Journal of Political Economy Vol. 123 No. 2 2015
How Effective Is the Minimum Wage at Supporting the Poor?
Abstract
This study investigates the antipoverty efficacy of minimum wage policies. Proponents of these policies contend that employment impacts are negligible and suggest that consumers pay for higher labor costs through imperceptible increases in goods prices. Adopting this empirical scenario, the analysis demonstrates that an increase in the national minimum wage produces a value-added tax effect on consumer prices that is more regressive than a typical state sales tax and allocates benefits as higher earnings nearly evenly across the income distribution. These income-transfer outcomes sharply contradict portraying an increase in the minimum wage as an antipoverty initiative.
- DOI
- 10.1086/679626
- Volume
- 123
- Issue
- 2
- Pages
- 497-545
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref