Will a Higher Minimum Wage Help the Poor?

Source: Paul Godfrey, Stanford Social Innovation Review blog, June 30, 2014

Raising the minimum wage appears to help the poor, but these policies fail to create the conditions that help people move from poverty to prosperity. … But a close reading of the minimum wage debate allows us to dispel myths on both sides of the aisle. Perhaps more importantly, it allows us to see how the minimum wage fits into the larger challenge of moving people from poverty to prosperity. The conservative concerns don’t survive even cursory scrutiny. … Nevertheless, the victory shouts we hear from the left ring hollow as well. … The most glaring myth, however—one that obscures the underlying reality of moving people out of poverty—is the belief that creating higher-paying, low-skilled jobs is a viable escape route. The sobering reality of the 21st-century economy is that high wages aren’t what move people out of poverty, high skills do. Simply put, it takes more than money to move people from poverty to prosperity. In and of itself, raising the minimum wage does nothing to create opportunities for people to gain the skills they need to move into the middle class….