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17

level parents. Fishback and Kantor supplement this analysis with case studies of the
political battle over benefits in the states of Ohio, Minnesota and Missouri. These case
studies offer a much more detailed investigation of the role of interest groups in shaping
the final content of workers’ compensation laws and the timing of those laws (see in
particular the case of Missouri).

The bottom line with respect to both safety regulation and workers’ compensation is that
the bills that entered into law were “more evolutionary than revolutionary” and the result
of compromises (Fishback, 1997, p. 50). The employer side had material political power
and in order to secure legislation labor had in many instances to work with them or a
subset of them.

(v) The Strange Case of Living Wage Ordinances

Living wages have been in operation in the United States since they were first introduced
in Baltimore 1994. Today around 100 cities, counties, and school districts have living
wage ordinances. They resemble minimum wage laws but differ in setting a higher wage
that is most often fixed with reference to the poverty line. That said, they are much more
highly restricted, typically covering city contractors, or companies receiving business
assistance from the city. Just as with minimum wages, most of the literature covers the
effects of such regulation on the wage/poverty outcome, but a recent paper by Neumark
(2001) explores the notion that municipal unions organize to pass living wage laws as a
form of rent seeking. Focusing on the narrow coverage of the laws, Neumark argues that
these ‘other interests’ (the municipal unions) raise the wages that contractors must pay
and thereby reduce the incentives for cities to contract out work ordinarily done by
municipal employees. (His maintained hypothesis is that if the goal of ordinances is
poverty reduction, they should be more general wage floors; on which more below.)

Neumark examines the wage and employment consequences of living wage laws in 19
cities. But first he seeks some prima facie evidence of union involvement. To this end, he
first conducts a simple Internet search, looking for joint mention of living wages and the
cities concerned (i.e. those with the ordinances) and next adds a union descriptor



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