Publications

Journal of Economic Issues, 48(2). June 2014.

In When Mandates Work, Michael Reich, Ken Jacobs, and Miranda Dietz, eds. University of California Press. January 2014.

Abstract

Most of the first wave of living wage ordinances that were enacted in the mid-1990s involved minimum pay scales that were substantially above federal and state minimum wages. Typically they set a standard of $8.00 or more per hour when the minimum wage was $5.15. Policy makers gen- erally assumed that a living wage policy could not work in trade-based goods- or service-producing sectors that were subject to the forces of tech- nological change and global competition. Consequently, living wage ordi- nances typically covered only workers on municipal service contracts, or only about 3 percent to 5 percent of the low-wage workers in a city. The implementation of these ordinances often involved granting numerous waivers and exemptions, further reducing their impact. Consequently, the first ordinances were thought to have small spillover impacts on the local low-wage labor market (Freeman 2005).

In When Mandates Work, Michael Reich, Ken Jacobs, and Miranda Dietz, eds. University of California Press. January 2014.

Abstract

Beginning in the late 1990s, the City of San Francisco enacted a notable series of laws designed to improve pay and benefits, expand health care access, and extend paid sick leave for low-wage San Francisco residents and workers. Remarkably, and despite many warnings about dire negative effects, these new policies raised living standards significantly for tens of thousands of people, and without creating any negative effects on employment. While modest by most European and Canadian standards, San Francisco’s policies represent a bold experiment in American labor market policies that provides important lessons for the rest of the United States.

In When Mandates Work, Michael Reich, Ken Jacobs, and Miranda Dietz, eds. University of California Press. January 2014.

Abstract

In November 2003 San Francisco voters passed a ballot proposition to enact a minimum wage covering all employers in the city. The new standard set a minimum wage at $8.50 per hour—over 26 percent above the then-current California minimum wage of $6.75—and an annual adjustment for cost of living increases (reaching $10.55 in 2013). This standard, which first became effective in late February 2004, constituted the highest minimum wage in the United States and the first implemented universal municipal minimum wage in a major city. In a prospective study of this policy, Reich and Laitinen (2003) estimated that about 54,000 workers, amounting to 10.6 percent of the city’s workforce, would receive wage increases, either directly or indirectly, if such a policy were adopted and that the increased wage costs on average would amount to about 1 percent of business operating costs.