The determinants of living wage rates

Several cities have recently adopted living wage ordinances which mandate that firms contracting with the city pay their workers an hourly wage at or above the legislated “living wage rate” set by the city. Following the literature on minimum wage rate determination, I explore factors influencing living wage rates. Using a sample of 39 cities, the results show that living wage rates are particularly sensitive to per capita income, fair-market rent, the minimum wage rate, the proximity of the city to other living wage cities, and the year that the city adopted the living wage ordinance.