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Anorak | Why Raising The Minimum Wage Isn’t A Great Way To Help The Poor

Why Raising The Minimum Wage Isn’t A Great Way To Help The Poor

by | 29th, January 2014

In accordance with ancient custom after the Good Friday service at St. Bartholomew The Great Smithfield, 21 poor widows of the Parish were invited to pick up sixpences from an old flat tombstone. They also afterwards received a hot cross bun each from an alms dish. Some of the 21 poor widows picking up the sixpences from the flat tombstone outside St. Bartholomew The Great in London, on April 7, 1939. (AP Photo) Date: 07/04/1939

 

 

WE’RE being told, endlessly, that we must raise the minimum wage in order to increase the incomes of the working poor. It’s an outrage that people cannot support themselves in the style we think they all ought to be simply by the sweat of their brow. Thus the minimum wage must be raised to a truly living wage to make the world a better place.

However, here’s why that’s not actually all that great an idea :

Across the bulk of the income distribution, a 10% rise in the NMW leads to an increase in net family income amongst NMW families of around 3%; this is around 4% for families where the NMW is the main source of earnings, and around 2% for families where the NMW is the secondary source of earnings.

Very little of a rise in the minimum wage actually gets to the working poor. This is because

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Posted: 29th, January 2014 | In: Money, News, Politicians Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink