Santa Monica’s Minimum Wage: Assessing the Living Wage Movement’s New Frontier

Local campaigns to create high minimum wages in submetropolitan districts have become a growing part of the living wage movement. In this article, the authors examine the structure and likely effects of an ambitious minimum wage ordinance adopted by the Santa Monica City Council in 2001 but narrowly defeated in a citywide referendum in November 2002. Using a range of data sources, the authors find that the ordinance would have had negative, but surprisingly mixed, effects on local business sectors and highly perverse distributional effects. Apart from their merits as policy, local minimum wage laws raise important, little-studied questions for labor and urban economists.