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Raising The Minimum Wage Has Benefits Way Beyond Creating More Wealth For Workers

From protecting children to stopping teen pregnancy, raising the wage has benefits beyond increased salaries.

Raising The Minimum Wage Has Benefits Way Beyond Creating More Wealth For Workers
“We hope policymakers better understand the impact minimum wages can have for children.” [Illustration: royyimzy/iStock]

Congress hasn’t raised the federal minimum wage in a decade. It remains stuck at a miserly $7.25. Since 2007, it’s been up to states and cities to up minimums on their own–something that 29 states have now done.

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Washington D.C. has the current highest mandated wage ($12.50 an hour) with California and New York both outlining plans to take their wages to $15 an hour over time. By contrast, five states in the South have no local minimums, meaning $7.25 is the law of the land.

[Illustration: royyimzy/iStock]
“A lot of jurisdictions are more liberal than the United States’ Congress has been in recent years,” Gary Burtless, a senior economic fellow at the Brookings Institute told NPR. “They feel, as wage levels in general have risen and the cost of living has increased, that the lowest paid workers in their states or their jurisdictions deserve pay raises. Also, when voters are given the choice of lifting the local minimum wage, they frequently do so.”

The debate over minimum wages normally pits Democrats, who argue higher incomes are a matter of fairness, against Republicans, who argue that higher wages harm employment (there’s conflicting evidence on that). The GOP says cities and states should have jurisdiction over the increases, so they match local economic conditions (the Republican governor of Missouri just lowered the minimum wage in St. Louis). But it has generally resisted all increases in recent years, no matter where they’ve been proposed.

Every $1 increase in minimum wages results in 9,700–or almost 10%–fewer cases annually.[Illustration: royyimzy/iStock]
To researchers Lindsey Bullinger and Kerri Raissian, this debate fails to acknowledge the wider importance of minimum wages in raising social standards–for example, the effect in reducing or contributing to violence in the home. In a new paper, they look at the relationship between states that have passed minimum wage increases and 30 years of official figures for child maltreatment. They find that every $1 increase in minimum wages results in 9,700–or almost 10%–fewer cases annually. Minimum wage levels affect household ability to buy clothing, food, and medical care, the researchers argue, affecting whether a child is likely to be mistreated. 

“The debate surrounding minimum wages typically focuses on its effects on the employment and poverty, leaving the conversation somewhat controversial. We provide a perspective that is not quite so divisive,” says Bullinger, a Ph.D. candidate at Indiana University Bloomington, in an interview. “We hope policymakers better understand the impact minimum wages can have for children and that strengthening economic supports to families can benefit child well-being in ways that are unexplored.”

A $1 increase would result in 5,000 fewer births annually by teenage mothers. [Illustration: royyimzy/iStock]
It’s clear that states with higher rates of minimum wages tend to have lower rates of child mistreatment. For example, in 2015, California had 41.6 referrals of child abuse or neglect per 1,000 children compared to Indiana’s rate of 111.9. The former had a minimum wage of $9, while Indiana–which passed a law stopping local government from passes wage increases–has the federal minimum of $7.25.

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Bullinger and Raissian, an associate professor at the University of Connecticut, are well aware that child mistreatment could be caused by thousands of factors, and that wages may be only part of the picture. But they make strenuous effort to discount these noisy factors, including taking account of state-to-state differences in food stamp benefits, Earned Income Tax Credits, and unemployment levels. They also compare states with themselves (how their mistreatment levels have changed over time) as well differences between states.

Bullinger previously looked at minimum wage levels and the impact on teenage pregnancy. She found that a $1 increase would result in 5,000 fewer births annually by teenage mothers, with substantial benefits in health and public savings (teen pregnancy prevention has huge payoffs). It’s really not surprising that minimum wages are debated so vigorously. They affect an awful lot of people, both negatively and positively.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.

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