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Myths About the Minimum Wage

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Raising the minimum wage is a proven way to stimulate the economy
Fact: Empirical research has found no link between a higher minimum wage and economic growth. In fact, a higher minimum wage reduces output in certain industries with a higher concentration of less-skilled employees.

Most recent studies find that raising the minimum wage does not reduce employment
Fact: A summary of the last two decades of research from economists at the University of California-Irvine and the Federal Reserve Board found that 85 percent of the most credible studies on the minimum wage point to job loss for less-skilled employees.

Minimum wage employees are stuck at that wage and need a legislated increase to earn a raise
Fact: Research shows that the vast majority of employees who start at the minimum wage earn a raise in their first one to 12 months on the job.

Raising the minimum wage will reduce poverty
Fact: Twenty-eight states raised their minimum wage between 2003 and 2007, in an attempt to reduce poverty rates. Yet research from economists at Cornell and American University found no associated reduction in poverty.

Most minimum wage earners are living in poverty
Fact: Census Bureau data show that the average family income of a beneficiary from the last federal minimum wage increase was over $47,000 a year. Research shows that many of those earning the minimum wage are young people or secondary earners in non-poor families.

Most minimum wage earners are single and supporting children
Fact: Census data show that only about 16 percent of those who benefitted from the last federal minimum wage increase were single earners supporting children; by contrast, nearly 40 percent were teens or others living at home with a parent or relative.

A study of an earlier New Jersey minimum wage increase proves that a higher minimum wage creates jobs
Fact: The New Jersey study by David Card and Alan Krueger was discovered to be based on a heavily flawed dataset. A re-analysis using more accurate payroll data found that a higher minimum wage in New Jersey did indeed reduce employment.

Adult minimum wage earners with children are surviving on the minimum wage alone
Fact: In 94 percent of families with an adult who works a job that pays at or below the minimum, the spouse works as well. In 8 out of 10 of the families with children present, the minimum wage accounts for less than 20 percent of the household’s total income. For families with children, the minimum wage is also supplemented by a very generous Earned Income Tax Credit.

Malcolm C. Lunn
United Small Business of America
Phone 877-791-7705
Fax 630-475-3844

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United Small Business
Proclaiming Liberty to America's Small Business
P O Box 3132 St. Charles, IL 60174 - unitedsmallbus1@comcast.net
Phone 877-791-7705 Fax 630-475-3844


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