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http://www.huffingtonpost.com/2014/01/02/1010-minimum-wage_n_4532723.html?ncid=edlinkusaolp00000009

Raising the federal minimum wage to $10.10 an hour could help lift nearly 5 million people out of poverty, a new study finds.

If Congress were to go through with a plan backed by President Barack Obama to raise the minimum wage from $7.25 an hour to $10.10 an hour, it would reduce the poverty rate among Americans between the ages of 18 and 64 by as much as 1.7 percentage points, a study released Monday from University of Massachusetts-Amherst economist Arindrajit Dube finds. That would bring about 4.6 million people out of poverty directly and reduce the ranks of the nation's poor by 6.8 million, accounting for longer-term effects.

"What I found is very robust evidence that minimum wage increases tend to have a moderate reduction in the poverty rate." Dube said.

A $10.10 minimum wage would help to reverse some of the damage done by the Great Recession. The economic downturn, which technically ended in 2009, and recovery have been marked by high unemployment and stagnant or falling wages. After the recession, many jobs that did return were low-paying -- with many offering just minimum wage or close to it.

Three-fifths of the new jobs created during the economic recovery paid low-wages, according to an August 2012 analysis from the National Employment Law Project, a left-leaning advocacy group focused on low-wage workers.

The combination of many Americans not working at all or working for not that much money contributed to a 3.4 percent increase in the poverty rate during the recession that has not abated. A $10.10 minimum wage could go a long way in reversing some of that economic damage, according to Dube.

“[The $10.10] increase would erase more than half of the increase in poverty we have seen during the Great Recession,” Dube said. “We’re talking about roughly 5 million less people in poverty in America.”


Dube isn’t the first to highlight the benefits for the working poor of raising the minimum wage. A July analysis from Restaurant Opportunities Center United found that a $10.10 minimum wage would have been enough to lift more than half of the working poor -- or about 6 million people -- out of poverty in 2011.

To come up with his findings, Dube analyzed 23 years' worth of data on past minimum wage increases, controlling for things like regional differences. For comparison, he also reviewed previous literature on the average drop in the poverty rate after a minimum wage increase and calculated the average of those averages.

A few experts said Dube’s estimate is within the range of others they’ve seen, noting that a drop of nearly 2 percentage points is at the higher range of estimates.

“That’s certainly within the range of possibility,” Dean Baker, the co-director of the left-leaning Center for Economic and Policy Research, said of Dube’s estimate. “Could it be somewhat less? Sure. But I think that's not a ridiculous number at all.”

Economists have debated for some time over how much a minimum wage increase affects the poverty rate, according to Baker. Some argue that raising the minimum wage would barely make a dent in reducing poverty because many minimum wage workers are young people just working to make extra money.

“(Dube's study) is just re-confirming that no, actually most of the people we see in the minimum wage are not in that boat,” Baker said. “We’re looking at a lot of people that are the sole supporter for the family or main supporter of their family. There’s a large overlap between the poverty population and the people who would be benefited by the minimum wage increase.”

Still, even Dube himself noted that increasing the minimum wage isn’t the most direct way of reducing the poverty rate. Instead, policies like the Earned Income Tax Credit, food stamps and those aimed at reducing the unemployment rate of at-risk groups are more effective, he said.

“We have to remember that many families in poverty have very little or no connection to the labor market, so of course we can’t expect a wage-based policy like a minimum wage increase to have a very large effect on the poverty,” he said. “But nonetheless, we find it has a moderate-sized impact.”

In addition to reducing poverty, raising the minimum wage to $10.10 an hour would offer other benefits. During the initial phase-in period of the increase, the U.S. economy would grow by $22 billion, resulting in 85,000 new jobs, according to the Economic Policy Institute, a left-leaning think tank.

It could also help close the income gap. More than half of the growth in the gulf between low-income and middle-income Americans is the result of the fact that the minimum wage lost 30 percent of its purchasing power over the past few decades, according to Jack Temple, a policy analyst at NELP.

“If we’re interested in reducing inequality of family incomes, the minimum wage can play an important role,” Dube said.

 

[Evolution_1ne]

not when the cost of living goes up for some strange and unexpected reason

 

[diffusionx]

Instead, policies like the Earned Income Tax Credit, food stamps and those aimed at reducing the unemployment rate of at-risk groups are more effective, he said.

