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University Makes Sense of Living Wage Figure

It is possible that Harvard? demand for labor could be more or less dependent on wage levels than the municipalities that Neumark has studied.

But examining the effect the living wage has on a family? quality of life?s opposed to the absolute gains in earnings of a low-wage worker?s more heartening, Neumark says.

A 50 percent increase in the level of the living wage results in a 1.4 percentage point drop in the poverty rate, Neumark calculates.

But the living wage as an idea is not ideal, Neumark says, because it fails to take into account the individual situation of the low-wage worker?whether they are single parents trying to support a family or adolescents working for extra spending money.

The living wage is not a panacea for all the problems facing low-wage workers, Neumark says.

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? can tell you as an economist that fewer people will be employed,?he says. ?ut is there a net good outcome or not? You need to think of the potential pool of Harvard employees. Some will earn more, and some presumably won? work for Harvard any more.?

Thus, Neumark is an advocate of the Federal Earned Income Tax Credit, a wage subsidy, as the best way to benefit lowest-wage workers. Through the Earned Income Tax Credit, adults who are working but not making a sufficient amount to sustain their families are given supplementary income from the government.

Some counties have even decided to adopt their own earned income tax credit in addition to the national tax credit, instead of implementing a living wage.

?xcept for the extreme right, this has a very wide base of support,?Neumark says.

The option absolves employers like Harvard from taking action in regards to low wages, and the onus is instead put on local legislatures.

But Reich says this measure fails to take into account the increased productivity that results from employees being pleased with their wages.

Pollin says the living wage movement is gaining interest among economists.

He says he has been giving talks on the living wage throughout the country, and as he talked to The Crimson, Pollin received two other calls from journalists asking for background on the living wage.

But the core of economists researching the living wage remains small, Pollin says.

??e spoken at a lot of places lately, in part because so few economists are interested,?he says. ?t? slowly happening. Once people start saying that they care about economic justice, the logic of a living wage starts to acquire the force of inevitability.?But Pollin is careful to say that the push for a living wage is not limited to an ideological or moral call for social justice.

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