Because living wage ordinances cover only a small share of the locality's workforce (usually less than 1%), employers usually absorb costs rather than increase price of contracts or leave the market. 

To date, studies on the effects of living wage provisions indicate that increased wages have posed minimal financial strain on employers or cities.  Furthermore, while paying a living wage potentially increases the amount of money the locality spends on contracts, local governments can reap savings as families become less reliant on income supports and social services.

The increased costs of paying a living wage are minimized or offset for the employer through efficiency gains, including:

• Reduced recruitment and training costs .  Higher wages lead to a decreased worker turnover rate, saving employers money on training costs. 
• Increased productivity and improvement of workforce. Providing higher wages and benefits creates a stronger, more productive workforce because there are higher costs associated with job loss.

Framing Costs

Cities with a large urban core often lack the budget to pay for new ordinances.  Presenting the city with an analysis of projected compliance and monitoring costs is an effective way of demonstrating how the ordinance is feasible and beneficial to the community.  Cost considerations should include an analysis of where within the city budget money could come from.  Costs can be presented in terms of affecting one of the following parties:

• Cost to taxpayers
• Cost for contracts
• Cost for employers

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