ERIC Number: ED441145
Record Type: Non-Journal
Publication Date: 1999-Jul
Reference Count: N/A
Economic Analysis of a Living Wage Ordinance.
Tolley, George; Bernstein, Peter
A study estimated the costs of the "Chicago Jobs and Living Wage Ordinance" that would require firms that receive assistance from the city of Chicago to pay their workers an hourly wage of at least $7.60. An estimate of the additional labor cost that would result from the proposed Ordinance was calculated. Results of a survey of contractors, delegate agencies, airport concessionaires, recipients of tax increment financing funds, and subsidized loan recipients were converted to obtain a citywide estimate of the cost of the proposed ordinance. Employer responses (1) passing the entire cost of the ordinance through to city government, a cost borne by taxpayers; (2) dismissing low-skill workers; and (3) leaving the city due to reduced profits. The impact of raising a worker's wage from the federal minimum to the Ordinance's amount was examined. Results indicate an increase in after-tax income of workers' families, loss of food stamp and Medicaid benefits, and increased labor costs due to the Ordinance. Chicago taxpayers would bear the cost, resulting in gains to taxpayers elsewhere and limited net benefit to any Chicago workers. The overall impact on Chicago would be reduced employment, loss of businesses, increased taxes, and an uncertain impact on poverty in Chicago. (YLB)
Descriptors: Adult Education, Economic Impact, Economic Research, Employer Attitudes, Job Layoff, Local Issues, Local Legislation, Minimum Wage, Minimum Wage Legislation, Poverty, Taxes, Wages
Employment Policies Institute, 1775 Pennsylvania Avenue, N.W., Washington, DC 20006-4605. Tel: 202-463-7650; Fax: 202-463-7107; Web site: http://www.epionline.org. For full text: http://www.epionline.org/tolley.pdf.
Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: Employment Policies Inst., Washington, DC.
Identifiers - Location: Illinois (Chicago)