New Research Showing Wage Hikes Trigger Job Loss Among Welfare Mothers

Research from Dr. Peter Brandon from Brown University shows that higher minimum wage rates do not move mothers off of welfare rolls and onto payrolls. Mothers receiving welfare have a tougher time becoming self-sufficient if they experience a minimum wage hike while they are receiving welfare.

Brandon looks at data from the Survey of Income and Program Participation panels and finds that single mothers who live through minimum wage hikes while receiving welfare are significantly less likely to exit TANF/AFDC programs compared to other mothers on welfare who don’t’ have to experience such a change. These disadvantaged mothers experience 10 more months on welfare when lawmakers try to “help” them by passing a minimum wage hike.

This research shows that wage hikes do not seem to work with the new generation of welfare reform rules and policies and they fail to “make work pay” for welfare-dependent mothers because such hikes lower the demand for low-skilled labor.

Press Releases / Op-Eds

7/2/08 Dude: Where's My Summer Job
This year, it’s harder than ever for teens to find a summer job. One of the prime reasons for this drastic employment drought is the mandated wage hikes that policymakers have forced down the throats of local businesses.
Click here to read op-ed

6/13/08 A plan to batter Rhode Island's Economy
Forcing businesses to pay more for employees every year is going to have the same effect as forcing them to pay more for anything else: They’ll find alternatives (higher-skill workers, automation, outsourcing), spend less (firings, reduced hours), or move their business someplace else.
Click here to read op-ed

To view all press releases/op-eds click here.

Studies

7/08, Examining Effects of Minimum Wages on Single Mothers’ Exits from Welfare
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1/08, Good Intentions Are Not Enough: Why Raising New York’s Minimum Wage Continues to be a Poor Way to Help the Working Poor
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9/07, Helping Low-wage Americans: The Earned Income Tax Credit
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For a full list of all Minimum Wage studies click here.