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The Minimum-Wage and Poverty

Here’s a letter of mine published in the August 7 edition of the Baltimore Sun:

The Sun should rethink its editorial “Rethinking minimum wage” (Aug. 4).

The editorial’s account of history is flawed; the federal minimum wage began in 1938, not in the 1950s.

More important, it’s untrue that the data  are “compelling” that “a minimum wage is helpful in the fight against poverty.”

Economists Joseph Sabia and Richard Burkhauser, in research published last year in the respected journal Contemporary Economic Policy, found that “minimum-wage increases (1988-2003) did not affect poverty rates overall, or among the working poor or among single mothers.”

This finding is consistent not only with the fact that just a tiny fraction of workers (less than 5 percent) are paid wages as low as the minimum wage and the fact that 80 percent of minimum-wage workers live in non-poor households but also with the findings of other rigorous studies.

Donald J. Boudreaux