CAP Report confirms that Living Wage Laws have NO negative impact on economic development or job growth.

On Tuesday, November 30, 2010, the Center for American Progress (CAP) released a report of an eighteen year study it conducted from 1990-2008. The report evaluated the affect of living wage laws on economic development and job growth. The study entitled “Creating Good Jobs in Our Communities: How Higher Wage Standards Affect Economic Development and Employment,” compared 15 cities that were successful in the implementation of a business assistance living wage law to 16 control cities that tried and were unsuccessful in the passage and execution of such laws. To date there are 140 local governments that have enforced some form of living wage laws within their jurisdictions.

The report noted that local governments spend more than $50 billion in policies which aim to draw private investors into areas to increase investments and jobs through avenues such as direct subsidies, tax exemptions, and infrastructure improvements. These dollars often come from public funding which are tax-payer dollars. The success of these avenues is not often victorious with businesses relocating to other cities leaving individuals searching for jobs once again.

Several key findings were revealed in CAP’s report putting to rest opponents’ arguments about the negative impact living wage laws have on business venture and job growth in areas that have enacted these laws. For instance, it is argued that cities with living wage laws scare away potential investors due to higher employee costs forced upon them. Additionally, there is the argument that businesses will not hire additional employees due to these stipulations. However, it was found that cities with these laws have the same level of economic growth as cities with comparable attributes but no living wage laws enforcing labor standards. Furthermore, these laws were found to have no negative effects on low-wage workers or low-wage worker industries.

As noted in the report, Living wage laws allow for local governments to ensure that taxpayer dollars do not subsidize poverty wages. Various ways have been developed in order to connect labor standards to public development projects; such as Community Benefit Agreements and prevailing wage and living wage laws, with living wage laws at the forefront of establishing these connections.

To read the Center for American Progress’s full report please click link below: http://www.americanprogressaction.org/issues/2010/11/pdf/living_wage.pdf.