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Minimum Wage Effects

If the federal government raised the minimum wage from $7.25 per hour to $15, how much would this increase the average income of families below the poverty line?

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According to data from the Congressional Budget Office, the Census Bureau, and the Department of Commerce's Bureau of Economic Analysis, raising the federal minimum wage from $7.25 per hour to $15 would increase the average income of families below the poverty line by about 1%. This figure is negligible because: (1) less than 27% of adults in poverty work at least part-time for at least half the year; (2) doubling the minimum wage would destroy about 1.4 million jobs with a disparate impact on young, less-educated people; (3) doubling the minimum wage would cause a slight decline in the overall economy, increased inflation, and higher taxes; and (4) the average income of families in poverty is several times greater than commonly reported because the official statistics exclude a vast array of goods and services that poor people receive from governments and charities.

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