$10.10 Minimum Wage Would Lift 4.6 Million Out of Poverty, Study Says

As Congress debates the increase, a new study shows the real-world impact of raising hourly wages

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President Barack Obama answers questions during a press conference in the East Room of the White House August 9, 2013 in Washington.

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.

[Huffington Post]

48 comments
rainmannt
rainmannt

$10.10 Minimum Wage Would Lift 4.6 Million Out of Poverty.  $35 Minimum Wage Would Lift Almost Everybody Out of Poverty.


MikeHenry1
MikeHenry1

JMA why so mad... u are one of those who probably make like 18-20 an hour so this doesnt bother ya,  others would be happy,    but i could be wrong

JMA
JMA

This is utterly idiotic. 


1) It's people's jobs to lift themselves out of poverty by gaining skills that make their labor more valuable. There are job training programs, but given the current American education system, basic reading and writing skills would be a wonderful place to start. 


2) Want to make the bare minimum someone, completely unskilled with no experience, is allowed to be paid, $10.10? Great, cut the number of minimum wage jobs by 25%. Will that "lift people out of poverty"? 


3) The silent tax in the United States is INFLATION and the devaluing of money. Gasoline was .95/gallon when I was 18, but the government is printing more and more money, making each dollar worth less and less. 


This article is proof that TIME Magazine, which I'm surprised is still in circulation, is just another Obama rag. Pretty amazing that this article came out the day after the announcement was made. It's almost as if it was leaked to the lapdog media well in advance...


You're being played like a puppet, America. 

RealityyCHECK
RealityyCHECK

85% of all studies agree the minimum wage causes job losses and increases poverty. This is an outlier. 


And if this report were true, why havent minimum wage increases decreased poverty in the past? They never have, and this report is utter hogwash, pushed by UNIONS who want to kill competition.


Minimum wage is more aptly titled the Mandatory Unemployment For Low Skilled Workers Act.

TheodoreHyczko
TheodoreHyczko

it will lead to inflation and cost of living increases and lower the standard of the middle class

JoshuaLeTrole
JoshuaLeTrole

Simply peg increases in minimum wage to inflation rate.  But starting at $20/hour would force capitalists to compete for workers, and workers would choose jobs that matched their passions not their need to survive.  $20/hour minimum wage.  A new WPA with such wages could rebuild our infrastructure and the capitalist scum would have to compete for labor.  

Of course, what we really need is a maximum wage of $1 million/year, with 99% tax on everything over 1 million.  Also, taxes should be the same for all forms of income whether from wages or capital gains.  Return taxation levels to Ronald Reagan's in 1987. Then then lots more people would be better off.  The Bush/Obama tax give-aways to the rich must stop.


jeffmckay117
jeffmckay117

Wouldn't the trickle down effect from that cause goods and services to increase, leading to the poverty line increasing as well and being right back where we were but with people "making more"?

jenniferherrera78
jenniferherrera78

I completely agree with Zach B. If companies increase the minimume wage and increase the price of product? What is new? Last I checked Insurance companies can increase their costs if they even think of loosing money. Prices no matter what you say or do will go up. Gas prices would go up if they predicted there would be a increase of demand. The CEO of a company will ALWAYS get a bigger raise then the year before. It doesn't matter how bad you want prices to go down. The motto of companies today is bottom line. So if the 98% of the population get better pay it's a bad idea. Your ideas of keeping prices down will never work out if you think paying people less will make things better. It only leaves you with a disgruntled worker worried about getting their electricity cut off in -22 degree weather instead of making your order right.

azmalhome
azmalhome

Time magazine like to reveal the news according to super power leader's choice. Time don't  has any interesting of which countries are going to civil war, because of stupid leader's worse step. example Bangladesh is going to civil war because of blood sucker sheikh hasina. 5th January have been killed 25 people at least, more thousand more critical injury. why don't have any news of it. http://azmalhome.wordpress.com/



JeanneMariePosthumus
JeanneMariePosthumus

Things like earned tax credits and food stamps just keeps people from being independent. Not too mention that not everyone can receive those benefits :/ Just raise the minimum wage please :D

Mr.Wallingford
Mr.Wallingford

It will always amaze me the things people will write to defend the wealthy minority to the detriment of the majority. 

