There’s been much talk lately around raising the minimum wage to $15 an hour. It seems to me there is a very simple, fairly obvious reason why raising the minimum wage to $15 will absolutely not help the working poor as it is designed to do. That reason is competition.
Well-meaning folks who advocate for the $15 minimum wage imagine a transfer of wealth from the greedy corporations to the working poor, but what will actually happen is a transfer of wealth to the middle class. Many of the working poor will become the unemployed poor as higher caliber candidates grow ever more willing to take over their current jobs.
Compound this by the fact that many employers will predictably respond to a significant minimum wage increase by cutting workforce. Also a factor, low-income workers will lose supplemental means-tested federal benefits if their income increases, leading to a net gain of zero.
So, what is the solution? Acquiring job skills that command more rewards in the marketplace is the only reliable way to put distance between yourself and poverty. Any solution to lift workers out of poverty that does not include an education component cannot succeed.