Over the past decade, politicians have sought to reform the national poverty levels by lobbying for what is frequently referred to as a living wage. Living wages, on the most elementary level, are the absolute minimum a person must make per year or per hour to stay above the federal poverty level. While the number of people that receive living wages is still small, Wood (2002) suggests that this is a trend that is gaining momentum across the United States because it may help reduce employee turnover and increase worker productivity.
Living wages became a hot topic in 1994 when Baltimore, Maryland officials adopted a policy that required all companies that received public funds or worked on government contracts to pay a wage that would sufficiently provide for the basic needs of the people they employed. Living wages differ among cities since it is calculated by the cost of living in that area. The cost of living is based on available childcare, healthcare, housing, food, and transportation costs. According to www.responsiblewealth.org, (2005) in 2000, the living wage amounted to $17,050 a year for a family of four, or $8.20 per hour for a full-time, year around worker. Most studies show that the economical benefits of living wages, such as worker productivity and reduced turnover, are increasing, and I must agree with Neumark (2003) who explains that living wages overall can reduce poverty, and living wage laws are effective, but there is an obvious tradeoff that occurs with wage increases, specifically employment reductions for individuals with little or no skills. Issues such as these will be discussed in greater detail in this paper.
Reductions in Poverty
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...g Wage Effects: New and Improved
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Malanga, Steven. "How the "Living Wage" Sneaks Socialism into Cities," City Journal
13, no. 1 (2003). http://www.city-journal.org
Responsible Wealth, " Living Wage: Frequently Asked Questions about he Living
Stephens, Tom, "Living Up to the Living Wage," The National Lawyers Guild, Michigan
House of Representative Committee Hearing, February 2003.
Wood, Daniel. " Living Wage' laws gain momentum across US," The Christian
Science Monitor March 15, 2002
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