David Neumark gives us a starting point to an answer:
It's conceivable that the minimum wage could be a boon to the poor even though it destroys some jobs. Those low-wage workers who keep their jobs are better off, after all, and they are bound to outnumber the losers. The net effect could be beneficial to those at or below the poverty line. Neumark and Wascher, however, have found that for every poor family that gets out of poverty thanks to a change in the minimum wage, there is a non-poor family that falls into poverty.H/T: The other Craig NewmarkNeumark, now with the Public Policy Institute of California, says that many low-wage workers aren't poor, or even close to it. About a third of them, including a lot of middle-class teenagers, live in households with above-average incomes. Raising the pay floor makes it easier for them to buy gasoline and movie tickets, but it does nothing to combat poverty.
What's more, he's found, the people most likely to lose their jobs because of the minimum wage are not middle-class teens but poor adults.
Posted by Kevin on March, 7 2005 at 05:11 PM
