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Minimum Wage

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When the president raised the minimum wage for federal workers, lots of editorials appeared in newspapers. Jason Riley dug out an old editorial to illustrate how perceptions have changed in the media elite.

Back in 1987 the New York Times editorial read: “The idea of using a minimum wage to overcome poverty is old, honorable—and fundamentally flawed. It’s time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.”

Earlier this month, the New York Times posted this editorial: “An hourly minimum wage of $10.10, for example, as Democrats has proposed, would reduce the number of people living in poverty.”

Let me say this clearly: no it won’t. Numerous academic studies show that raising the minimum wage does not help people living in poverty. Families are usually poor not because they have low wages but because they do not have a full-time job. A job is the best anti-poverty program we can implement.

Jason Riley cites one study done by Joseph Sabia of American University and Richard Burkhauser of Cornell University. They could find “no evidence” that minimum wage increases lowered poverty rates. There are many reasons for this.

First, the minimum wage increases were “not well targeted to the working poor.” Second, only a small percentage of workers who would gain from an increase in the minimum wage live in poor households. Third, of those who gain, a very large percentage “are second and third earners in households with incomes twice the poverty line.” Many are well above the median household income.

The challenge for many people below the poverty line is that they don’t have a job. Their problem isn’t low wages. Their problem is no wages. Raising the minimum wage makes it even harder to get a job. On my radio program I pointed out that when I got my first job as a teenager, I seriously doubt that I would have been worth $10/hour to an employer. If people need a job, raising the minimum wage doesn’t help them.

Viewpoints by Kerby Anderson

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