A $10 minimum wage could be a poverty killer

A restaurant worker group says boosting the federally mandated pay would significantly lift living standards for millions.

By Aimee Picchi Jun 21, 2013 1:26PM

Image: Care © Moxie Productions/Blend Images/Getty ImagesWhat would happen if the congressional push for a $10.10 minimum wage became federal law? 


More than half the country's working poor -- 6 million adults -- would be lifted out of poverty, according to a new study from the advocacy group Restaurant Opportunities Centers United. The U.S. had 10.4 million individuals in 2011 whom the Bureau of Labor Statistics considered as the working poor, meaning they worked for at least 27 weeks but still fell below the official poverty level. 


A $10.10 minimum wage would disproportionately help women and people of color, who tend to hold lower-paying jobs than white people and men, the study found. 


About 54% of women who now earn the federal minimum wage of $7.25 would be lifted out of poverty, compared with 46% of men. For women in the restaurant industry, the higher baseline wage would lift 60% out of poverty. 


While the calls for a higher minimum wage are growing louder, it's also controversial with some employers. The National Restaurant Association, for one, is lobbying against a hike, arguing that it would place a tough burden on restaurant owners. The association's members include large chains such as Darden Restaurants (DRI), which owns Red Lobster and Olive Garden, and Burger King (BKW) and McDonald's (MCD).


For workers earning the minimum wage, their $7.25 per hour actually buys far less than the baseline wage provided in previous decades. 


If workers today earned the same hourly minimum wage as in 1968, that would be $10.58 per hour, adjusted for inflation, the Nation notes. That's $3.33 more than workers currently are guaranteed by law today.


Follow Aimee Picchi on Twitter at @aimeepicchi. 


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215Comments
Jun 21, 2013 1:48PM
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It would be wonderful, if actually accurate.  The sad truth is, that no one would be "lifted out of poverty" because increasing  the minimum wage by over 50% would have a ripple effect throughout the entire economy and start a cost push inflation spiral that would only drag even more people below the poverty line.  It is just that the poverty line would be much higher than before in the new inflated dollars.
Jun 21, 2013 1:51PM
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Everything is realitive.    $10 today will just mean poverty level tomorrow as prices rise to cover the cost.  
Jun 21, 2013 2:08PM
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And we can be like Greece with 25% unemployment for youth.
Jun 21, 2013 1:45PM
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This is assuming employers don't terminate underperformers in order to pay the higher mandated wages for remaining employees.
Jun 21, 2013 1:52PM
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I guess logic is officially gone in the USA.  If you LIFT the POOR, what will they do without a food stamp charge card, free phone and medical coverage?  More like the poverty line will increase and the cost of these GREAT increase will be passed on to the middle class.  Thanks, you ignorant dumborats.
Jun 21, 2013 3:18PM
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Why not make it $100/hour? Wouldn't that ensure no more poverty anywhere? Then we could make it $1,000/hour followed by $10,000/hour and everyone would be rich. If we could just get to $1,000,000,000 an hour everyone could chip in some petty cash and solve the countries debt problem.

 

You liberals couldn't think your way out of a paper sack, could you. Hint: where is the $10/hour coming from? What has happened every time in the past when we raised the minimum wage?

Jun 21, 2013 1:54PM
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LOL "a restaurant worker" said this.  Does this nitwit not realize the prices of EVERYTHING would skyrocket if something like this was to ever occur?  I just can't at how stupid democrats are.
Jun 21, 2013 2:43PM
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The minimum wage was increased in 2007, 2008, and 2009, yet poverty today is worse now than before those increases. How is yet another increase in the minimum, and thus an increase in the number of unemployed people a good thing?

Jun 21, 2013 2:36PM
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If a person isn’t getting paid $10.00 an hour it’s because their labor isn’t worth $10.00 an hour to their employer. If the government raised the minimum wage those people will not get $10.00 an hour, they’ll get fired.

