Who Will Really Benefit From California’s Minimum Wage Hike?
Publication Date: April 2004
Topics: Minimum Wage
Washington – As the California legislature debates raising the state minimum wage to $7.75 per hour as a way to help the working poor, figures from the U.S. Census Bureau show that the bulk of the benefits will not reach California’s poor families.
An analysis of data compiled by the Bureau’s Current Population Survey shows that the average family income of California employees who would benefit from a minimum wage increase to $7.75 is $43,083.
Fully 82% of employees whose wages would be increased by this proposal either live with working parents or another relative, live alone, or have a working spouse. Just 18% are sole earners in families with children, and each of these sole earners has access to supplemental income through the federal earned income tax credit (EITC), a benefit that can effectively boost the income of sole earners with children to nearly $8.75 an hour. Most economists believe the EITC is a far better way to target resources at poor families than risking the threat of job loss for the least skilled by increasing the minimum wage.
California employees affected by proposed $7.75 minimum wage:
• 35% of minimum wage earners live with a parent or relative
• 24% of minimum wage earners are a dual earner in a married couple
• 23% of minimum wage earners are a single earner with no kids
• Just 18% of minimum wage earners are single parents with kids or a single earner in a couple with kids, and each of these sole earners has access to supplemental income through the EITC.
To see figures for other states, visit www.minimumwage.com