Ending Hunger in America, 2014 Hunger Report Full Report | Page 87

CHAPTER 2
The argument most often used against raising the minimum wage is that it would lead
employers to lay off workers or cut back on their hours. The effect on employment outcomes
of raising the minimum wage has been widely studied; in fact, it is one of the most studied
subjects in economics. There is little evidence that moderate raises lead to higher unemployment or reduced work schedules. Jared Bernstein of the Center on Budget and Policy Priorities explains that raising the minimum wage “won’t transform the labor market or rebuild
the middle class, but it is a vital if
small part of the connective tissue
Figure 2.9 Low-Wage Workers, by Education, 1979 and 2011
that used to bind even our lowest
wage workers to the more broadly
100%
5.7
shared prosperity that has eluded
9.9
College+
105
them for decades.”
19.5
The minimum wage and the
80
EITC are tools policymakers
33.3
can use to fix some of the broken
Some college
places in the economy for low-wage
60
35.4
workers. “What combination of
these two policies should we use
to achieve the goal of guaranteeing
High School
40
37.0
workers and their families a decent
living standard?” ask Jeannette
Wicks-Lim and Jeffrey Thompson,
20
39.5
economists at the University of
Less Than
Massachusetts, in a study approHigh School
19.8
priately titled Combining Minimum
0
Wage and Earned Income Tax Credit
1979
2011
Policies to Guarantee a Decent Living
Standard to All U.S. Workers.106 The
Source: John Schmitt and Janelle Jones (2012), “Low-wage Workers Are Older and Better
Educated than Ever,” Center for Economic and Policy Research.
key variable they identify is the
minimum wage tipping point—that
is, the largest minimum wage hike that the U.S. economy would be able to absorb without
producing significant layoffs or reductions in workers’ hours.107 They conclude, “A 70 percent minimum wage hike falls below the tipping point.” 108

A Higher Road to Better-Paying Jobs
The U.S. government permits private sector firms to pay workers poverty-level wages in
the federal contracting process. This can be changed rather simply by requiring companies
that compete for government contracts to adopt a “high-road” approach to compensating
their lowest-paid workers.
In 2012, the federal government paid private sector firms $517 billion to provide it with
goods and services.109 Just a few examples of the workers paid poverty-level wages under
government contracts: janitors and food service workers in government buildings, truckers
who haul food served in school cafeterias around the nation, and sewing machine operators
who produce uniforms worn by members of the armed forces.
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