Impact
Research shows that minimum wage laws and living wage legislation impact poverty differently: evidence demonstrates that living wage legislation reduces poverty. The parties impacted by minimum wage laws and living wage laws differ as living wage legislation generally applies to a more limited sector of the population. It is estimated that workers who qualify for the living wage legislation are currently between 1-2% of the bottom quartile of wage distribution. One must consider that the impact of living wage laws depends heavily on the degree to which these ordinances are enforced.
"There is evidence that living wage ordinances modestly reduce the poverty rates in locations in which these ordinances are enacted.However, there is no evidence that state minimum wage laws do so." With minimum wage laws, the increased costs are passed to employers who in turn charge consumers higher prices if possible. Faced with higher prices, consumers purchase fewer goods thus leading to a redistribution among low wage workers. Those impacted by living wage legislation are typically low wage employees who are selling services to the local governments.
Read more about this topic: Living Wage
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