Towards a living wage in the new economy: The politics and economics of building labor market institutions at the urban scale

Economic restructuring and technological change over the past three decades in the United States have resulted in rising income inequality. With the dissolution of long-standing labor agreements between corporations, industrial labor unions and the federal government, there has been little effort to address inequality at the national scale through direct labor market interventions. Since 1994 however, labor advocates, unions, and policy makers have turned to the local scale to fill this regulatory gap with living and minimum wage ordinances. This dissertation examines how the living wage movement exemplifies the restructuring and resealing of U.S. labor market institutions and assesses how living wage legislation impacts local economic development.;This dissertation consists of two distinct empirical projects that answer two closely related research questions motivated by the living wage movement. First, this dissertation asks how labor advocates engaged in the political process to successfully pass legislation that strengthened labor market institutions at the local scale, when---more often than not---city governments are competing with their neighbors to project a positive business climate in order to attract new jobs and development. Using material gathered through first-hand interviews with key stakeholders and archival research, this project answers this question by comparing the evolution of living wage campaigns and related legislation in Chicago and San Francisco, with a focus on coalition-building among disparate political groups, the role and strength of the mayor, and opponents' "business climate" rhetoric. These case studies show how labor market institutions are reconstructed through local political struggle. In explaining the disparate outcomes of such struggles across the cases, this analysis finds that economic factors (e.g. deindustrialization, land-use pressure) and key differences in political structure influence the direction and pace of institutional change in urban labor markets through a path-dependent effect on policy discourses.;The second project follows on the first, and asks, what impact labor market institutional change has on the prospects for economic development in cities. Using the National Establishment Time-Series data on firm-level employment in all living-wage jurisdictions in California, an event-study and difference-in-difference analysis is employed to measure the direct effects of living wage laws on local economic development. This quantitative study concludes that living wage laws do not significantly harm urban employment levels, firm establishment levels, and the urban share of regional employment. This study further refines the analysis of the direct effects of living wage laws by focusing on firms that have government contracts and firms that may be indirectly signaled by a change in the local political environment. This analysis shows that living wage ordinances also do not significantly harm these targeted treatment groups.;Ultimately, this research suggests that the process of institutional change at the urban scale will proceed in a highly variegated pattern as the unique historical and structural characteristics of each city strongly influence the degree to which labor advocates and other progressive actors can exercise power and gain a foothold in the process of urban governance. Further, this work suggests that a living wage law, while unlikely to harm a city's economic development prospects, is only one tool among many that individual jurisdictions can effectively use to address rising income inequality.