The federal government requires companies to pay their employees at least $5.15 per hour. But many municipalities across the country have decided that the minimum wage is simply not enough for someone to live on.
New Orleans became the latest city to enact a "living wage" ordinance. But unlike similar efforts, the New Orleans plan covers all workers, not only companies that contract with the local government. The New Orleans plan also does not exempt very small businesses.
Opponents have vowed to fight the New Orleans living wage ordinance in court. Some economists argue that creating a locally higher wage can discourage businesses from moving into an area and ultimately lead to there being fewer jobs.
The living wage movement has its roots in Baltimore in the early 1990's. According to economist Robert Pollin, working people were showing up in the city's soup kitchens and shelters. "The light bulb went on — if these people have jobs, then it must be that the wages are terrible," he said.
This hour, the debate surrounding a "living wage." Are current minimum wage laws enough? Could enacting living wage laws actually hurt workers?
Robert Pollin, Professor of Economics at the University of Massachusetts
David Newmark, Professor of Economics at Michigan State University
This program aired on February 18, 2002.