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The Impact of Living Wages on Employers: A Control Group Analysis of the Los Angeles Ordinance



This paper analyzes the impact of the Los Angeles Living Wage Ordinance on employers using two original data sets and a quasi-experimental research design. Relative to a control group of establishments, the starting pay of low-wage workers has risen by $1.74 per hour, paid days off have risen by two days, and employer-paid health benefits have not significantly changed among establishments covered by the living wage ordinance. Living wage establishments have witnessed a sizeable reduction in low-wage worker turnover, a drop in absenteeism, reduced overtime hours, and reduced job training relative to the control group of establishments. The ordinance appears to have had no significant impact on the use of part-time workers, the intensity of supervision, or the tendency of living wage firms to fill vacancies from within.