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The minimum wage and the poor: The end of a relationship


  • Richard V. Burkhauser
  • T. Aldrich Finegan


The belief that minimum-wage legislation helps the working poor is one reason for its continued popular support. The authors track the household incomes of low-wage workers and find that a radical transformation has occurred in the half century since the passage of the original minimum-wage law. Today most low-wage workers live in households well above the poverty line. Hence, those living in poverty will get only about 11 percent of the gains from the higher minimum-wage increase proposed in the Kennedy-Hawkins Bill. Low-wage workers in families with incomes three or more times the poverty line will get nearly 40 percent. Thus it is not clear that increases in the minimum wage make good policy even if no jobs are lost as a result.

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  • Richard V. Burkhauser & T. Aldrich Finegan, 1989. "The minimum wage and the poor: The end of a relationship," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(1), pages 53-71.
  • Handle: RePEc:wly:jpamgt:v:8:y:1989:i:1:p:53-71 DOI: 10.2307/3324424

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    References listed on IDEAS

    1. James Heckman, 1997. "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 441-462.
    2. Ted Joyce & Diane Gibson & Silvie Colman, 2004. "The Changing Association Between Prenatal Participation in WIC and Birth Outcomes in New York City," NBER Working Papers 10796, National Bureau of Economic Research, Inc.
    3. repec:aph:ajpbhl:1987:77:7:813-818_9 is not listed on IDEAS
    4. Barbara Devaney & Linda Bilheimer & Jennifer Schore, 1992. "Medicaid costs and birth outcomes: The effects of prenatal WIC participation and the use of prenatal care," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(4), pages 573-592.
    5. Marianne P. Bitler & Janet Currie, 2005. "Does WIC work? The effects of WIC on pregnancy and birth outcomes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(1), pages 73-91.
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