Senator Kennedy Ignores Economic Reality of Minimum Wage Increases,
A Federal Minimum Wage Hike Will Hurt Not Help the Poor
Publication Date: October 2005
Topics: Minimum Wage
Washington – While introducing his amendment to increase the federal minimum wage to $7.25 an hour, Senator Edward Kennedy (D-MA) chose to ignore the economic reality of mandated wage increases. Senator Kennedy claims that his minimum wage increase is meant to help hurricane Katrina victims, many of whom are poor minorities. He does not mention that only 8 percent of the beneficiaries from his wage increase will be single mothers, and only 4 percent will be single mothers in poverty.
Senator Kennedy further claims that raising the minimum wage is a minority issue, but he declines to mention that only 4 percent of the benefits will go to African American families living in poverty. Senator Kennedy also ignores research from Cornell University, which found that African American young adults suffer four times more employment loss from a minimum wage increase than other affected employees. In the four states affected by the hurricane, this would amount to another disaster.
“Senator Kennedy has clearly confused his political rhetoric with economic reality,” said EPI’s executive director Rick Berman. “He doesn’t want Americans to know that only 15 percent of the beneficiaries from his wage increase are the single parents with children he so often references. He doesn’t want Americans to know that half of the beneficiaries are 25 or younger, the majority don’t work full time, and a quarter work fewer than 20 hours a week. He certainly doesn’t want Americans to know that because the majority are dual earners the average family income of a beneficiary from his proposed increase has a family income of nearly $42,000 a year.”
“Decades of research show that increasing the minimum wage creates job loss for low-skill employees while providing the majority of benefits to non-poor individuals who are not raising a family on a single minimum wage income,” Berman said.
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding entry-level employment. For additional information or to schedule an interview with Rick Berman call Sarah Longwell at 202.463.7650.