Michigan’s unemployment rate has skyrocketed 88 percent from June 2008 to June 2009, yet some politicians are pushing a proposal that would cause additional job loss in the state (“Ballot proposals would drive final nails into Michigan’s coffin,” July 24). Passing additional minimum wage increases, while a popular political tool, will only hurt vulnerable, entry-level workers.
Wage increases — typically meant to alleviate poverty — fail to target those families who are most in need. Census Bureau data shows that 16.5 percent of those who will benefit from the recent federal wage hike are raising a family on the minimum wage. The vast majority of minimum-wage earners are teens living at home (41 percent) and second-wage earners in a household (21 percent). Research from Syracuse University shows that 83 percent of the benefits of a minimum wage increase went to families above the poverty line.
Decades of economic research show that wage increases cause job loss and do not effectively target poverty. Alternative policy options, including the Earned Income Tax Credit, which delivers 90 percent of its benefits to poor families without eliminating job opportunities for the most vulnerable workers, are much better solutions for Michigan’s work force.
Kristen Lopez Eastlick ,
Senior Economic Analyst,
Employment Policies Institute,