Proponents of a living-wage ordinance in Lawrence say it would reduce poverty by raising wages for the city’s poorest workers.

Opponents say it would result in fewer jobs because employers would cut positions rather than spend more money on them.

It turns out both sides may be right.

A recent report says living-wage ordinances across the nation have had “sizable positive effects” on the wages of low-paid workers. But they also have resulted in fewer jobs to go around.

“The combined evidence suggests that the cup is either half full or half empty, depending on one’s point of view,” David Neumark, a Michigan State University professor, wrote in his report for the Public Policy Institute of California.

Neumark wrote that one effect of ordinances is to reduce the overall level of poverty in the cities where they’ve been passed.

“Policymakers … ought to be encouraged by the finding that living-wage laws have their most ‘direct’ intended consequence raising the wages of low-wage workers,” he wrote.

In Lawrence, the Kaw Valley Living Wage Alliance is advocating a living wage of more than $9 an hour be required of companies that receive tax breaks. The Lawrence City Commission last year rejected calls to add that requirement to the city’s tax-abatement policy.

The battle continues, however. The alliance continues to raise money and signatures for its campaign; opponents notably, the Lawrence Chamber of Commerce continue to warn against the dangers of a living wage.

Both sides say Neumark’s report proves their points.

“The more you force companies to raise wages, the more you increase unemployment,” said Tim Holverson, the chamber’s vice president of public policy.

Holverson wasn’t persuaded by the overall poverty-reducing effect of living wages.

“For those who would be able to keep their jobs, I’m sure it would be,” he said. “But what about the people who lose their jobs as a result?”

David Smith, a member of the alliance’s steering committee, disagreed.

“The most important issue has to do with fairness,” he said. “It’s possible to argue all kinds of issues about the economy, but the city should not be subsidizing poverty. If the city is giving tax breaks to companies, those companies should be good citizens.”

Smith said that Neumark’s study included cities with different types of living-wage ordinances, including those that apply just to companies that do contract work for the cities. When only cities that apply living wages to tax-abated companies are examined, he said, the poverty-reduction results are even better.

“He finds virtually nothing that would be considered negative,” Smith said.

Holverson, though, said it’s hard to bring new businesses to town. A living-wage ordinance would make it harder, he said.

“People don’t beat down the doors to get to the Midwest, and college towns have a reputation as a harder place to do business,” he said.

If that is so, Smith said, then how was it that Lawrence managed its recent high ranking in a Forbes’ magazine list of best places to do business?

“That’s further indication,” he said, “that we’re in a strong position to do the right thing.”

	www.ppic.org/publications/PPIC156/ppic156.alltext.pdf