Zolicon1
Zolicon1

NOT GOOD ENOUGH ALL PEOPLE SHOULD BE LIFTED OUT OF POVERTY.

How would You feel if You were amongst those who were left to live in Poverty ?

ZachB
ZachB

Those who continue to falsely claim increasing the minimum wage affects jobs doesn't understand economics, or what happened in America in 1914 because of Henry Ford more than doubling the average minimum wage. This man famously once said “There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.” - Henry Ford


Henry Ford more than doubled his workers pay from the average $2.32 / day to $5. Reason, was to create a new market for the very product his employees were making. If his workers wages increased, they might be able to afford to buy what they make, increasing the local economy substantially. It was a resounding success that pulled America out of a deep recession, created the American middle class, made the "American dream" which led to thousands of immigrants coming to America, and birthed "fordism" throughout the world. Henry Ford’s instant increase of wages, and his sharing of his wealth with his employees sparked an economic growth for an entire nation (and soon later the world) during a time of deep economic retraction. Even after being labeled a evil socialist, he became a billionaire, not by hoarding more of his money, but by paying more. He grew his wealth by growing that of his employees.


"A business that makes nothing but money is a poor business." - Henry Ford


In todays world, the largest economy is now the European Union,($16.566 trillion annual GDP vs Americas $15.68 trillion) has an average minimum wage of €11.10, which translates to $14.94 (where the popular #Fightfor15 comes from). The European Union with over 500 million citizens has one of the lowest unemployment rates in the world, coupled with Universal Healthcare, Free Higher Education, "Cap and Trade", along with strong industry and environmental regulations. All of these things are unthinkable in America and are considered "job killers". Europe on the other hand has continued to apply "fordism" and proven this false like America once did in our past.


Before Henry Ford died in 1947, he once warned. "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

JohnDavidDeatherage
JohnDavidDeatherage

The Minimum Wage Law movement is politics masquerading as economics.

sillybilly
sillybilly

I just want to know what happens to the guy currently making $10.10/hr now, or even $11 or $12?

VijayBanga
VijayBanga

Do not insult Labor the very base and secret of prosperity of US and make the wage as  $15

NaveedXVO
NaveedXVO

"4.6 million people would rise above the poverty line, a new study says."


For the few years that all of these employees aren't replaced by robots or off shored. Unintended consequences ftw!

RB1
RB1

The moment the minimum wage is raised every business owner will raise the price of their products regardless if they hire anyone or not!  Look at the Pacific Northwest and see how the higher minimum wage there has simply raised the price of everything! Even McDonalds Dollar menu items are Two Dollars there!

GayanehAnnaDermarkarian
GayanehAnnaDermarkarian

@JMA Gasoline has risen in price for more reasons than inflation, Einstein. Not everything has increased at an alarming rate- how do you explain the fact that inflation has not raised the relative value of clothing? In fact inflation is at a history low 1.5%- ideal inflation is generally agreed to be 2-3%- it's even lower than average. 


Your logic contradicts itself.. if you believe inflation is such a big problem, why would you not want to raise minimum wage prices to combat inflation? The minimum wage 50 years ago is equivalent to $9.50 today when adjusted for inflation. Why should it be $7.25 today?? 


If every single person in America became more skilled, there still wouldn't exist enough jobs for everybody in the labor force. 


Great, cut the number of minimum wage jobs. Who's going to wash the dishes in restaurants, drive garbage trucks, etc? Are YOU going to take your garbage to an energy generator or landfill? 


