Secretary of Labor Robert Reich, calling for an increase in the federally mandated minimum wage, claims that nearly two-thirds of minimum wage workers are adults and that more than one-third are their families' sole breadwinners. In fact, however, most of those earning the minimum wage are not poor and most of the poor are not working.

• In 1992, only 198,500 of the 4,735,000 minimum wage workers were adult householders.

• Only 1.2 percent of all minimum wage workers (about 58,600) are adult heads of households with less than $10,000 of income.

• Single parents make up 6.5 percent of the minimum wage workforce, and only half of them work full-time.

• Almost 60 percent of poor people are not working, and only 9.2 percent have full-time jobs.

Although the higher federal minimum wage proposed by President Clinton would do little to abolish poverty, it would cause real hardship for some low-income Americans, the very people it is designed to help. A large majority of scholarly studies demonstrate that increasing the federal minimum wage causes higher unemployment. Those who suffer are most likely to be teenagers, racial minorities and low-skilled workers.

• Teenage unemployment rose sharply when the minimum wage was increased in 1990 and 1991.

• The 1990 and 1991 increases in the minimum wage were accompanied by rising nonwhite unemployment that peaked at 13.1 percent in June 1992.

• The minimum wage reduces on-the-job training opportunities that allow low-skilled, low-income workers to rise out of poverty.

An increase in the minimum wage would also shock the labor market and might trigger a recession, especially since this is a time of economic uncertainty. In the past, increases in the minimum wage have triggered recessions or prolonged depressions. For example:

• Evidence demonstrates a link between minimum wage increases and the recessions of 1990-91 and 1974-75.

• A good case could be made that both the 1979-80 economic downturn and the recession that began in late 1981 were exacerbated by minimum wage increases, but the link is less obvious because inflation and other factors were also involved.

• A minimum wage requirement mandated by the National Industrial Recovery Act in 1933 halted an improvement in unemployment and deepened the severity and length of the Great Depression.

The higher unemployment rate in the recessions of 1990-91 and 1974-75 helps explain why, over the past two decades, the poverty rate rose in the year after the completion of each minimum wage increase.

In short, the evidence suggests that raising the minimum wage would not reduce poverty, would increase unemployment among the most disadvantaged groups in American society and would increase the probability of a recession within a year.

Source: Richard Vedder and Lowell Gallaway, "Should the Federal Minimum Wage Be Increased?" NCPA Policy Report No. 190, February 1995, National Center for Policy Analysis, 12770 Coit Rd., Suite 800, Dallas, TX 75251, (972) 386-6272.