NCPA - National Center for Policy Analysis


January 22, 2007

The increase in the federal minimum wage Congress passed by a vote of 315-116 is a triumph of feelings over facts.  Sounds great.  The deserving working poor are finally going to be paid a living wage.  Except that it isn't true, says columnist Mona Charen.

  • Fewer than one in five minimum-wage workers lives in a family with income below the poverty line.
  • More than 82 percent of minimum-wage workers have no dependents, according to the Bureau of Labor Statistics (BLS).
  • Minimum-wage workers tend to be young (under 25) and single (often they are students working part time), and a full 40 percent come from homes with an annual income of $60,000 and higher.
  • Never-married workers are more likely than married workers to be paid minimum wage.

One of the Democrats who extolled an increase in the minimum wage reminded listeners that these workers "had not gotten a raise in 12 years."  Well, that's misleading, says Charen:

  • The BLS reports that 63 percent of minimum-wage workers receive a raise after the first year of employment.
  • Only 15 percent are still receiving the lowest wage after three years on the job.
  • The BLS also found that part-time workers are far more likely to be paid minimum wage than full-time employees; only 1.2 percent of full-time, year-round employees earned $5.15 an hour or less in 2005.

Fighting poverty by raising the minimum wage is way off target.  Among the poor, the problem is not so much one of low wages as of non-work -- call it the American Idle.  The Census Bureau finds that 63.2 percent of individuals aged 16 or above living in poverty did not work at all in the year preceding the survey.  Raising the minimum wage obviously does nothing for those who aren't working, says Charen.

Source: Mona Charen, "Minimum-wage hike a feel-good measure," Toledo Blade, January 22, 2007; and "Characteristics of Minimum Wage Workers: 2005," U.S. Department of Bureau of Labor Statistics, May 19, 2006.

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