Higher minimum wages increase job losses

Posted on May 19, 2009

Advocating a higher minimum-wage or “living wage,” is severely misguided (column, “Lack of a living wage is at core of many of society’s woes,” May 8). Decades of economic research have shown that mandated minimum-wage raises increase job losses, particularly among vulnerable groups like teens, minorities and adults without a high-school diploma. This job loss is exacerbated in a weak economy.

In fact, the vast majority of minimum-wage earners are teens living at home (41 percent) and second-wage earners in a household (21 percent), whose income is supplemental to the head of the household. Research from Syracuse University shows that the overwhelming majority (83 percent) of the benefits of a minimum wage increase went to families above the poverty line.

Those concerned about the working poor should instead support increasing the earned-income tax credit, which delivers 90 percent of its benefits to poor families without eliminating job opportunities for the most vulnerable workers.

Kristen Lopez Eastlick
Senior economic analyst
Employment Policies Institute
Washington, D.C.