Raising wages won’t solve income inequality, but will help poor Americans

Two of the nation’s largest states – California and New York – are exploring proposals to raise the minimum wage to $15 an hour. Kim Weeden, director of the Center for the Study of Inequality at Cornell University, says while raising the minimum wage will unlikely decrease the levels of income inequality, it would make a huge difference for those struggling to make ends meet.

Bio: http://www.soc.cornell.edu/people/faculty/weeden/

Weeden says:
“In inflation-adjusted terms, the real value of the minimum wage is lower today than it was at its late-1960s peak. This decline in the real value of the minimum wage, coupled with the decline in unionization and the rise of automation, accounted for much of the growth in income inequality in the 1980s. In the last 25 years, however, most of the extraordinary growth in income inequality has occurred at the top of the wage distribution, as the incomes of the top one percent and especially the top 0.1 percent pulled away from everyone else’s.

“Because of this, raising the minimum wage isn’t likely to return us to the comparatively low levels of income equality we saw in the 1970s, when productivity gains and median wages moved in parallel.

“However, raising the minimum wage would make a huge difference in the lives of the millions of Americans who work in minimum wages jobs and still can’t make ends meet. The stereotype of a teenager in a part-time or summer minimum wage job belies the reality of who works minimum wage jobs in America. Less than 15 percent of minimum wage workers are teenagers, more than half work full time, and about a quarter have children of their own.”

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