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15 Emp. Resp. & Rts. J. 1 (2003)

handle is hein.journals/emprrj15 and id is 1 raw text is: Employee Responsibilities and Rights Journal, Vol. 15, No. 1, March 2003 (( 2003) The Living Wage and the Effects of Real Minimum Wages on Part-Time and Teen Employment Faraj Abdulahad'2 and Hany S. Guirguis In many parts of the country, campaigns are being carried out and laws are being passed whose aim is to establish, among other things, standards for contracting out public services and setting acceptable living wages that will provide employees decent living standards. Living wages have economic consequences on employment of different groups of workers such as part-time, teenagers, and women and detailed data are needed to measure those effects. In the absence of such data and because of the strong link between living and minimum wages, this study tests the potential impact of living wages by using the model of minimum wages. The study documents a negative and significant relationship between real minimum wages and the employment levels of the various groups. The study also recommends better training and education, free competition in the labor market, and fair compensation based on the workers productivity as justifiable means to achieve a sustain- able level of living wages without causing an unemployment repercussion. KEY WORDS: real minimum wages; living wages; and employment. INTRODUCTION In recent years, there has been a movement in many parts of the United States, especially at the city and county levels to pass living wage ordinances and legislation that require government contractors and employers to pay workers wages that are sufficient to support them and their families and live in dignity (living wage). For instance, in 1994, a group of religious and labor leaders led by the American Federation of State, County, and Municipal Employees (AFSCME) in Baltimore spearheaded a campaign that resulted in the passage of a law requiring city service contractors to pay their employees a living wage. According to Pollin and Luce (1998), the ordinance stipulated that employees be paid a minimum hourly wage of $6.10, with yearly increases to follow in subsequent years, increasing that rate to $7.70. Since that time, more than 60 cities across the United States have established living wage ordinances that require businesses that receive city contracts or tax incentives to pay 1Department of Economics and Finance, Manhattan College, Riverdale, New York. 2To whom correspondence should be addressed at Department of Economics and Finance, Manhattan College, Manhattan College Parkway, Riverdale, New York 10471-4098; e-mail: fabdulah@manhattan.edu. 1 0892-7545/03/0300-0001/0 © 2003 Plenum Publishing Corporation

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