‘Each $1 increase in the minimum wage has…increased poverty rates and the receipt of public assistance…’
(Kaylee McGhee, Liberty Headlines) Anti-poverty initiatives, like higher minimum wage laws and heftier welfare programs, have actually hurt poor and disadvantaged communities, according to a new studyby the Employment Policies Institute.
University of California, Irvine economists David Neumark and Brittany Bass, and Brian Asquith of the National Bureau of Economic Research, studied the long-term effects of these programs in struggling neighborhoods, looking at how minimum wage and welfare policies have impacted poverty rates over the past three decades.
They found that rather than improving impoverished communities — as they are designed to do — these policies have hurt poor areas.
“Neither a higher minimum wage nor more-generous welfare benefits have reduced poverty rates in the country’s most-disadvantaged neighborhoods. In fact, the authors find some evidence that poverty rates and the share of residents on public assistance have increased alongside a rising minimum wage,” the study reads.
The researchers said they found that the most common long-term outcome of higher welfare benefits was increased poverty and a higher number of people receiving public assistance.
“To put this in practical terms, it means that each $1 increase in the minimum wage has, in disadvantaged neighborhoods over the past three decades, increased poverty rates and the receipt of public assistance by roughly three percent,” the researchers wrote.
This study raises important questions about the effectiveness of the poverty-reduction programs leftist politicos tout.
“These findings cast serious doubt on whether the normal poverty-reduction policies — minimum wages and welfare programs — actually contribute to increased employment, reduced poverty, and higher household earnings,” the EPI wrote. “Indeed, this study should give pause to any level of government interested continuing or expanding such policies.”