Jun 21, 2013 2:01PM
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Economics and history has proven that when you raise the minimum wage companies raise their costs to offset that minimum wage increase. And in most cases lets say minimum wage increases 2% prices increase 3% which actually makes things worse. 
Jun 21, 2013 1:47PM
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As an employer, if an employee is not worth $10/hr now, my solution would always be to terminate them upon an increase in the minimum wage.   If I feel someone is worth 8.75 an hour and someone else says $10, then I will lay them off and let someone else hire them.

That is what every employer should do.   If someone mandates a pay higher than what you are paying, lay them off and let someone else pay them.

So I am OK with the increase, just understand anyone not earning that much now will be laid off....
Jun 21, 2013 4:04PM
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Here is a thought. You want to make more than minimum wage. You want to make more than $7 something an hour. Get a skill or a job that justifies it. Don't rely on the government to mandate your worth.
Jun 21, 2013 2:12PM
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Is this article serious? Dumbest idea I've ever heard. There goes the cost of living through the roof!
Jun 21, 2013 3:15PM
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Malarkey!

 

 Mark Twain said it best, :It's not what you make that counts, it's what you can do with it".

 

Raise the cost to produce goods and services and the price of those goods and services will rise.

 

It's time to start voting for free enterprise, free markets and freedom from big brother.

Jun 21, 2013 2:03PM
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The state of Michigan raised its Minimum wage above the Federal minimum wage and companies that were considering bringing jobs to Michigan passed for southern states because they had minimum wage workers and that was extra money they would be forced to pay and cut into profits. 
Jun 21, 2013 4:05PM
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The ONLY things that will lift ANYONE out of poverty are 1. Working harder, 2. Working longer,
3. Improving your skills, 4. changing careers to one with higher potential, or 5. ALL the above!
Oh yes, I forgot, #6  Winning the lottery!
Jun 21, 2013 2:21PM
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Let's just bring back slavery instead, anyone currently on welfare, foodstamps or section 8 gets auctioned off.  Poverty problem eliminated, national debt reduced.

 

They clearly aren't capable of feeding, clothing and providing shelter for themselves, and this will never change. Let their new master provide it instead of their old master government.

Jun 21, 2013 3:12PM
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Do this and Inflation will promptly gobble up their windfall up and make everything else even more expensive.  When I was a kid, minimum wage was 3.15 and they used the same argument then.  Wont work.  Lets just make the minimum wage $1 Million Dollars per year. 
Jun 21, 2013 3:15PM
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More than half of the poor would be lifted out of poverty IF (big if) they got a job at the new minimum wage.  

All of the poor would be lifted out of poverty if they got a job at $46 an hour.  If just raising minimum wages by law actually caused all the working poor to retain or get jobs at those rates, then it's unconscionable to keep rates as low as $10.10 an hour, rather than at $46 an hour.

Nobody keeps statistics on jobs never created and never offered to anyone.  So, it's virtually impossible to know how many are hurt by raising minimum wage laws.

Really, what this says is that if poor people get an increase in wages, they tend to get lifted out of poverty.  Hopefully, no one spent a lot of money to arrive at that conclusion.
Jun 21, 2013 2:59PM
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Several bloggers have mentioned that raising the minimum wage is inflationary.

 

A more immediate consequence to higher minimum wage rate is the LOSS OF LOW PAYING JOBS.  Any employer other than one with political connection is suffering the high cost of doing business.  Fewer low-paid employees shall be retained and fewer new ones hired when their wages are driven up by government mandate while the workers produce no more than they did at the lower wage rate.

 

HIGHER UNEMPLOYMENT is thus an even more acute consequence of higher minimum wage than having grocery prices go up.

 

The cure to the poor worker's problem is to have MILD DEFLATION.  Lower prices shift purchasing power towards ordinary people, away from the super-rich.  [This could be why Fed Chief Ben Bernanke is so hell-bent on preventing deflation.  All of the bad effects he cites about deflation hurt the big dogs, but for the little guy, lower overall cost of doing business is a boon.] 

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