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Fact-Check: No, People Who Work Full-Time Generally Don’t Live in Poverty

minimum wage reuters
Reuters

During the third presidential debate, Hillary Clinton talked about raising the minimum wage because “people who work full time should not live in poverty.”

Fact-Check: MOSTLY FALSE

Certainly most would agree that full-time workers should not experience poverty, but the question is whether they do now, and whether raising the minimum wage would effectively address the problem.

“The majority of the people who live below the poverty level do not work,” noted the Center for Poverty Research at the University of California Davis, reviewing labor from the Bureau of Labor Statistics. One of the observations made in their report was that a large majority of working poor had “experienced at least one labor market problem” during the year – i.e. they were unemployed, or forced to work part-time.

Certainly some people who work full-time meet the definition of poverty – a definition that is politically elastic, since it is often calculated in a way that excludes the considerable value of state and federal subsidy programs. The poverty rate among working adults has been estimated at around 23 percent. A great deal depends on other factors, such as the age of the individual, whether they are raising a family, and where they live.

The question of whether raising the minimum wage reduces poverty is highly contested – there have been studies both for, and against, that conclusion. Even advocates concede that jobs are lost when minimum wages rise, and those losses tend to hit the very people who most need full-time work to pull themselves up from poverty. Critics of minimum wage increases point out that even those who keep their jobs are often forced to pay more for their essential needs, precisely because labor costs have increased – described as a “regressive hidden tax” – and those higher costs tend to hit poor families harder than affluent ones.

The situation simply is not as simple as “raise the minimum wage, and people will make more money.” Complex unintended consequences must be considered, and minimum wage increases should be measured against other, potentially more efficient and less costly, means of alleviating poverty.

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