“In the year 2023, in the richest country in the history of the world, nobody should be forced to work for starvation wages… If you work 40, 50 hours a week, you should not be living in poverty. It is time to raise the minimum wage to a living wage.”Bernie Sanders, May 4, 2023
This is Sen. Sanders’ argument for raising the minimum wage from its current level of $7.25 an hour to $17.00. But the whole premise is wrong. Virtually no one today is earning the minimum wage. Even if they did, they wouldn’t be poor. And that’s been true for some time.
In 2018, Goodman Institute Senior Fellow Peter Ferrara showed that it is impossible to work 40 hours at the current minimum wage and still be poor – regardless of how many children you are supporting. That’s because of two Republican tax measures: the Earned Income Tax Credit and the Child Tax Credit.
Writing at Forbes a year ago, John Goodman noted that fast-food workers were earning an average pay nationwide of $17.20 – without any assist from government.
The forces of supply and demand seem to work just as well for the labor market as they do in the markets for other goods and services.