‘Living Wage’ Reduces Employment Prospects For Poor

Posted on May 12, 2010

Re: “Bill would make major retailers pay ‘living wage,'” May 4

Councilwoman Mary Pat Clarke’s living wage ordinance threatens to make Baltimore decidedly less charming. This legislation, which raises the minimum wage for large retailers above $10 an hour, will shut a valuable doorway to employment for less-educated or less-experienced Baltimoreans.

Chicago’s City Council tried the same tactic a few years ago and Mayor Richard Daley vetoed it for good reason: Large retailers threatened to take their new store investment dollars to more friendly locations.

It has become abundantly clear from economic studies over many years that in response to a 40 percent increase in the city’s minimum wage, fewer large retailers will locate in the city proper.

Starting wages are just that. Get hired at the minimum wage, prove yourself and move up. Get it backward and you have found a way to drive more jobs over the city line

With an unemployment rate that’s still above 10 percent, job-killing wage mandates are the last thing Baltimore needs. Clarke may think she’s doing working Baltimoreans a favor, but a “living wage” is no help at all if you don’t get hired.

Michael Saltsman
Research fellow,
Employment Policies Institute
Washington