Increasing Minimum Wage Will Decrease Poverty, Studies Agree

The debate over raising the federal minimum wage is hot in Washington D.C., especially after President Obama made it one of the pillars of his State of the Union Address earlier this year. At a recent town hall meeting with Republican Congressman Joe Heck of Nevada, he argued that raising the minimum wage wasn’t the best way to attack poverty. Heck pointed out that just 3 percent of full-time workers lived below the poverty level. Heck’s suggestion is to get people working in full-time jobs.

His statistic that just 3 percent of full-time workers live below poverty may seem compelling in some respects. Certainly unemployment is more of a contributor to poverty than low wages. However, the number of people who could be lifted out of poverty with a raise in the minimum wage to $10.10/hr is quite significant.

Raising the minimum wage to $10.10 an hour would reduce the number of people living in poverty by 4.6 million.

That according to a recent study published by UMass Amherst economist Arin Dube. While there is some disagreement among economists about the negative impact via possible job loss, even the negative studies agree that the raise in minimum wage will reduce poverty. In fact, Dube’s paper uses the findings from 12 other major studies on the impact of raising the minimum wage. For the most part, recent studies predict very little if any negative effect on jobs.

While Joe Heck is right that more employment will help people in poverty, that idea isn’t mutually exclusive with the fact that raising the minimum wage will lift millions of people out of poverty right now. That’s something that can be done to fight poverty immediately without raising the deficit one nickle, making cuts to other services or raising taxes. It also requires no creation of new government agencies, etc.