from 94.7 percent a year in April 2000 to 18.7 percent fifteen months later, an 80 percent decrease. Cabin cleaning firms reported a 44 percent reduction in turnover, and ramp workers a 25 percent reduction. [Institute of Industrial Relations, March 2003]

SFO Airport Study Found That Higher Wages “Translated Into Improved Worker Performance.” The March 2003 study on the effects of a living wage policy at the San Francisco International Airport also found a 35 percent increase in work performance and a 47 percent increase in employee morale:

Our employer survey also demonstrated that higher wages and better benefits at SFO translated into improved worker performance. Table 5.8 shows that employers reported improvements in overall  work performance (35 percent), employee morale (47 percent), absenteeism (29 percent), disciplinary issues (44 percent), equipment maintenance (29 percent), equipment damage (24 percent) and customer service (45 percent). In each case, a much smaller proportion reported any worsening of the condition. [Institute of Industrial Relations, March 2003]

Study Of Homecare Workers In San Francisco Found More Employees Stayed On The Job For At Least One Year. According to the Economic Policy Institute, a study by Candace Howes, an economist at Connecticut College, found that homecare worker turnover fell by 57 percent following the living wage policy implementation and “the likelihood that a new worker would stay at least one year on the job rose by 89%.” [Economic Policy Institute, 2/15/06]