Even if you are a low income American, raising the minimum wage would still ultimately hurt you. Yes, a $3 an hour raise would increase your earned income by roughly 30%, but you would suffer from an implicit high marginal tax estimated at 50%. This tax is a result of losing certain benefits including food stamps and low-income tax credits once your earnings increase.
There must be better ways to improve the living standards of low income Americans than by this inequitable transfer of income from the unemployed poor to the working poor. Fortunately, The CBO and conservative leaders likePresident of the American Enterprise Institute (AEI), Arthur Brooks, have proposed a better way- increasing the earned income tax credit. Increasing the federal earned income tax credit would supply low income Americans with the money they need to provide for themselves, along with incentives to work and climb the economic ladder.
At a time when the youth unemployment rate, aged 16-24,stands at over 16%, now is not the time to raise the minimum wage, which would cost young Americans 500,000 more jobs.When looking at youth unemployment rates for African Americans, the numbers are even worse: over 38% of young African Americans are currently unemployed.
If the President is serious about helping the least among us, raising the minimum wage is not the answer. A hike in the minimum wage hurts the very people it claims to help.
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