This is true, problem is there is less than zero political will to enhance any of these. We live in a country where ANYONE who takes any of these transfers, including and especially those who are duly employed, are lazy welfare cheat bums stealing from the righteous Real Americans and are probably commies too. Raising the minimum wage doesn't have that political baggage to it.

 

[ReRixo]

but companies will want to keep what they are paying their employees the same cumulatively, so a rise in pay means quantity of jobs goes down, or is this wrong? this is just what right wing economists tell me

 

[Alucrid]

Okay, they go above a specific threshold of dollars. What's the real gains for going above the poverty line for these people?

 

[-PXG-]

not when the cost of living goes up for some strange and unexpected reason

That, and the fact that now you'd have a shit load of currently employed (or rather, UNDERemployed) people who aren't making jack shit to keep up with basic costs, either.

 

[BFIB]

not when the cost of living goes up for some strange and unexpected reason

Bingo. Raise minimum wage, somehow gas will hit $6 a gallon.

 

[bionic77]

The final nail in the coffin of the dollar menu.

Thanks Obama!

 

[BigDug13]

That makes my military pension current worth of $10 an hour of full time worker's salary not very good.

The increase in cost of living that would result coupled with Congress' recent passing of reducing my Cost of Living Allowance raises means I won't get the necessary bumps to counteract this effect.

Not sure how to fix a problem like the nation's poor, but simple minimum wage bumps has far reaching consequences for everyone else.

 

[SolarPowered]

Cost of living will still continue to climb and we'll find ourselves with the same problem in a few years and I'm not saying that it would climb just because of a pay increase in the lower brackets (which is sorely needed).

 

[Hitokage]

There's already enough money in the economy to make the minimum wage increase without causing inflation. It's just not where it needs to be. In other words, you know that CEO to average worker pay ratio? It needs to go down.

Also remember that people in lower brackets earning more means people in lower brackets spending more, which means businesses earning more, and so on.

 

[King Cobra]

This will not help in the long run, this will only raise the cost of living for everyone else. I have a very strong belief that if someone working minimum wage works hard enough they will get ahead. No matter how pessimistic people seem to be now and days about this country it is still very much the land of opportunity so if you work hard enough you will get yourself out of any hole.

 

[entremet]

not when the cost of living goes up for some strange and unexpected reason

Bingo. Raise minimum wage, somehow gas will hit $6 a gallon.

Cost of living always goes up. That's the point of raising the minimum wage.

 

[diffusionx]

This will not help in the long run, this will only raise the cost of living for everyone else. I have a very strong belief that if someone working minimum wage works hard enough they will get ahead. No matter how pessimistic people seem to be now and days about this country it is still very much the land of opportunity so if you work hard enough you will get yourself out of any hole.

Well, this isn't true. Lots of hard working people make very shit money and have no opportunity to dig themselves out, and an infinite number of traps to put them farther behind. "Pull yourself up by the bootstraps" is just simplistic, wrong, and not good policy for a society.

Bingo. Raise minimum wage, somehow gas will hit $6 a gallon.

Gas price increases are bigger than us. Prices have been rising steady since 1998 or so while minimum wage has only been raised once, in 2007. Demand is skyrocketing in emerging markets while supply of easily-obtainable oil is tighter. Raising the minimum wage won't change that, unless it increases demand of gas due to more people driving to work - which would imply the economy is improving.

 

[Downhome]

Yeah, raise that up and everything else will be raised placing them all right back in poverty and in the end nothing changes at all.

 

[Gannd]

Cost of living always goes up. That's the point of raising the minimum wage.

http://www.bls.gov/cps/minwage2012.htm#2


The minimum wage isn't earned primarily by people who need it to survive.

 

[heliosRAzi]

This will not help in the long run, this will only raise the cost of living for everyone else. I have a very strong belief that if someone working minimum wage works hard enough they will get ahead. No matter how pessimistic people seem to be now and days about this country it is still very much the land of opportunity so if you work hard enough you will get yourself out of any hole.

Bullshit. Social stratification and income inequality makes it extremely difficult to do that.

 

[The Adder]

This will not help in the long run, this will only raise the cost of living for everyone else. I have a very strong belief that if someone working minimum wage works hard enough they will get ahead. No matter how pessimistic people seem to be now and days about this country it is still very much the land of opportunity so if you work hard enough you will get yourself out of any hole.

This belief is stupid and factually incorrect.

