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There’s an Easy Way to Lift Nearly 5 Million Out of Poverty, Says One Study

There’s an Easy Way to Lift Nearly 5 Million Out of Poverty, Says One Study

Written by Bryce Covert

Raising the federal minimum wage to $10.10 an hour could lift about 4.6 million people out of poverty directly, according to a new study from economist Arindrajit Dube. Longer-term effects could reduce the number of people living below the poverty line by 6.8 million.

That wage level “would reduce the poverty rate among Americans between the ages of 18 and 64 by as much as 1.7 percentage points,” Jillian Berman explains in the Huffington Post. Poverty increased by 3.4 percent during the recession, a rate that has not improved since, but a $10.10 wage would erase more than half of that uptick. Dube’s findings come from an analysis of 23 years of data on minimum wage increases as well as a review of previous findings.

Others have found similar numbers for how many could be brought above the federal poverty line by a higher wage: ROC United, a group focused on better working conditions for restaurant workers, found that a $10.10 wage would lift nearly 6 million people out of poverty.

The current federal minimum wage is $7.25 an hour, and it has stayed at that level for more than four years. That’s not enough to keep a parent who works for that wage full-time, year-round above the poverty line, nor is it enough to make market rent in any state. But the wage used to be enough to keep a family of two above the poverty line, and in the 1960s it was even enough to keep a family of three out of poverty.

A $10.10 wage makes sense in other ways. It would bring it in line with where it would be if it had kept up with inflation over the past half century. (To keep up with increases in all other workers’ wages, it would have to be $10.65, and to keep up with increases in worker productivity it would be $18.30.) Given that low-income workers are likely to spend a large portion of any extra pay, putting the money back into the economy, a $10.10 wage would boost GDP by $22.1 billion, supporting the creation of 85,000 new jobs. And Americans support such a wage: one poll found 80 percent support for it, including two-thirds of Republicans, and another found that two-thirds support a raise to $10.25 an hour.

This post was originally published in ThinkProgress

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Photo Credit: WisconsinJobsNow

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82 comments

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11:55PM PST on Jan 18, 2014

from the quick reading I have done about IKEA James...this company pays no taxes, is registered in Amsterdam (I don't know why) and has stores all around the world. So call IKEA and ask them why American workers get paid less.
I work at a retail store and I get paid more than the minimum wage....what is your point James?
Some Scandinavian countries use their natural resources (i.e. oil) to benefit their citizens, and they also tax the hell out of them too.
so raising the minimum wage to $10.10 is gonna make diddly squat to me......and is not gonna help any of my fellow employees either.

11:45PM PST on Jan 18, 2014

I do not believe your studies findings.

4:59PM PST on Jan 7, 2014

Minimum in Canada is in the 9~12 range but then a 1-bedroom apartment in a large-ish city costs $850+ and food is 25% more expensive.

3:34PM PST on Jan 7, 2014

The prices go up anyway Ronald LOLOLOL Dont try to lay that at the feet of the poor.

7:50AM PST on Jan 7, 2014

http://freebeacon.com/the-new-school-review/

3:27AM PST on Jan 7, 2014

Thank you for sharing

11:14PM PST on Jan 6, 2014

Raise the minimum wage !
Thanks for the post.

11:02PM PST on Jan 6, 2014

Raising the minimum raise still leaves our economic fate in the hands of those who only care about their finances.

James Brown made a song in the sixties "I don't want nobody to give me nothing. Open up the door, I'll get it myself." We have waited five years now for decent jobs... how long are we going to wait before we figure out that they are not coming? Political parties do not matter. Eventually the 1% purchases their souls. Americans must take our country back. We need to start businesses in our own neighborhoods, employ our neighbors and pay them a living wage, shop in our own neighborhoods, invest in our own neighborhood businesses and we need to start today...

"we have talents we can use
on our side of town.
Let get our heads together
and build it up from the ground."

Although I made well above the minimum wage, I was still a slave working 7 days a week, 15 hours a day. Today's employers have no soul. They are un-thankful and disloyal.Now I work for myself, employ my children in my neighborhood and I have never been happier.

"I'm not gonna tell you what to do
I'm not gonna raise a fuss
But before you make another move
Let's start by taking care of us."

9:57PM PST on Jan 6, 2014

Oh, for that wonderful word counter we used to have...


Sometimes I am ashamed of my country. I am angered by those who would have us be their Economic Slaves, who would have children go hungry, who don't even see much less care about sometimes homeless people who give the sweat from their backs without fair compensation to ensure that a few Psychopaths can have Everything!

Unfettered Capitalism is Evil. It is as clear as that. The United States has never been as it was represented. Until the 1970's we seemed to be on the right track, but then it all began to go terribly wrong when Reagan was put in charge.

Vote Progressive! Hell, vote Socialist! An, if you can find one, join a Union. Can't find one, then Start a Union. Don't like the way Unions are sometimes run, then keep it in the hands of you and your fellow members and see that it is run right.

9:56PM PST on Jan 6, 2014

Why must our representatives always think in half-way solutions? If $10.10 addresses one-half the 3$% increase in those who have fallen into poverty in the mentioned time-frame, why not push for $15.00? $15.00 per hour would lift so many more Working Americans out of poverty than $10.10.

As a side note, if you have ever been to an IKEA in this country the workers you encounter are working for between $7.25 and hour and not too much more. In IKEA's home nation the workers doing the same jobs in its stores make $19.00 per hour. IKEA has not gone out business in Europe. It is thriving while paying its' employees a minimum of $19.00 per hour.

What would $19.00 per hour do for the Working Poor in our country? The Greatest country on earth, the Richest country on the planet, and we still have to have Economic Slavery? Yes, if one works and yet cannot make even the most basics ends meet, one is an Economic Slave.

Sometimes I am ashamed of my country. I am angered by those who would have us be their Economic Slaves, who would have children go hungry, who don't even see much less care about sometimes homeless people who give the sweat from their backs without fair compensation to ensure that a few Psychopaths can have Everything!

Unfettered Capitalism is Evil. It is as clear as that. The United States has never been as it was represented. Until the 1970's we seemed to be on the right track, but then it all began to go terribly wrong when Reagan was put in charg

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