To the editor:

Harry Shaffer (Public Forum, Monday) makes several observations that are in error regarding the living wage proposal.

Although Mr. Shaffer believes a “living” (minimum) wage law reduces demand for workers in theory, he thinks that in the real world paying higher wages expands overall spending because more money goes into workers’ pockets.

This is simply untrue.

What is paid in higher wages comes from others’ pockets — no increase in purchasing power conceivably results from raising wages.

Second, the evidence on the effects of minimum wage law is quite different from what Mr. Shaffer states: Most careful empirical studies show that minimum wage laws cause unemployment and reduced economic activity. The common sense support for this statement is demonstrated by the many small businesses in Lawrence that reasonably seek to shield themselves from having a living wage ordinance apply to them.

Proponents of a living (minimum) wage who might reluctantly agree with me about its negative employment effects still would apply to firms lured to Lawrence via tax abatements. In effect, they see requiring higher wages as a just levy on these firms receiving tax abatements. But tax abatement policy should stand on its own merits. A careful assessment of tax abatements given in this community shows that they rarely, if ever, do. Thus, yoking a “living wage” to tax abatement is a classic “lose-lose” public policy prescription. Two wrongs don’t make a right, even in public policy-making.

Doug Houston,

Lawrence