Why minimum wage increases are a poor way to help the working poor

Richard V. Burkhauser

Minimum wage increases are not a very effective mechanism for reducing poverty. They are not related to decreases in poverty rates. They can cost some low-income workers their jobs. And most minimum wage earners who gain from a higher minimum wage do not live in poor (or near-poor) families. A better tool for reducing poverty, and at lower cost, is the earned income tax credit. It is a much more targeted way to provide income to workers in poor families. It raises the wages of only workers in low-income families and rises with the number of dependent children in a family.

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Year of publication:	2014
Authors:	Burkhauser, Richard V.
Publisher:	Bonn : IZA
Subject:	minimum wage \| earned income tax credit \| working poor \| Mindestlohn \| Minimum wage \| Armut \| Poverty \| Niedriglohn \| Low wages \| Einkommensteuer \| Income tax \| Steuervergünstigung \| Tax incentive \| Wirkungsanalyse \| Impact assessment \| Armutsbekämpfung \| Poverty reduction \| Niedrigeinkommen \| Low income \| Lohnsubvention \| Wage subsidy \| Arbeitsangebot \| Labour supply