 

[CyclopsRock]

I don't mean to sound like a dickhead or anything, but the metric of being "lifted out of poverty" has to be the most abused and misunderstood idea to be used to justify things. It's pretty well arbitrary and it also discourages tackling the really big problems, because saying you've lifted 5 million out of poverty is better than lifting 3 million out of poverty, but says little to how much benefit is actually gained.

 

[Frank the Great]

What is this cost of living nonsense? The whole reason the minimum wage needs to be raised is because as the cost of living has risen dramatically over the past couple of decades, the minimum wage has remained stagnant, which has lead to the lowest tier workers losing purchasing power over time. The minimum wage has essentially been on a downward spiral for quite a while, because it hasn't kept up with other rising costs and inflation, and raising it would just correct that.

 

[5amshift]

not when the cost of living goes up for some strange and unexpected reason

You mean the cost of everything? People don't understand that when wages go higher, things get more expensive.

 

[daveo42]

Cost of living always goes up. That's the point of raising the minimum wage.

The current issue is that the cost of living has gone up while incomes have stayed relatively flat. Minimum wages should have continued to increase along with inflation to begin with. A bump in the minimum wage may be beneficial, but there will be a definite spike in cost of living across the board.

I'd love to see a bump like that, because that would mean I'd too would get a bump in pay as companies would need to scale it as to not lose workers around that new minimum. I'm just not sure how big an impact that wage bump will affect consumer goods prices.

 

[TacticalFox88]

Minimum wage should be, adjusting for inflation, be around $21-23 and yet we have people bitching about $10+

GTFO

 

[Gannd]

Minimum wage should be, adjusting for inflation, be around $21-23 and yet we have people bitching about $10+

GTFO

http://www.bls.gov/cps/minwage2012.htm#2

 

[freenudemacusers]

My dad made $5 in the 70s and did just fine

 

[Hitokage]

My dad made $5 in the 70s and did just fine

$5 in 1970 would be worth $30.93 today and $5 in 1980 would be worth worth $14.57 today. Assuming somewhere more near the middle, $5 in 1975 would be worth $22.31 today.

Yeah, he did just fine.

 

[KingGondo]

Minimum Wage Thread Checklist:

- If the poors make $10/hour for doing jobs I deem unworthy of such a lofty wage, my wage needs to be raised too! (CHECK)
- If the poors get more money, we'll have to pay more for Big Macs! (CHECK)

My dad made $5 in the 70s and did just fine

You're on a masterful troll roll today.

 

[heliosRAzi]

$5 in 1970 would be worth $30.93 today and $5 in 1980 would be worth worth $14.57 today. Assuming somewhere more near the middle, $5 in 1975 would be worth $22.31 today.

Yeah, he did just fine.

No, he made only $5 for the entire decade.

Minimum Wage Thread Checklist:

- If the poors make $10/hour for doing jobs I deem unworthy of such a lofty wage, my wage needs to be raised too! (CHECK)
- If the poors get more money, we'll have to pay more for Big Macs! (CHECK)

If we raise the minimum wage, the prices for my Big Mac will go up ten cents! UNACCEPTABLE!

 

[besada]

If only we had some historical data to look at, to see what the effects of raising the minimum wage might be. If only.

 

[SolarPowered]

$5 in 1970 would be worth $30.93 today and $5 in 1980 would be worth worth $14.57 today. Assuming somewhere more near the middle, $5 in 1975 would be worth $22.31 today.

Yeah, he did just fine.

That is pretty fucking wild.

 

[King Cobra]

Well, this isn't true. Lots of hard working people make very shit money and have no opportunity to dig themselves out, and an infinite number of traps to put them farther behind. "Pull yourself up by the bootstraps" is just simplistic, wrong, and not good policy for a society.

I come from a family that absolutely refused to accept to live in the circumstances in which we were born in, we have all pick ourselves from our bootstraps, we know firsthand what hard work and perseverance can do. It happens every day, everyone in the end reaps what they sowed.

Bullshit. Social stratification and income inequality makes it extremely difficult to do that.

Difficult but not impossible, I am not stating that people who work hard will be as wealthy as the next hedge fund manager overnight, but they certainly have a shot at getting themselves out of any situation with enough conviction.

This belief is stupid and factually incorrect.

It's very easy for lazy people to try and brush off that hard work will get you ahead in life, I understand everyone wants to get more money for nothing and are unwilling to persevere those are the kind of people that are stuck at minimum wage.