And if you had been paying any attention at all to News and Media, you'd recognize that they've been turning out articles ASAP for quite a while now...


AmaranthSparrow
AmaranthSparrow

@TheodoreHyczko Inflation and increased cost of living happens regardless of minimum wage increases. Minimum wage should adjust in relation to cost of living; the purpose of the minimum wage is to ensure that all full time workers are able to earn enough money to support themselves and their families.

As for the middle class, it is already disappearing.The national median household income is the lowest its been since 1996, and is still trending downward. This is because more and more middle class families are slipping into poverty while the wealthy are earning an increasingly disproportionate amount of the money.

Studies indicate that increasing the minimum wage will lift some 6+ million people back above the poverty line; more importantly, these people will be able to save and invest in their futures and the futures of their children.

AmaranthSparrow
AmaranthSparrow

@jeffmckay117 Not exactly. First of all, inflation occurs regardless of the minimum wage, which is why the minimum wage needs to be increased again.

Second, capitalism relies on consumption, and consumers need money to purchase things; increasing wages increases the buying power of the consumer. So, for example, if a grocery store increased the wages of their stockers, those stockers would also have more money to spend when they go grocery shopping.

PamelaThompson
PamelaThompson

@ZachB  You are correct that Ford doubled his worker's pay.  He also shortened their work week.  He did this as Mcloud pointed out, to get his pick of the very best and most productive workers. In exchange for that high pay he had VERY high demands of his workers. His higher wages made workers work harder because they knew that they couldn't make as good anywhere else for the skill set that they had.  They also knew that there was always someone else willing to take his job if he/she didn't perform at the highest level.  Henry Ford figured out he could get better work and just as much production out of his workers if they had an extra day of rest and family time. But, this was his choice a personal and business decision.  It was not under government mandate. 

Also I think there are many programs that can/could/do work for a population of 5 million vs. a 300m population.  

Much of this push is by the unions.  Here in ATL we had some fast food strikes......but when reporters went to cover the story the only people "on strike" were union workers, "representing the FF workers".   The reason the unions push for higher wages are because many union contract pay is tied directly to the minimum wage. If the lowest union work is paid a minimum 3-5X the minimum wage, of course it behooves them to push for higher minimum wage.  


You may find yourself punching your burger order into a screen rather than giving your order to the girl that used to be behind the counter.  Because,  the owner decided to pay a one time purchasing fee for the order screens rather than pay the ongoing cost and mandated insurance for a live person.  He will pick the best workers that show up, are nice to customers and know/learn everything they can.  The rest he will get rid of.  So now you have a higher wage but fewer people working.  


I work to make money, FOR ME......Of course it's a beautiful thing when I can put other people to work as well.  But at the end ofthe day every business owner is in business to make money for himself and his/her family.  It should be the free market and free choice that determines pay.......As McLoud said......Not all workers are worth the same amount of money.  The one's that are worth it and have the gumption to ask for more will make more. That that don't work as hard won't ever make as much. 

TiggehMcLoud
TiggehMcLoud

@ZachB  The United States has 300 million people; the EU has over 500 million.  If they didn't have such a high minimum wage maybe they'd have 5/3*16.566=$27.61 Trillion GDP since they have 5/3 time our population.  Oh, is that poor reasoning based on a cum hoc ergo propter hoc fallacy?  Well, so is your reasoning that if we increased the min wage to $14.94 we'd have a trillion dollar increase in GDP.

Face it, all you guys have are emotion and bad reasoning.

BTW, "Fordism" is where an employer decides to hike his workers' pay on his own reasoning without government force.  Those workers were worth a lot more and Ford's competition were paying far less than they were worth.  And raising his workers' pay allowed him to pick the cream of the crop of the blue collar workers at the time.  But not all workers are equal and raising the MW would result in some people who would be able to work at Walmart as janitors or Burger King as Burger flippers now out of a job completely.

