Since the living wage is a relatively new concept (the first ordinances began to appear in the late 1990s) the amount of empirical evidence on the economic effects of a living wage is difficult to determine. However, there is much ethical and spiritual literature available in support of a living wage.
The city of San Jose first enacated a living wage in 1998 both because the legislature felt that the government should pay its employees with justice, because the government represents justice [2]. Much of the the rhetoric and philosophy in this resolution dealt with bringing families over the poverty line. The poverty information collected by the U.S. Census is calculated according to the federal poverty line. However, Quigley attacks the definition of federal poverty. He contends that the poverty line is undercalculated, because it underestimates the cost of living, and does not account for the income taken out of taxes [5]. Nevertheless, the city San Jose continues to use the federal poverty line to recalculate the living wage annually. This year, it was $11.61 [1].
Both Quigley and Pollin & Luce support a living wage purely on moral grounds. Both books believe that every citizen in this country deserves not only the right to work, but the right to live on the wages this work provides [5,6]. Quigley especially outlines the impossiblity of "making it" on the minimum wage. He sites its stagnatory nature as one of the primary reasons. The minimum wage does not take inflation into account, but a living wage does [5]. Quigley also supports the existence of unions, espcially in context with the catholic church. However, the power and support that unions have in terms of numbers of members has been weaking over the past 20 years, even if the philosophical arguments for its existence has not [4].
It is difficult to find emperical evidence on the living wage, due to its realtively new nature. However, I decided to use the model of increases in the minimum wage and its economic effects to reflect on possible problems that may reside with living wage legislation. All research cited a study done by Card and Kruger of Princeton University, which literally flies in the face of economic theory [5,6,7,8]. Theoretically, a living wage would not be beneficial, because it this artificial price floor would cause both inflation and unemployment [7]. However, this study shows that an increase in minimum wage does not cause unemployment to rise. In fact, worker productivity increases to offset problems of inflation as well [8].
The santa clara campus is not affected by the same market forces that affect the national economy. However, the same principles apply. The cost of the wage must be passed on to someone, in our case, consumers. Most of the research applying to this campus was found through personal interview. The nature of living wage on this campus is very well supported morally, but has not been put into practice.