NCPA - National Center for Policy Analysis


December 19, 2006

When the media give us a portrait of a typical minimum-wage worker, they are almost always wrong.  They usually portray a mother or a father with at least two children, who are unable to make ends meet on the $10,300 provided by the minimum wage (the poverty line for one person is $9,827, for a parent and child $13,200, and for a family of four $19,806).  In fact, the great majority of "minimum wagers" are much different, say the American Enterprise Institute (AEI).

The total number of people on the federal minimum wage of $5.15 per hour is many fewer than most people imagine:

  • In 2005, they totaled only 1.9 million workers.
  • Sixty percent work only part-time and a majority (53 percent) are under the age of 25 -- most of them students or weekend workers.
  • Within this disproportionately large pool of youth "minimum wagers," two-thirds come from families with at least one other family member earning income.
  • Four-fifths belong to families above the poverty line.
  • In fact, the average income of the family of a young individual earning minimum wage is just over $64,000.

Who, then, are the losers from higher minimum wages, and who will actually gain? 

  • Only 12.7 percent of the benefits from a federal minimum-wage increase would go to poor families, while 63 percent would go to families earning more than twice the poverty line and 42 percent to those three times above the poverty line.
  • The majority of minimum wagers are youths, most of whom come from well-off families.
  • Meanwhile, a hike in the minimum wage will hurt low-skilled workers most because those jobs will be increasingly difficult to find; in 2003, the median hours worked by the highest earner of a poor household was 1,720 -- significantly less than full time: 2,000 hours per year.

Source: Bryan Prior and Michael Novak, "Fraudulent compassion," Washington Times, December 18, 2006.


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