In a new study by Yelowitz “Santa Fe’s Wage Ordinance and the Labor Market,” dated September 23, 2005 (published by the Employment Policies Institute) Yelowitz claims to have demonstrated that the Santa Fe living wage ordinance is responsible for significant, negative consequences for Santa Fe’s least educated residents, including a 9.0 percentage point increase in the city’s unemployment rate among such workers. However, he derives these findings through a presentation of evidence that is misleading and incomplete, misusing the available data. We replicate and extend Yelowitz’s model to look at job growth specifically, and, using the same data as Yelowitz, we find that the Santa Fe ordinance did not produce any decline at all in the availability of jobs. Moreover, our estimates suggest that the living wage ordinance did increase earned income for the average worker affected by the ordinance, even if we accept Yelowitz’s estimates on reduced hours of work. In short, even while relying on Yelowitz’s own model and estimates, we find that, to date, the Santa Fe ordinance has succeeded in achieving its main aims: to improve the quality of jobs for low-wage workers in Santa Fe without reducing their employment opportunities.
Available at: http://works.bepress.com/robert_pollin/14/