Journal of Labor Research

, Volume 23, Issue 1, pp 41–49 | Cite as

The minimum wage and poverty among full-time workers

  • Richard Vedder
  • Lowell Gallaway
Symposium: The minimum wage: Some new evidence


V. Conclusions The empirical evidence is strong that minimum wages have had little or no effect on poverty in the U.S. Indeed, the evidence is stronger that minimum wages occasionally increase poverty. It also suggests that the minimum wage does not even lower poverty for the one group that, almost by definition, one would expect to be helped: full-time, year-round workers. While the empirical results suggest minimum wages do not achieve what is ostensibly their primary goal — relieving poverty among the working poor — minimum wages do seem to impose a real cost on society in terms of lost income and output. The empirical evidence on work hours suggests that a $1 increase in the minimum wage, far from being almost costless, could conceivably impose income losses to American workers in the $12-15 billion range per year — an amount equal to the “income deficit” of millions of persons counted as poor by the U.S. Bureau of the Census.


Minimum Wage Poverty Rate Minimum Wage Increase High Minimum Wage Lost Income 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Barrington Linda. “Does a Rising Tide Lift All Boats? America’s Full-Time Working Poor Reap Limited Gains in the New Economy.” Research Report 1271-00-RR. New York: Conference Board, 2000.Google Scholar
  2. Brown, Charles, Curtis Gilroy, and Andrew Kohen. “The Effect of the Minimum Wage on Employment and Unemployment.” Journal of Economic Literature 20 (June 1982): 487–528.Google Scholar
  3. Card, David and Alan B. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton: Princeton University Press, 1995.Google Scholar
  4. Deere, Donald, Kevin M. Murphy, and Finis Welch. “Employment and the 1990–1991 Minimum Wage Hike.” American Economic Review 85 (May 1995): 232–37.Google Scholar
  5. Economic Report of the President 2000. Washington, D.C.: Government Printing Office, 2000.Google Scholar
  6. Feldstein, Martin. “The Economics of the New Unemployment.” Public Interest 33 (Fall 1973): 3–42.Google Scholar
  7. Hashimoto, Masanori. “Minimum Wage Effects of Training on the Job.” American Economic Review 72 (December 1982): 1070–87.Google Scholar
  8. Neumark, David. “The Employment Effects of Recent Minimum Wage Increases: Evidence from a Pre-specified Research Design.” Cambridge, Mass.: National Bureau of Economic Research Working Paper W7171, June 1999.Google Scholar
  9. —, Mark Schweitzer, and William Wascher. “Order from Chaos? The Effects of Early Market Experiences on Adult Labor Market Outcomes.” Industrial and Labor Relations Review 51 (January 1998): 299–322.CrossRefGoogle Scholar
  10. —. “Do Minimum Wages Fight Poverty?” Cambridge, Mass.: National Bureau of Economic Research Working Paper W6127, August 1997.Google Scholar
  11. — “Minimum Wages and Training Revisited.” Cambridge, Mass.: National Bureau of Economic Research Working Paper W6651, July 1998.Google Scholar
  12. — “A Cross-National Analysis of the Effects of Minimum Wages on Youth Employment.” Cambridge, Mass.: National Bureau of Economic Research Working Paper No. W7171, June 1999.Google Scholar
  13. —. “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment.” American Economic Review 90 (December 2000): 1362–96.CrossRefGoogle Scholar
  14. Patterson, James T. America’s Struggle Against Poverty, 1900–1994. Cambridge, Mass.: Harvard University Press, 1994.Google Scholar
  15. Rosen, Sherwin. “Learning and Experience in the Labor Market.” Journal of Human Resources 7 (Summer 1972): 326–42.CrossRefGoogle Scholar
  16. U.S. Bureau of the Census. Current Population Reports, P60-210. Poverty in the United States: 1999. Washington, D.C.: U.S. Government Printing Office, 2000.Google Scholar
  17. Vedder, Richard and Lowell Gallaway. Poverty, Income Distribution, the Family and Public Policy. Study, Joint Economic Committee of Congress. Washington, D.C.: U.S. Government Printing Office, 1986.Google Scholar
  18. —. “Does the Minimum Wage Reduce Poverty?” Study, Washington, D.C.: Employment Policies Institute, 2001.Google Scholar
  19. Welch, Finis. “The Rising Impact of Minimum Wages.” Regulation 2 (November/December 1978): 28–37.Google Scholar

Copyright information

© Springer 2002

Authors and Affiliations

  • Richard Vedder
    • 1
  • Lowell Gallaway
    • 1
  1. 1.Ohio UniversityAthens

Personalised recommendations