NCPA - National Center for Policy Analysis

Welfare Mothers Less Likely to Work

April 4, 1996

Surprisingly, a higher minimum wage actually makes it less likely that welfare mothers will go back to work. That is the conclusion of a new study by Peter Brandon, a researcher at the University of Wisconsin's Institute for Research on Poverty.

  • While a higher minimum wage did bring more people into the labor force, they were often better educated high school and college students.
  • Unfortunately, the welfare mother with little education and work experience was "crowded out" by these competitors.

Most minimum-wage workers are not the sole supporters of their families. Only about 11 percent of minimum-wage workers are either single parents or married in a one-earner family. And more than one-third of them live with their parents, according to a study from the Employment Policies Institute.

Unions pushed an increase in the minimum wage because they stand to benefit indirectly -- since it would push up wages in the entire labor market. And higher labor costs inevitably get passed along to consumers in the form of higher prices.

Source: Perspective, "Minimum Wage Mistake," Investor's Business Daily, April 4, 1996.


Browse more articles on Economic Issues