Raising the Minimum Wage Won’t Eliminate Poverty
Democrats all support a minimum-wage hike, even though it’s not clear such a policy is an effective way to fight poverty
The Democratic candidates for president have a lot of ideas and plans for how to fight poverty, many of which were on display at a recent presidential forum on poverty hosted by the Poor People’s Campaign. Elizabeth Warren wants to tax the wealthy to fund programs like universal child care and free college tuition. Kamala Harris has proposed a tax credit for burdened renters. Cory Booker wants to give every American child a “baby bond” at birth to help low-income Americans build wealth. But those ideas often take a backside to one bigger, more ubiquitously agreed-upon idea: The U.S. needs to increase the minimum wage to $15 an hour.
This uniformity around a minimum wage increase is all the more interesting since it’s not clear that it’s a particularly effective — or progressive — way to fight poverty.
For one, consider the demographics of minimum wage workers. They’re young: According to the Bureau of Labor Statistics, almost half of minimum wage workers in 2018 were under the age of 25; only about 25% were over the age of 40. And while minimum wage increases do modestly reduce poverty rates — in a 2014 analysis…
