$15 Minimum Wage Won't Help Poor But Will Kill 6.6 Million Jobs

Across the country cities continue to increase the minimum wage. Los Angeles County voted to raise the minimum for all workers to $15 per hour, and a New York wage board mandated that all fast-food workers in the state make at least $15 an hour.

Meanwhile, Sen. Bernie Sanders introduced a bill that would raise the federal minimum wage to $15 by 2020.

"It's time to reduce poverty, expand the economy and create good-paying jobs," he exclaimed.

But this begs a question: Would raising the minimum wage to $15 an hour actually help many families and individuals in poverty? In new research jointly published by the American Action Forum and the Manhattan Institute, the answer is a resounding no.

In reality, raising the minimum wage is not a clean victory for the poor. Yes, a minimum wage hike to $15 an hour would help millions of workers with higher earnings. But it would also hurt millions who would lose earnings because they cannot attain or retain a job.

And the kicker: Only a very small percent of any income gains would go to workers who are actually in poverty.

In our research, we specifically analyze the impact of raising the minimum wage on the low-wage workers the policy is intended to help. We project a range of job losses and net income gains.

Our research finds that raising the federal minimum wage to $15 an hour by 2020 would cost 6.6 million jobs. For hourly workers who earn between $7.25 and $15 per hour, this would result in a net income gain of $52.8 billion. If those earning just above $15 an hour also get a wage bump, the net increase in earnings would grow to $105.4 billion.

But how much of the additional $100 billion in earnings would help the poor? We find that only 6.7% of the increase in pay would go to workers living in poverty.

Read the rest of this IBD editorial HERE.

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