Only 3.8% of benefits from the $7.25 minimum wage hike would go to poor single mothers

Wage hike would also put low-skilled adults out of work
  • Publication Date: July 2006

  • Topics: Minimum Wage

Washington, DC – Only 3.8% of the benefits from the House’s proposed minimum wage hike to $7.25 an hour would go to poor single mothers, and only 3.7% of the benefits would go to poor African American families, according to a recent EPI-commissioned study from economists at Cornell and the University of Georgia.

Research conducted by Drs. Richard Burkhauser of Cornell University, and Joseph Sabia of the University of Georgia, revealed that over 87% of the benefits from a $7.25 minimum wage will to families that aren’t poor and that the average family income of who will benefit is over $45,500 a year.

“The House is proposing to raise the minimum wage in an effort to help struggling single moms, but the truth is that poor single moms would only see a meager amount of the benefits,” said Mike Flynn, EPI’s director of legislative affairs. “Considering that minimum wage hikes have historically destroyed entry-level jobs and put low-skilled adults out of work, a minimum wage hike would do more than just ignore those in need—it could destroy their jobs.”

Instead of raising the minimum wage, Drs. Burkhauser and Sabia recommend the Earned Income Tax Credit [EITC] as a far more effective way to assist hard-working single moms.

“Policymakers should focus on expansions in the EITC rather than increases in the minimum wage to ensure that those who work hard and play by the rules do not live in poverty,” said Burkhauser and Sabia in their study. “Most poor and near-poor households—especially single mothers—would benefit from the EITC, while only a minority would gain from a minimum wage hike.”

For a copy of the study, “Raising the Minimum Wage: Another Empty Promise to the Poor” go to http://www.EPIonline.org/study/r87/