Minimum wage hike ineffective fix

Posted on March 24, 2016

In a March 20 article on Tennessean.com, Danna Gonzalez argues that a $15 minimum wage in Tennessee would “ensure working families can provide for themselves and not rely on government assistance.”

Evidence proves this is not the case.

Dr. Joseph Sabia and Thanh Tam Nguyen of San Diego State University examined 35 years of government data across a number of different data sets and determined that minimum wage increases have little to no net effect on spending on — or participation in — welfare programs. In fact, the loss of jobs or work hours associated with a higher minimum wage leaves some employees more dependent on government.

Instead of raising the minimum wage, Tennessee should pursue better alternatives such as a state supplement to the Earned Income Tax Credit. By using the tax code, the EITC is able to boost the paychecks of low-income households without putting their jobs at risk.