Who will really benefit from New Jersey’s minimum wage hike?
U.S. Census Data Show Just 16% of Minimum Wage Recipients Are Sole Earners in Families With Children
Publication Date: February 2005
Topics: Minimum Wage
Trenton – The Employment Policies Institute (EPI) testified today before the New Jersey Assembly Labor Committee on the negative economic consequences of raising the state minimum wage to $7.15 per hour. EPI presented figures from the U.S. Census Bureau that show the vast majority of the benefits of such an increase will not reach its intended target—New Jersey’s working families.
An analysis of data compiled by the Bureau’s Current Population Survey shows that the average family income of New Jersey’s employees who would benefit from a minimum wage increase to $7.15 is nearly $55,000 a year. Why? Because fully 84% 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 16% of beneficiaries will be sole earners in families with children, and each of these sole earners has access to supplemental income through the federal and state earned income tax credit (EITC). Research from Michigan State University and the Federal Reserve found that the EITC is far more efficient at actually helping those in poverty than an increase in the minimum wage.
“The proposed minimum wage increase is a poorly targeted attempt to help New Jersey’s low income working families,” said EPI’s director of research, Craig Garthwaite. “The vast majority of benefits will not go to poor families and the majority of poor families will not receive a benefit.”
New Jersey employees affected by proposed $7.15 minimum wage:
· 47% of minimum wage earners live with a parent or relative
· 19% of minimum wage earners are a dual earner in a married couple
· 18% of minimum wage earners are a single earner with no kids
· Just 16% 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.
For a graphic representation of this data or to see figures for other states, visit www.minimumwage.com