Minimum Wage Increases Hurt Less-Educated Single Mothers, Study Shows
Recent Federal Wage Hike Is Ineffective At Combating Poverty, Counterproductive For Vulnerable Members Of The Workforce
Publication Date: September 2007
Topics: Minimum Wage
Washington, DC — A new study released today by the Employment Policies Institute (EPI) finds that less-educated single mothers suffer an overall decrease in their income following a minimum wage increase. The study, authored by University of Georgia economist Joseph Sabia, uses 15 years’ worth of federal survey data to calculate that for every 10 percent increase in the minimum wage, the average single mother without a high school diploma sees her income decline by almost 9 percent.
Previous research from Professor Sabia and Cornell University economist Richard Burkhauser shows that only 3.8 percent of the benefits from the recent federal minimum wage increase will go to poor single mothers, and only 3.7 percent will go to poor African American families. Meanwhile 87 percent of the benefits will go to families that aren’t poor.
These findings are in stark contrast to much of the rhetoric employed by minimum wage advocates. Poor, low-skilled single moms are often portrayed as the primary beneficiaries of government-ordered raises. Economic research shows, however, that most employers respond to artificially increased labor costs by cutting hours or — in the worst cases — jobs altogether. The brunt of that cost-cutting falls on the most vulnerable members of the workforce — a group that includes single moms without a high school diploma.
“Minimum wage advocates are completely misguided in their attempts to help low-income families,” said Jill Jenkins, chief economist at the Employment Policies Institute. “Professor Sabia’s new research demonstrates that less-educated single mothers are impacted in a largely negative fashion by minimum wage hikes while very few educated single mothers are affected at all. This result makes it all-too-clear that the recent increase in the federal minimum wage is worse than an exercise in futility — it’s an exercise in political pandering dangerously detached from economic reality.”
For a copy of Professor Sabia’s study, titled “The Impact of Minimum Wage Increases on Single Mothers,” visit EPIonline.org.
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding entry-level employment. For more information or to schedule an interview, please contact Tim Miller at 202-463-7650.