Debunking the Myths About Raising the Minimum Wage

Democrats want to raise the minimum wage to $7.25 per hour, benefiting millions of American workers and their families. For the ninth year in a row, Washington Republicans are blocking this effort even while they pursue a raise in their own salaries. While those opposed to giving Americans their well-deserved raise spread myths about what a minimum wage hike would mean, Democrats want everyone to know the truth: an increase in the minimum wage will help, not harm, Americans.

MYTH #1: Raising the minimum wage will not decrease poverty because minimum wage earners are not sole breadwinners.

Wrong. Nearly 15 million workers, 11 percent of the US workforce, would directly or indirectly benefit from a raise in the minimum wage to $7.25 per hour. More than a third of the adults that will receive a raise are their families' sole breadwinner. [Children's Defense Fund, "Increasing the Minimum Wage: An Issue of Children's Well-Being," 4/7/05]

Nearly 37 million people live below the poverty-line, including 13 million children. Among full-time, year-round workers, poverty has doubled since the late 1970s -- from roughly 1.3 million then to more than 2.6 million today. [U.S. Census Bureau, 12/14/05] An unacceptably low minimum wage is a key part of the problem. A full time minimum wage earner takes home just $10,700 -- which is at least $6,000 below the poverty line for a family of three. [U.S. Dept. of Health and Human Services, 1/24/06]


MYTH #2: Most minimum wage earners are teenagers or part-time workers.

Wrong. Nearly 80 percent of those who would benefit from a raise in the minimum wage are adults, not teenagers. 54 percent are full-time workers, and 30 percent work between 20 and 34 hours per week. [EPI, Minimum Wage Issue Guide, 01/06]


MYTH #3: Minimum wage earners are entry level or new workers.

Wrong. It is increasingly difficult for minimum wage earners to move out of low-wage jobs. A recent report from the Center for Economic Policy and Research shows that more than one-third of adult minimum wage earners will still be earning the minimum wage three years later. [WorkingUSA: The Journal of Labor and Society, "No Way Out: How Prime-Age Workers Get Trapped in Minimum-Wage Jobs," 12/05.]


MYTH #4: Raising the minimum wage is bad for the economy and will lead to higher unemployment.

Wrong. Raising the minimum wage has no negative impact on jobs, employment or inflation. In the four years after the last minimum wage increase passed, the economy experienced its strongest growth in decades, as more than 11 million new jobs were added (at a pace of 232,000 per month) and inflation was stable. The low-wage labor market also saw improvements through lower unemployment rates, increased average hourly wages, increased family income, and decreased poverty rates. Further, studies of state-level minimum wage increases show that the increases did not produce unemployment or slow jobs. [EPI, Minimum Wage Issue Guide, 01/06]


MYTH #5: Raising the minimum wage will hurt small businesses.

Wrong, again. A recent Gallup Poll revealed that 86 percent of small business owners do not believe that an increase in the minimum wage would hurt their business. Three out of four maintained that a 10 percent increase would have no affect on them, and nearly half of small business people polled thought that the minimum wage should be increased. [Gallup Poll, "Minimum Wage Has No Impact on Small Business," 5/9/2006] New economic models observe that employers absorb the costs of wage increases with higher productivity, lower turn-over costs, decreased absenteeism and increased worker morale. [EPI, Minimum Wage Issue Guide, 01/06]