Photo: Getty Images/AFP/Saul Loeb
Raising the Minimum Wage Is Not the Simple Solution Some Democrats Claim It Is
Economics

Raising the Minimum Wage Is Not the Simple Solution Some Democrats Claim It Is

By Photo: Getty Images/AFP/Saul Loeb

You often hear Democrats say that if you work full-time, you shouldn’t fall below the federal poverty line. It’s a line that resonates well with the public. President Barack Obama used a version of it in his 2013 State of the Union. On Tuesday, at The Atlantic’s Economy Summit, Chris Van Hollen, the ranking member on the House Budget Committee, was the latest Democrat to make the argument. “It’s just wrong that in our country, you can work full-time and still be below the federal poverty line,” Van Hollen said. “If you work full-time40 hours a weekyou should not fall below the federal poverty line.”

In one sense, Van Hollen is right. A single mother working full-time at a minimum wage job would end up with an income that's below the federal poverty line. But if you're the only person in your household, that income would be above the federal poverty line. That's because poverty isn't just a function of income. It's also a function of the number of people in your household, since more people means more mouths to feed and so on. According to the Bureau of Labor Statistics, the poverty line for a two-person household is $15,510, while for a three-person household it's $19,530. Here is how each poverty line compares with the current minimum wage and the Democrats' proposal to raise it to $10.10:

Minimum Wage vs. Federal Poverty Line
Bureau of Labor Statistics

The implications here are more complicated than they might first appear. Imagine that Republicans agreed to a $10.10 minimum wage, as Democrats have proposed. A single parent with three kids working a full-time, minimum wage job would still not make enough for household income to rise above the poverty line. Or, to put it another way, some full-time, minimum wage workers are above the poverty line even without a minimum wage increasewhile some would remain below it even with one. That story is much more complicatedand less powerfulthan the one Democrats like Van Hollen are telling.

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