If Congress were to go through with the plan backed by President Obama to raise the minimum hourly wage from $7.25 to $10.10, 4.6 million people would rise above the poverty line, a new study says.
The raise in minimum wage would reduce the poverty rate by as much as 1.7 percentage points according to a study by University of Massachusetts – Amherst economist Arindrajit Dube, who explains in his Dec. 30, 2013 report:
“Starting from the current 17.5% poverty rate among the nonelderly population, the estimate suggests a 1.7 percent reduction in the poverty rate from a 39 percent increase in the minimum wage as proposed in the legislation.”
In the long-term, the plan would reduce the ranks of the nation’s poor by 6.8 million, according to the Huffington Post.
Even with those impressive results, Dube pointed out that increasing the minimum wage isn’t the most direct way to fight poverty. Policies like the Earned Income Tax Credit and food stamps are more effective, he writes in the study.