JohnDavidDeatherage
JohnDavidDeatherage

@sillybilly Prices go up, employers try to replace people with machines, jobs are offshored where possible, if you are unproductive at 10.00 you lose your job, and a few people actually make more money.


But democrats have scored points for the next election.

mcleod.harris24
mcleod.harris24

@VijayBanga agree with the basis, however not plausible as inflation would occur ex: Great Depression minimum  wage increases led to inflation

C_Ryback
C_Ryback

Why doesn't the "perfesser" use HIS money and start a business and pay the rates he espouses?


Because it would be real work and the wages would BANKRUPT him in six months.


Duh.

C_Ryback
C_Ryback

@RB1 Why doesn't the "perfesser" use HIS money and start a business and pay the rates he espouses?


Because it would be real work and the wages would BANKRUPT him in six months.


Duh.

TallusRip
TallusRip

@RB1Historically, prices only raised by a nickle or dime after the min wage was increased.  If businesses raise their prices too high, no raise in min wage is going to get people to buy their products.  Business owners know better than to stiff their customers and shrug about how their hand was forced.  If the customers leave, their bottom line takes a hit.

RB1
RB1

I'm really surprised that the GOP isn't backing this idea. They know that the greedy business people will use it as a justification to gouge consumers with higher prices and thus a higher cost of living. The government will not want to acknowledge that fact that the increased wages are offset by higher living costs! The GOP can then cut any public assistance to the working poor because they now have a raised income standard. All the GOP has to do is hold the line on refusing to raise the line of poverty income. Poof!  A political win for the GOP and rich, yet another failure for the poor and growing poverty ranks!  

Don't get me wrong here, I would likely be viewed as a liberal by conservatives. The idea is nice but doesn't address the real problem of the disparity between those that have and those that don't.

JeanneMariePosthumus
JeanneMariePosthumus

@PamelaThompson @ZachB So, what about those individuals who want to make more money but cannot because they are stuck living in poverty? Raising the minimum wage is the right thing to do. Period. If you cannot afford to 10 per hour for your workers that you probably are not a kind person and have no empathy or understanding. The minimum wage has not increased in my state for 3 nearly 4 years now, although the cost of living has. So, where do you get off saying a person doesn't deserve a decent salary. Could you live off of $9,000 per year?

JeanneMariePosthumus
JeanneMariePosthumus

@TiggehMcLoud Why would people be out of work? If I am working somewhere for 7.25 per hour and the minimum wage was increased, how does that mean I would lose my job, or that another with the same skills would not be able to obtain that job? I don't understand your reasoning. Can you help me to understand?

JeanneMariePosthumus
JeanneMariePosthumus

@RB1 So, what would you suggest if not to raise the minimum wage that people need so desperately? 

NaveedXVO
NaveedXVO

@RB1 Except Republicans don't want to do that. Strange that this is what the Democrats want to do isn't it!?


The real problem is that poor stupid and uneducated people can't produce enough value to raise their own living standards. Yet, we continue to subsidize the oversupply of these people through generous though idiotic welfare benefits. This is the Malthusian trap. This is what we get.

JeffSchultz
JeffSchultz

@roknsteve People at service stations typically make more than minimum wage. I worked at a gas station doing service when I was in high school and started a few bucks over it. These people fall under "skilled labor" or at least semi-skilled. Even if you start at minimum if you have any ability at all you will make more money than that. If not, you should probably consider another line of work.


As far as robots/machines, they sure make it a lot quicker whether they replace people or just reduce the number of people needed.

PotvinPaul
PotvinPaul

@JohnDavidDeatherage @roknsteve @sillybilly You mean the self checkers that many places removed because customers hate them, or they allow unchecked theft?

JohnDavidDeatherage
JohnDavidDeatherage

@roknsteve @JohnDavidDeatherage @sillybilly Keep raising wages and somebody will develop ways to change tires or change the oil with fewer workers.  Higher wages create greater incentives for employers to replace workers with machines when possible.  Have you noticed the new self check out lanes at walmart? That is part of the trend you seem to be ignoring....   