 

[KingBeyondTheWall]

only $5 for the entire decade

And walked 10 miles to work uphill both ways

 

[KingGondo]

It's very easy for lazy people to try and brush off that hard work will get you ahead in life, I understand everyone wants to get more money for nothing and are unwilling to persevere those are the kind of people that are stuck at minimum wage.

So a single mother with a kid who has to work 2-3 minimum wage jobs with irregular hours and no health insurance isn't "persevering" or "working hard"?

If you're not able to make a livable wage (have your bills and expenses covered with a bit left over) in that situation, society has failed, not you.

 

[heliosRAzi]

UC Berkley did a study on Wal-Mart and the impact of them raising their wages to something livable. If Wal-Mart raised it, if they passed the cost onto consumers, it would be an additional $12 per year for the average shopper. They, of course, could opt to a lower profit margin or leveling the salaries and bonuses for executives and managers, though. But in the worst case, scenario, twelve bucks passed onto the consumer.

 

[Hitokage]

That is pretty fucking wild.

The minimum wage was actually at $10 in today's dollars before, but raises in the minimum wage did not keep up with inflation and so now our minimum wage is considerably less than that.

 

[Gannd]

So a single mother with a kid who has to work 2-3 minimum wage jobs with irregular hours and no health insurance isn't "persevering" or "working hard"?

If you're not able to make a livable wage (have your bills and expenses covered with a bit left over) in that situation, society has failed, not you.

http://www.bls.gov/cps/minwage2012.htm#2


By and large, that woman doesn't exists. But...but...here is this example. The country has more than 300 million people. We have to deal with abstracts when setting policy.

People under 25 make up about half of the minimum wage earners. Only 1.6 million American's earn the minimum wage which is .005% of the population. The fact that she's unmarried means she is 4x more likely to earn the minimum wage than if she was married.

Want to know something else? Most minimum wage earners tend to be white and middle class. They are either kids or people who are earning supplementary income.

 

[Mael]

If your minimum wage is X$ and you raise it to Y$ by only raising the minimum wage will only put people who were paid between X$ and Y$ in the situation of people who were previously at X$.
It's also an efficient way for companies to stop raising their employees since they can justify not giving raises since after all they HAD to raise their minimum wages employee base by default.
There's plenty of examples out there.
I know that here (Not US) it's the worst tool to use to improve the situation of the poor worker base (heck trickle down actually work better if that's even possible).

 

[heliosRAzi]

Difficult but not impossible, I am not stating that people who work hard will be as wealthy as the next hedge fund manager overnight, but they certainly have a shot at getting themselves out of any situation with enough conviction.

There are many people who work hard right now, not to be wealthy, but to get out of the hole. They're the ones who are working two jobs and eighty hours a week and just barely scraping by to provide for themselves and their families. Despite all of their had work, they still live in poverty. The minimum wage raise would help people like that.

 

[johnsmith]

The logic in this thread is moronic.

"The price of everything is rising anyway so why bother raising wages? People will be poor either way!"

Seriously, how many McDonald's franchise owners post here? We know the economics of raising the minimum wage are positive and all the complains are right wing scare tactics in favor of the rich.

 

[Gannd]

There are many people who work hard right now, not to be wealthy, but to get out of the hole. They're the ones who are working two jobs and eighty hours a week and just barely scraping by to provide for themselves and their families. Despite all of their had work, they still live in poverty. The minimum wage raise would help people like that.

There are more social issues that are related to being poor and the minimum wage isn't one of them. Having children out of wedlock means you're far more likely to be poor. Being raised without both parents means you're more likely of being poor and if you're a black male, going to jail and not even graduating form high school. The minimum wage is a canard of the income inequality.

 

[King Cobra]

So a single mother with a kid who has to work 2-3 minimum wage jobs with irregular hours and no health insurance isn't "persevering" or "working hard"?

If you're not able to make a livable wage (have your bills and expenses covered with a bit left over) in that situation, society has failed, not you.

It is easier and less heart breaking to blame others than ourselves for our shortcomings, we can all use these single mother examples but in the end the blame is mostly on ourselves as individuals for the circumstances in which we remain in. We can go for hours talking about whether it is ethically right to have children when you are not in a good economic situation but in the end we are not owed nothing except a chance to make more of ourselves, if we put ourselves in a bad situation than we only have ourselves to blame.

