Brian Dickerson: September 1, 2000

FOLKS WHO are sincerely interested in helping poor people needn't shed too many tears over Oakland County's rejection of a living-wage ordinance. A proposal to set the minimum hourly pay for workers employed by contractors doing business in the county at $8.50 -- more than $3 above the federal minimum wage -- died aborning Thursday when Republican members of the county commission's Finance Committee (and one Democrat) refused to refer it to the full commission. Opponents contended that the proposed ordinance would raise the cost of government services while actually reducing employment opportunities for the least-skilled workers.

Economists have marshaled considerable evidence that imposing a minimum-wage rate higher than the market rate for unskilled labor simply encourages employers to hire fewer workers. If you want to help those at the bottom of the economic ladder, they argue, imposing a tax on the use of unskilled workers is probably not the smartest way to go about it.

David Neumark, a Michigan State University economics professor who recently completed a study of living-wage ordinances in a dozen major cities, says the preliminary evidence is that such ordinances actually contribute, albeit modestly, to reducing the number of workers living below the poverty level. Raising the minimum wage for government employees tends to boost pay rates for other workers as well, Neumark found -- probably, he speculates, because contractors who do some government work tend to pay all their employees the same.