As the arrival of robins signals spring’s start, so demands for a higher minimum wage herald the commencement of campaign season.

Maine’s lovable Democrats are all atwitter about it. From Senate candidate Shenna Bellows to gubernatorial candidate U.S. Rep. Mike Michaud to Portland Mayor Michael Brennan, “Give America a Raise” is the common refrain.

Liberal politicians know minimum-wage talk makes good politics. It shows how compassionate Democrats are while highlighting the callousness of conservatives. Unfortunately, as is often the case, this politically popular campaign message is not good policy. Not if our aim is to alleviate poverty.


According to the U.S. Department of Labor, only 2.8 percent of American workers (or 1.1 percent of the entire population) hold minimum-wage jobs. In Maine, 16 percent of adults live in poverty.

That disparity suggests raising the minimum wage will, at best, impact only a sliver of the poor population. That sliver shrinks smaller when you consider that not all minimum-wage workers are poor.


Many are in high school and college, working part-time while attending school. (According to the Department of Labor, half of all minimum-wage workers are younger than 25.) Other minimum-wage workers live in households with above-average incomes; their wages supplement the primary breadwinner’s.

The oft-invoked image of the minimum-wage earner as a middle-aged single mother is not representative of the whole. Again, it’s good politics for liberals to advertise this image, but it’s not reflective of reality.

Raising the minimum wage is an ineffective way to alleviate poverty because most poor people are not working in minimum-wage jobs – they’re not working at all. The unemployed poor benefit not at all from commanded increases in the price of labor. Indeed, to the extent the higher minimum wage discourages employers from hiring, the non-working poor actually suffer.


Which brings us to the biggest problem with raising the minimum wage: the law of unintended consequences. The most critical point here – an indisputable fact, really – is that we cannot predict how employers will react to mandated increases in the cost of labor. The best we can do is imagine possible reactions and hazard guesses as to which is most likely.

Proponents of increasing the minimum wage believe, perhaps sincerely, that business owners will react to increases in the cost of labor by settling for less profit. It’s ironic that the same progressives who regularly disparage the avarice of corporate America believe businesses will respond to minimum-wage hikes with big-hearted selflessness. Nevertheless, this unlikely scenario is the only one in which raising the minimum wage would benefit the tiny sliver of poor people it possibly could.


But even where such excess profits exist, the proposition remains dubious. For there are many other ways employers can and do react to minimum-wage increases. They can hire fewer employees or fire existing ones, they can cut employees’ hours, and they can modernize production processes to eliminate the need for human laborers.

The scholarly research on minimum wage’s impact – and there is a lot of it – is far from conclusive, but the preponderance of studies confirm the fundamental trade-off between raising wages and increasing employment. It’s not a difficult concept to grasp: If you make labor more expensive, employers purchase less of it. It’s Economics 101.

The nonpartisan Congressional Budget Office’s Feb. 18 analysis of President Obama’s minimum-wage proposal affirmed this fundamental trade-off. According to the CBO, raising the minimum wage to $10.10, as the president has proposed, would result in the loss of 500,000 to 1 million jobs.

Those forecasts are bolstered by a recent survey of 1,213 businesses by Express Employment Professionals, in which 38 percent of America’s private employers said they will lay off workers if Congress enacts Obama’s minimum-wage plan.


The best anti-poverty strategy is to grow the economy, for in a growing economy, job opportunities are plentiful and employers must compete for labor. This competition places upward pressure on wages. In the absence of economic growth, the opposite occurs: Workers compete for limited jobs, driving wages downward. Employers can pay minimum wages, and workers have few viable alternatives.

If liberals are sincere in their desire to improve the lives and livelihoods of the poor among us, then they ought to focus on strategies that encourage economic growth, rather than mere political slogans.

Steven E. Robinson, a Dexter native and graduate of Bowdoin College, is editor of TheMaineWire.Com and a policy analyst for The Maine Heritage Policy Center. He can be contacted at:

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