 

[Epsilon-delta]

I come from a family that absolutely refused to accept to live in the circumstances in which we were born in, we have all pick ourselves from our bootstraps, we know firsthand what hard work and perseverance can do. It happens every day, everyone in the end reaps what they sowed.


Difficult but not impossible, I am not stating that people who work hard will be as wealthy as the next hedge fund manager overnight, but they certainly have a shot at getting themselves out of any situation with enough conviction.



It's very easy for lazy people to try and brush off that hard work will get you ahead in life, I understand everyone wants to get more money for nothing and are unwilling to persevere those are the kind of people that are stuck at minimum wage.

Still more bs bootstrap rhetoric. You are the exception, not the norm, and once again people underestimate or don't take into account how much luck plays into it.

 

[KingGondo]

http://www.bls.gov/cps/minwage2012.htm#2


By and large, that woman doesn't exists. But...but...here is this example. The country has more than 300 million people. We have to deal with abstracts when setting policy.

People under 25 make up about half of the minimum wage earners. Only 1.6 million American's earn the minimum wage which is .005% of the population. The fact that she's unmarried means she is 4x more likely to earn the minimum wage than if she was married.

Want to know something else? Most minimum wage earners tend to be white and middle class. They are either kids or people who are earning supplementary income.

We also have to remember that there are many who make more than the minimum wage who are still poor. Having a discussion strictly about those who make the federal minimum wage isn't very helpful when we're trying to address the problem of hourly jobs not being enough to lift someone out of a life of endless struggle.

 

[Gannd]

The logic in this thread is moronic.

"The price of everything is rising anyway so why bother raising wages? People will be poor either way!"

Seriously, how many McDonald's franchise owners post here? We know the economics of raising the minimum wage are positive and all the complains are right wing scare tactics in favor of the rich.

If I'm a McDonald's franchisee and I pay minimum wage, I'm employing people who tend to be white, under 25, and do not rely on the income to live. Why should I have to pay some middle class white kid $10 an hour? All raising the minimum wage will do is make it harder for young people to get employed and gain experience so they do not continue to make a minimum wage throughout their life. It's another transfer of wealth from the young to the old.

 

[The Technomancer]

Yeah, raise that up and everything else will be raised placing them all right back in poverty and in the end nothing changes at all.

So the cost of living goes up when the minimum wage doesn't go up...and the cost of living goes up when the minimum wage does go up...is there any solution or is everyone just fucked?

 

[Carnby]

If we raise the minimum wage, where does the money to pay the employees come from?

 

[Hitokage]

It is easier and less heart breaking to blame others than ourselves for our shortcomings, we can all use these single mother examples but in the end the blame is mostly on ourselves as individuals for the circumstances in which we remain in. We can go for hours talking about whether it is ethically right to have children when you are not in a good economic situation but in the end we are not owed nothing except a chance to make more of ourselves, if we put ourselves in a bad situation than we only have ourselves to blame.

External forces and external effects exists. We're not all closed systems.

 

[The Technomancer]

Difficult but not impossible, I am not stating that people who work hard will be as wealthy as the next hedge fund manager overnight, but they certainly have a shot at getting themselves out of any situation with enough conviction.

"Anyone can do it" is not the same as "everyone can do it". The ability of any one individual to change their circumstances is irrelevant when we're talking about the statistical trends of millions of people.

 

[No Love]

This will not help in the long run, this will only raise the cost of living for everyone else. I have a very strong belief that if someone working minimum wage works hard enough they will get ahead. No matter how pessimistic people seem to be now and days about this country it is still very much the land of opportunity so if you work hard enough you will get yourself out of any hole.

Uh... really? :\

 

[Gannd]

We also have to remember that there are many who make more than the minimum wage who are still poor. Having a discussion strictly about those who make the federal minimum wage isn't very helpful when we're trying to address the problem of hourly jobs not being enough to lift someone out of a life of endless struggle.

You're correct. We do have a lot of people that earn a minimum wage and are still poor. But, raising the minimum wage won't solve this problem. I think the problem tends to be more social and the data seems to back that up. If you're poor and don't want your kids to be poor? Tell them to graduate from high school, get married before having any kids, and stay married once you have kids. We have a system that raises us to be consumers and to producers. We have millions of jobs that are unfilled because they require a skilled trade but we got rid of vocational programs in high school because a bunch of rich white people don't like skilled labor.

But...no the minimum wage is the issue. It's not and we should stop being distracted by it.