Professors Argue That Obama Minimum Wage Hike May Cost Jobs Without Helping Poor
November 19, 2008
As part of his strategy for reducing poverty and helping working families, President-Elect Barack Obama proposes to increase the federal minimum wage to $9.50 per hour by 2011, with automatic increases indexed to inflation thereafter. In a September 2008 study published by the Employment Policy Institute, Joseph Sabia, a public policy professor at American University, and Richard Burkhauser, a professor of policy analysis at Cornell University, argue that such an increase could cause the loss of anywhere from 450,000 to 4 million jobs. Further, the authors conclude that most of the benefit from a minimum wage increase would go to households whose income is already twice the federal poverty level. The authors argue that the new administration should instead pursue more cost-effective anti-poverty programs, such as expanding the Earned Income Tax Credit.
http://www.epionline.org/study_detail.cfm?sid=114