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Working Paper 61


This paper first examines the question “what is a living wage” and provides a range of specific dollar amounts derived a conceptual assessment of the term. I then provide a series of cost estimates of living wage laws in various cities. Based on these cost estimates, I examine a set of alternative adjustments that covered firms could make to absorb these costs, including raising prices and productivity, redistributing the firm’s income more equally, laying off employees and relocating out of the area covered by the law. I draw upon both prospective and retrospective evidence to reach an overall assessment of the benefits of living wage laws relative to their costs.

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