VIDEO: Minimum Wage Increase Worsens Income Inequality

Date: June 24, 2014

While the Obama administration claims increasing the minimum wage will stimulate the economy, help the poor and address income inequality, NFIB economist Bill Dunkelberg says the president is wrong on all counts.

Dunkelberg points out that every extra dollar a minimum wage worker gets comes out of somebody else's pocket who can't spend it. As business owners raise prices to cover the increase, it's a wash as far as economic stimulus is concerned. 

Rather than helping the poor, Dunkelberg says a 39% increase in the minimum wage will have the opposite effect because the resulting job losses will make it harder for the poor to find work.

"The Congressional Budget Office estimated that most of the increase in wages will go to families with incomes well above the poverty level, not to poor families," Dunkelberg says.

Finally, Dunkelberg says the administration's policies have actually made income inequality worse. With stock prices rising, higher income individuals have profited while employment is still over 1 million jobs lower than it was in 2008.

"The best way to help the poor and the middle class is by promoting economic growth, not by making it harder for people to get a job with higher taxes and burdensome regulations," Dunkelberg says.

For more on the effects of minimum wage increases, visit

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