FAST FACT: We Do Not Need to Sacrifice Job Quality to Create More Jobs

By Nkiru Uzodi*

The Center for American Progress (CAP) released a report last month titled Creating Good Jobs in Our Communities: How Higher Wage Standards Affect Economic Development and Employment. The report addresses the controversy over the impact of living wage laws on jobs and the economy. Living wage laws require firms that receive subsidies or other forms of government assistance to adopt higher wage standards. Proponents believe that these standards will make low-income households spend more money. Since such households spend their money locally, it will help develop local economies. Opponents disagree and argue that it will increase unemployment levels, particularly for low-skilled workers. They also believe that it would discourage businesses from investing in communities with higher wage laws since higher wage standards means raised employee costs.

However, CAP’s study discredits this argument, finding that such laws do not reduce the number of jobs in cities that choose to adopt them. It also found that employment levels in low-wage industries, industries likely to be targets of economic development subsidies, and firms that are sensitive to the perceived business climate of a city were unaffected.

There is an ongoing campaign in NYC for a living wage law and we cannot wait to see how this report will affect the campaign.

*Nkiru Uzodi is a Research and Programs Intern with the National Council for Research on Women.