Raising Minimum Wage Won’t Lower Poverty According To Cornell Professor
As most of America now knows, President Obama has called for the minimum wage to increase to $9 an hour, and once again reports out of Cornell University accommodate the request, asserting such an increase will not change poverty rates in the United States. As he stated in 1999, 2004 and again in 2008—pretty much every time a minimum wage increase is on the table—professor of policy analysis and management Richard Burkhauser says 30 years of evidence attests an increased minimum wage has no positive effect on poverty rates.
“The reason is that most minimum wage earners are not the stereotype full time heads of poor families he provides but second or third earners in a non-poor household,” Burkhauser says. “The reality is that minimum wage increases are job killers for the very folks whose employment has been hit hardest by the Great Recession and its aftermath, young low skilled workers. These workers have the highest unemployment rates of all Americans and raising the minimum wage will only make it more difficult for them to find jobs in our still weak recovery.”
Burkhauser likes to cite a 2008 report conducted by the Employment Policies Institute which found the majority of the working poor are not helped by a minimum wage increase and the majority of them don’t even live in poor families. The study supposedly revealed most workers who benefit from an increased minimum wage don’t live in poverty and often live in households earning three times the poverty limit. According to the study, only 15 percent of those benefiting from a minimum wage increase actually live in poverty. The same study found most families living in poverty won’t benefit at all from a higher minimum wage but instead by face an increased risk of job loss to higher-skilled workers who are attracted to the higher wage.
And in 1999, Burkhauser actually said a better solution to attacking poverty—rather than increasing minimum wage—was to expand earned income tax credits. Oh sure, let’s have the government hand out more money rather than private enterprise. It’s not as if the deficit isn’t large enough already. Hopefully he’s changed his tune on that matter in the past 14 years.
Burkhauser may make some good points with all his facts and figures—and they may be accurate in many areas of the country where average household income is higher and most jobs that pay minimum wage are unskilled positions that are worked by those lacking a high school diploma, but his statements don’t apply everywhere.
Take, for example, Iron County, Missouri. I grew up in the beautiful region once called “Missouri’s Best Kept Secret.” Although the area once housed manufacturing and mining jobs, those days are gone as industry left the area two decades ago. The place I still call home is now overrun with poverty. Whereas in other regions people work throughout their lives to someday enjoy a comfortable retirement, in Iron County many people work their whole lives just to try and escape poverty. A full 10 percent of the population are veterans, and 22 percent of my friends live below the poverty level—including almost 28 percent of the children.
The average income in Iron County? Just $18,000 a year. Here, and in other places like it, an increase in the minimum wage will make a huge difference. It won’t take jobs because they’re already scraping by on the bare minimum. It won’t simply help unskilled workers. Maybe you should think outside of your New York bubble Mr. Burkhauser.
[Image via Shutterstock]
I want more stuff like this!