Would A Higher Minimum Wage Increase Inequality?

rThe increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO’s estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold.

Greg Mankiw.

Comments (11)

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  1. Gorden says:

    Mankiw maybe right. But we probably need more data. Yet I can anticipate inequality will be increasing.

  2. Emory says:

    So why do the Democrats try to increase the minimum wage?

  3. Erik says:

    The key to a strong economy is cash flow. money going from hand to hand to hand. Minimum wage increases create cash flow as do tax increases. Which in turn creates a stronger economy. Since the GOP will not allow any tax increase a raised minimum wage creates the same effect.

  4. Matthew says:

    “…those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families.”

    Exactly. Many of low wage earners are high school and college students, trying to earn money to get them through college.

    • Thomas says:

      Few people who make minimum wage are from low income families. While there are many people in that situation, a minimum wage hike will not reduce income inequality in the U.S.

    • Emory says:

      Apparently, the government fails to tell us who earns the minimum wage, college students, illegal immigrants, or others? We can anticipate that illegal immigrants would be a major part of them.