Yes, a minimum wage boost will reduce poverty. Here’s the evidence.
The push is on in Congress to raise the federal minimum wage to $10.10 an hour, and so too is the conservative counterattack.
In the vanguard of the pushback is Sen. Marco Rubio (R-Fla.), who dismisses the minimum wage as a “stale” weapon in the war on poverty -- worse, an ineffective one.
“Raising the minimum wage may poll well, but having a job that pays $10 an hour is not the American dream,” Rubio said in his recent speech marking the 50th anniversary of Lyndon Johnson’s anti-poverty program. “Our current government programs offer at best only a partial solution. They help people deal with poverty, but they do not help them escape it.”
Those are strong words as the movement to raise the federal minimum from the current $7.25 an hour is launched by Sen. Tom Harkin (D-Iowa), Rep. George Miller (D-Martinez) and the White House. (The lawmakers will be joined by chief White House economist Jason Furman at a forum on the topic on Tuesday in Washington.)
But Rubio’s wrong, according to recent research. A study by Arindrajit Dube of the University of Massachusetts concluded that the 39% increase in the federal minimum wage proposed by Harkin and Miller would immediately reduce the poverty rate among America’s nonelderly population by 1.7 percentage points. Over time, the reduction would be 2.5 points. That’s 4.6 million people lifted out of poverty immediately, and 6.8 million over time.
That means that the minimum wage increase would play “a modest but important role in reducing poverty and raising family incomes at the bottom,” Dube writes. Since the poverty rate among the nonelderly rose by about 3.8 percentage points during the great recession, he adds, the proposed increase would reverse at least half that loss.
Other recent research underscores the value of raising the minimum wage now and deflates many conservative talking points. David Cooper of the Economic Policy Institute shows that, contrary to the conservative notion that the typical minimum wage-earner is a kid supplementing his middle-class family’s income, 52% are in households with income of less than $40,000 a year. One third are ages 30 to 55 -- in fact, more are older than 55 than are teenagers. The average share of family income that would be provided by a minimum wage earner at $10.10 is 50%.
Findings like these are helping to drive the movement for increases in the minimum wage at the state and local level, which we reported on last month. In Los Angeles, there’s talk of a city ordinance that would raise the minimum wage for hotel workers to $15.37, making it the highest in the nation. The measure is backed by City Council members Mike Bonin and Nury Martinez, and pushed by a coalition of labor groups headed by Maria Elena Durazo of the Los Angeles County Federation of Labor.
No one claims a minimum wage hike is the be-all and end-all of poverty fighting. Dube calls it a “blunt tool,” inferior to such other programs as cash transfers, food stamps and the earned income tax credit. But since conservative Republicans like Rubio aren’t exactly lining up to strengthen those programs, their dismissal of the minimum wage as not good enough sounds like an excuse for doing nothing at all. And that’s certainly not enough.