Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?
AbstractUsing data drawn from the March Current Population Survey, we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates. When we then simulate the effects of a proposed federal minimum wage increase from $7.25 to $9.50 per hour, we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from $5.15 to $7.25 per hour. Assuming no negative employment effects, only 11.3% of workers who will gain live in poor households, compared to 15.8% from the last increase. When we allow for negative employment effects, we find that the working poor face a disproportionate share of the job losses. Our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 76 (2010)
Issue (Month): 3 (January)
Find related papers by JEL classification:
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- More evidence on minimum wages, employment and poverty
by Stephen Gordon in Worthwhile Canadian Initiative on 2010-11-10 13:27:53
- Even more on the ineffectiveness of minimum wages as an anti-poverty measure
by Stephen Gordon in Worthwhile Canadian Initiative on 2010-02-22 12:59:38
- Minimum wage - poorly targeted
by Crampton in Offsetting Behaviour on 2010-02-01 01:57:00
- "Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?"
by Craig Newmark in newmark's door on 2010-02-22 10:29:00
- Fields, Gary, 2013. "Aid, Growth, and Jobs," IZA Discussion Papers 7141, Institute for the Study of Labor (IZA).
- Philipp vom Berge & Hanna Frings & Alfredo R. Paloyo, 2013. "High-Impact Minimum Wages and Heterogeneous Regions," Ruhr Economic Papers 0408, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Michele Campolieti & Morley Gunderson & Byron Lee, 2012. "The (Non) Impact of Minimum Wages on Poverty: Regression and Simulation Evidence for Canada," Journal of Labor Research, Springer, vol. 33(3), pages 287-302, September.
- Fields, Gary, 2012. "Aid, Growth, and Jobs," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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