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
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
“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 NFIB.com/MinWage.
Watch more Your Bottom Line videos: nfib.com/ybl