A $15 Minimum Wage Is Not the Best Way to Help Poor Workers [View all]

[think]

A $15 Minimum Wage Is Not the Best Way to Help Poor Workers

By Harry J. Holzer - Dec 21 2016 9:49 AM ET

Holzer is the John LaFarge Jr. SJ Professor of Public Policy at Georgetown University and served as Chief Economist for the U.S. Department of Labor in the Clinton Administration.

Without a federal increase, it will hurt the few people it helps—but there is another way

Around the country, the Fight for $15 campaign continues to advocate for minimum wages of $15. Several states and large cities, including Seattle, San Francisco, Los Angeles, New York and Washington, D.C., have passed such minimum wage ordinances, which will phase in over several years. The worthy goal is to help low-income workers earn a better living.

But there a few problems with this logic. For one, most minimum wage earners are not poor adults. They are, instead, young people (ages 16 to 24) or second earners in families where a spouse has a higher-wage job. So minimum wage increases help some poor heads of households, but is not well-targeted on them.

More importantly, by making unskilled workers so expensive for employers to hire, minimum wage increases can reduce employment among the very groups we are trying to help. When the minimum wage increases are moderate in size—up to, say, $10 an hour—such employment losses are very small, so the likely tradeoff between higher wage levels and lower employment becomes worthwhile...

Read more:
http://time.com/4608394/15-dollar-minimum-wage-eitc/