New Study: $10.10 Minimum Wage Could Lift Millions Out Of Poverty
Raising the federal minimum wage to $10.10 per hour could directly lift nearly five million Americans out of poverty, according to a new study from University of Massachusetts-Amherst economist Arindrajit Dube.
According to Dube’s findings, a $10.10 per hour minimum wage — the same level proposed by a bill co-authored by Senator Tom Harkin (D-IA) and Rep. George Miller (D-CA), and supported by President Barack Obama — would reduce the poverty rate among the non-elderly population by 1.7 percent. Taking lagged effects into account, the minimum-wage hike could eventually reduce the poverty rate by 2.5 percent, lifting 6.8 million out of poverty.
“To put this in context, the poverty rate among the non-elderly rose by as much as 3.4 percentage points during the Great Recession,” Dube writes. “So the proposed minimum wage change can reverse at least half of that increase.”
Dube is not the first economist to illustrate the impact that a minimum wage hike could have on fighting poverty; as this chart from the Economic Policy Center makes clear, a raise to $10.10 per hour would lift minimum-wage income above the poverty line for a family of three for the first time in 46 years.
In addition to helping families in need, raising the minimum wage is also a potent political tool; polls have repeatedly found large majorities in favor of raising the minimum wage and tying it to inflation. Due to the proposal’s popularity, Democrats are expected to make increasing the minimum wage a central tenet of their 2014 election strategy.
H/t: Huffington Post