Clayton P. Gillette (New York University Law School) has posted Local Redistribution, Living Wage Ordinances, and Judicial Intervention (Northwestern University Law Review, Forthcoming) on SSRN. Here is the abstract:
The recent growth of “living wage” ordinances in municipalities poses a fascinating theoretical and legal puzzle. Traditional theories of urban finance suggest that local governments cannot effectively engage in redistribution, because potential residents and firms will simply migrate to less redistributive localities. Yet these ordinances are explicitly redistributive. Moreover, “living wage” ordinances are not alone. Increasingly, local governments are involved in redistribution, from imposing living wage requirements to subsidizing firms. There are two plausible explanations for this phenomenon. The first is that the conventional wisdom about local redistribution requires modification – local governments can effectively enact redistributive legislation because redistribution has limited geographical benefits that localities can exploit. The second explanation is more cynical – local legislation is enacted at the behest of local interest groups who can gain benefits from the legislation, notwithstanding deleterious effects to the locality overall.
In this Article, I use the current debates about living wages as a microcosm for discussion of the larger issue of local redistribution. I consider both the benign and malign explanations for living wage ordinances and local redistribution generally, and then turn to the capacity of courts to distinguish when each explanation exists. This leads into a general discussion about the extent to which state constitutional law authorizes judicial intervention into legislative processes. Even if state courts have constitutional authority to intervene in legislative processes, however, I suggest that the judiciary has limited institutional competence to distinguish the malign from the benign redistributive program and address the implications of those limitations.