DeweySayenoff
DeweySayenoff

@NaveedXVO@RB1A business that prices itself above what people are willing to pay goes out of business - as so many retailers learned this holiday season.  People aren't going to tolerate higher prices.  So businesses will have to accept smaller profits.

If you look at the records Wall Street is making, I don't think they have anything to worry about.  The fact is, businesses are flush with cash they won't use to hire more people because the demand to do so isn't there.  Demand is generated STRICTLY by spending.  People HAVE to have the money to spend in order to spend MORE, which increases demand.  As demand increases beyond the point that employers can dump it on their current employees, they HAVE TO HIRE MORE PEOPLE.  That generates NEW JOBS.  New jobs means more money available to spend, which drives MORE demand.

Businesses have been focusing on profits for so long sharing them with the wealthy (who comprise 99% of all investors) that they've forgotten they can actually make MORE MONEY if they have happy, well paid and sufficient employees.  The profits aren't as great, but the social benefits certainly are.  A business without a social conscious NEEDS to go out of business.

That means any business which pushes profits over people's willingness to pay WILL DIE OUT.  Most businesses would rather take a hit in profits than go out of business entirely and earn nothing.

So your little doomsday scenario won't happen, because most businesses would rather STAY IN BUSINESS and still earn a profit than not earn a profit.

What the hell, have you never taken an economics class in you LIFE?  

Oh, wait, no you haven't.  You're just another embracer of willful ignorance, letting those you think you agree with make up your mind for you.  Try expanding your mind instead of closing it for a change.  Or are you just simply a coward afraid that you might learn something new?

DeweySayenoff
DeweySayenoff

@TallusRip I love what you say, but the delusional live in a reality that doesn't accept the reality you described that the rest of us live in.  They cling to their willful ignorance, never bothering to check the facts and only ever believing what the acolytes of the conservative religion tells them.

It's sad, but it's the reality we have to cope with.  We both know that in the last couple of years, eleven percent more of our population have fallen into this kind of delusion reenforced by political intolerance and the acceptance that it's better to believe what you're told by people who don't have your best interests at heart than to explore what is really true and make up one's mind on one's own.

TallusRip
TallusRip

It would humble you to know that most people on welfare are elderly, children and the disabled...people who were on welfare before the recession.  Folks that were added were the skilled workers, like Dell employees, who were laid off in droves because the recession dropped their profits so bad that they couldn't keep everyone employed.  After that, businesses that once had skilled workers started getting used to making what few employees that remained to do the same work as the army they once had, and are unwilling to hire the old number of people.

So you have businesses that run a 100 man ship with only 50 people, refuse to hire another 50 for the sake of giving these people jobs again, and those 50 that are jilted are left getting part time employment at retail places like Target and Walmart.  Target and Walmart go out of their way to make sure employees never truly benefit from things like overtime or holiday pay (shafting hours the week before so they don't actually pay them extra even if their holiday hours are time and a half) and only give them 20-25 hours per week.  

And then these same folks have to listen to a bunch of uneducated, judgemental jackwads tell them to go back to school like that's such an easy option.  School tuition costs money, and even if you can put it off by taking a certain number of credits every semester...if you're in class, you're not working, and you're not bringing home a paycheck to feed yourself or your family.  So these folks are stuck working 2-3 jobs just to make ends meet, and thus have no time left to attend classes, or take online classes...certificates or degrees which may take 2 years to complete, when being worked on at a full time pace.  Part time, or one class at a time, can take 5-18 semesters.

Please wisen up.  Not everyone on welfare is eating caviar at home.  That would be the ultra rich, who are the biggest welfare queens in the country, getting literally half our tax money in subsidies instead of actually having a product worth buying that would make them the same amount of money.


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