Tuesday, May 8, 2012

Minimum wage study discovers downside

By on September 20, 2007

The minimum wage handicaps its recipients according to a study published by University professor Joseph Sabia on the impact of a minimum wage increase on single mothers.

The two-year study was funded and released through the Employment Policies Institute, a nonprofit organization based out of Washington, D.C. and focuses on public policy issues involving growth in employment, according to their Web site.

Jill Jenkins, the chief economist at the Employment Policies Institute, said the study focused on mothers between the ages of 16 and 55.

According to the EPI Web site, Professor Sabia “uses data from a pooled cross-section of unmarried mothers from the March 1990 to March 2005 Current Population Survey.”

Sabia said in an e-mail, “My research shows that the one-two punch of firings plus cuts in hours actually reduces wage income for many less-educated single mothers. Thus, in the name of giving the poor a helping hand, minimum wage increases actually do them harm.”

Jenkins said raising the minimum wage causes companies to reevaluate employees. If fired, those without a high school education are less likely to find a new job.

She said people who have no problem getting raises on their own are the ones who will benefit from a minimum wage increase.

Sabia found “for every 10 percent increase in the minimum wage, the average single mother without a high school diploma sees her income decline by almost nine percent,” according to a news release.

Eighty-seven percent of the benefits from recent federal wage increase goes to families that aren’t poor.

The census conducted in 2000 for Athens-Clarke County found it has 3,128 households with children under 18, a female householder and no husband present – 7.9 percent.

Jenkins said the study should impact how people vote on minimum wage increases if people pay attention to what the data says.

“I have presented results from this study to the U.S. Senate Finance Committee and the Indiana House and Senate labor committees. The response from policy makers has been one of surprise and interest. I have done my best to let the nation’s minimum wage advocates know that crafting public policy isn’t like giving Christmas gifts. It’s not the thought that counts. Especially when feel-good legislation designed to help the working poor has been repeatedly shown to do precisely the opposite,” Sabia said.

A complete copy of the study can be found at www.epionline.org.

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