America’s Poor Need a Job, Not a “Raise”

Will raising the minimum wage to $15 an hour dramatically reduce poverty rates?

Setting aside the policy’s negative impact on jobs, a dramatic minimum wage hike faces a far more fundamental problem: A majority of Americans in poverty don’t work and can’t benefit from a “raise.”

The Employment Policies Institute used data from the 2013-2015 March supplements to the Current Population Survey to study the working age population living in poverty in each state and found a surprising result: In 41 of the fifty states plus Washington D.C., more than 50 percent of the working-age population living in poverty are not employed.

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Instead of raising the minimum wage in a misguided attempt to alleviate poverty, legislators should consider an anti-poverty measure with a proven track record, such as the Earned Income Tax credit. The EITC boosts wages without reducing job opportunities, and also creates an incentive for those not currently working to seek it.

Experts agree. A survey conducted by the University of New Hampshire found that the majority of surveyed economists(71%) believe that the Earned Income Tax Credit (EITC) is a very efficient way to address the income needs of poor families. (Only five percent believe the same thing about a $15 minimum wage.)