Senator Kennedy Ignores Economic Reality of Minimum Wage Increases

  • Publication Date: March 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 a family issue because many of the beneficiaries are women with children. He does not mention that only 8 percent of the benefits from his wage increase will be single mothers, and only 4 percent will be single mothers in poverty.

Senator Kennedy also 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.

Senator Kennedy stated that minimum wage employees have not received a raise since 1997 while federal legislators have received a raise seven times during that span. This classist notion ignores the wage growth that minimum wage employees earn every day through increased experience. Economists at Miami University of Ohio and Florida State University found that over the last 23 years nearly two-thirds of minimum wage employees receive a raise within 1-12 months of employment. Furthermore, these employees received their largest raises during the past 8 years—a time period during which Senator Kennedy claims they received no raises. During this time the median annual wage increase for minimum wage employees was 10.4 percent compared to 1.7 percent for employees above the minimum wage.

“Senator Kennedy has clearly confused his political rhetoric with economic reality,” said EPI’s director of research Craig Garthwaite. “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,” Garthwaite said.