Gene Nichol’s April 30 Point of View “HB2 wage provision steps on necks of low-wage workers” condemned the General Assembly for holding down the minimum wage. This provision, he claimed, will hurt the poor and exacerbate income inequality.
While I agree that equality is a noble goal and abhor House Bill 2 for its attack on LGBTQ rights, I must object to the minimum wage as a solution to inequality. Far from being a “significant remedy to address poverty,” the minimum wage increases unemployment, with particularly negative effects for those who are young, uneducated and/or nonwhite.
Those who keep their jobs do enjoy pay raises, but as the economist David Neumark has shown, many of these workers are not poor. Rather, they are the children or spouses of high earners and would enjoy high living standards regardless of their wages.
The minimum wage thus harms people at the bottom of the social ladder while enriching those near the top, hardly a recipe for equality.
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Instead of raising the minimum wage, we should increase the earned income tax credit and other measures proven to reduce poverty.
Helping the poor is a noble goal, but it’s only possible if we pursue policies that work.