Raising the minimum wage to $15.00 in Seattle

A debate in the New York Times today discusses the merits of Seattle raising the minimum wage to $15.00 gradually over several years. The essence is that some commenters are all for it, others questioning and pretty much no one sure of the ultimate impact.

However, one comment from Robert Reich, former Secretary of Labor, caught my eye. Here is what he said:

With a higher minimum wage, moreover, we’d all end up paying less for Medicaid, food stamps and other assistance the working poor now need in order to have a minimally decent standard of living.

There is no reason to question that statement; it seems quite reasonable. But if that is the case, doesn’t the loss of those benefits offset a substantial part of the gain those individuals receive from a higher wage, especially considering the wages are at the very least subject to payroll taxes?

Don’t get me wrong, earning your way is better than collecting welfare benefits, but does this tradeoff lift families out of poverty as is being claimed for an increase in the minimum wage?

One comment

  1. The current hourly minimum wage in Washington State is $9.32. The increase to $15.00 is a 61% increase. The effect of this increase will be the further pricing out of the official labor force those who are the least educated and least skilled. Economist Walter Williams of George Mason University has published extensively on the detrimental effect of high minimum wages on minority youth.

    In a nutshell, the height of the lowest rung on the ladder has been increased even more. The arms reaching for that rung have not been lengthened.

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