News Feed Item

The Fraser Institute: Living Wage Laws Can Hurt the Most Vulnerable Workers

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 01/14/14 -- As more Canadian municipalities consider adopting so-called living wage laws, a new report published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank, concludes these laws can actually hurt low-paid workers.

The report, The Economic Effects of Living Wage Laws, reviews scholarly research on living wage laws in the United States, where more than 140 municipalities have the legislation, and spotlights the effects on employment, wages and poverty.

"The best available evidence from the U.S. serves as a cautionary tale for us in Canada about adopting living wage laws. When governments try to legislate wages, there's typically a trade-off-while some workers may benefit from a higher wage, their gain comes at the expense of others who lose as a result of fewer employment opportunities," said Charles Lammam, study author and resident scholar in economic policy at the Fraser Institute.

Living wage laws require private employers who do contract work for a city to pay their workers a wage that meets a living standard promoted by labour activists. Unlike minimum wage legislation, living wage laws cover smaller groups of workers and typically require a much higher wage. In 2011, New Westminster, British Columbia became the first and only Canadian city to adopt a living wage law. At $19.62 per hour, New Westminster's current living wage is nearly double the provincial minimum wage of $10.25.

Although activists claim living wage laws can increase wages with minimal costs, the reality is quite different. According to the best available research, a 100 per cent increase in the living wage (for example, going from an hourly minimum wage of $10 to $20) reduces employment among low-wage workers by between 12 and 17 per cent.

"Employers respond to living wage laws by cutting back on jobs, hours and on-the-job training. As a result, some workers lose employment income and the ability to gain valuable skills and experience," Lammam said.

The report notes that employers also respond to living wage laws by hiring more qualified workers and passing over those with fewer skills thereby reducing the opportunity for less-skilled workers to participate in the labour market.

"Less-skilled workers are presumably among the very people living wage laws are supposed to help, but the evidence suggests these laws particularly hurt less-skilled, lower paid workers," Lammam said.

In reviewing the effect of living wages on poverty, the report notes a study of seven major U.S. cities that found 72 per cent of workers benefitting from living wage laws were not actually poor. Of the 28 per cent who were considered poor, only one-third moved above the poverty line.

"Living wage laws often don't help the most poverty-ridden families, in part, because the overwhelming proportion of those benefitting from living wage laws tends not to be poor," Lammam said.

Finally, the report cautions that the cost of living wage laws may be passed on to taxpayers.

"With higher labour costs for city contractors, there is the potential for living wage laws to result in larger city budgets and higher municipal taxes," Lammam said.

Follow the Fraser Institute on Twitter

Like us on Facebook

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

Add to Digg Bookmark with del.icio.us Add to Newsvine

Charles Lammam
Resident Scholar in Economic Policy, Fraser Institute
(604) 714-4544
[email protected]

Dean Pelkey
Director of Communications, Fraser Institute
(604) 714-4582
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
DXWorldEXPO LLC announced today that "Miami Blockchain Event by FinTechEXPO" has announced that its Call for Papers is now open. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expe...
Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. H...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
@DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises - and delivering real results.
The dynamic nature of the cloud means that change is a constant when it comes to modern cloud-based infrastructure. Delivering modern applications to end users, therefore, is a constantly shifting challenge. Delivery automation helps IT Ops teams ensure that apps are providing an optimal end user experience over hybrid-cloud and multi-cloud environments, no matter what the current state of the infrastructure is. To employ a delivery automation strategy that reflects your business rules, making r...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
"We started a Master of Science in business analytics - that's the hot topic. We serve the business community around San Francisco so we educate the working professionals and this is where they all want to be," explained Judy Lee, Associate Professor and Department Chair at Golden Gate University, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...