Wage Deflation.

• Author: Block, Jonathan
• Position: Government refuses increase in living wages - Brief Article

Over the past few years, living wage" ordinances have gained popularity throughout the country. Such laws require businesses that have public-sector contracts or that receive economic development incentives to pay workers several dollars above the minimum wage. They are in place in at least 37 jurisdictions and have been proposed in about 70 more.

But the recent defeat of a living-wage law in Montgomery Country, Maryland, just outside of Washington, D.C., suggests that when the negative economic effects of such legislation are made clear, even politicians quick to score p.r. points can do the right thing. In June, developers who had received a tax abatement to redevelop downtown Silver Spring went ahead with their $325 million project only after receiving assurances from the county council that a proposed living wage bill would not affect them.

Montgomery County Executive Douglas M. Duncan led the fight...