Minimum wage increases and job loss

Alex Adrianson of the Heritage Foundation’s “Insider Online” blog takes note of recent evidence contradicting a popular left-of-center talking point on the minimum wage.

When proponents say studies show that raising the minimum wage does not cost jobs, they’re talking only about the studies they agree with, explains Michael Saltsman: “In a comprehensive, 182-page summary of the research on this subject from the last two decades, economists David Neumark (UC-Irvine) and William Wascher (Federal Reserve Board) determined that 85 percent of the best research points to a loss of jobs following a minimum wage increase.”

Another problem:

Twenty-eight states raised minimum wages in the four years prior to passage of the last federal minimum wage increase. Economists from Cornell and American Universities, writing in the Southern Economic Journal, found no associated reduction in poverty rates.

One reason is poor targeting. According to the Census Bureau, roughly 60 percent of people living in poverty don’t currently work, and thus can’t benefit from a raise. Of those who do work and would be covered by the President’s $9 proposal, Census Bureau data show that the majority live in families far above the poverty line. Across all covered minimum wage earners, the average family income is $50,789.

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