Those on the Left tend to argue that raising the minimum wage would put more money in the pockets of low-income families, ultimately lifting more Americans out of poverty. While this sounds like a straight-forward way to help people, reality is much more complicated and unfortunately, minimum wage hikes tend to backfire on those we want to help.
First, it's important to understand that minimum wage earners tend to be younger (about 50 percent are under age 25), and most are not the primary breadwinner in their households. Raising the minimum wage results in less hours and fewer jobs for these workers who are just starting out, creating barriers for those who are looking to get a foot in the door and climb the economic ladder.
A better way to help alleviate poverty is to increase the number of two-earner households. IWF’s Rachel DiCario Currie explains:
In 2015, the Census Bureau reported last week, the overall poverty rate among families was 10.4 percent. But among families with a female householder and no husband present, it was 28.2 percent. And among married-couple families, it was only 5.4 percent.
In fact, during all the years for which the bureau offers data on this last group — 1973 to 2015 — the Census poverty rate among married-couple families has never once gone above 7.6 percent, and only twice (in 1982 and 1983) has it gone above 7 percent.
Meanwhile, since 1959, the Census poverty rate among families with a female householder and no husband present has never once gone below 25 percent, and it has been at or above 28 percent for all but four years (1999, 2000, 2001, and 2002).
Last year, the Census poverty-rate gap between these two groups — that is, between married-couple families and female-headed families with no husband present — was nearly 23 percentage points. If we compare only families with children under the age of 18, the gap was 29 percentage points.
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