Friday, September 23, 2022

Exploring the Effects of a $15 an Hour Federal Minimum Wage on Poverty, Earnings, and Net Family Resources

The Urban Institute

Using the Analysis of Transfers, Taxes, and Income Security (ATTIS) model to project the effects of raising the federal minimum wage to $15 an hour, we find that if no workers are displaced from their jobs, average earnings for families with affected workers would rise by $5,600 and their average net resources after taxes, transfers, and work expenses would rise by $4,200. The overall poverty rate as measured by the Supplemental Poverty Measure (SPM) would fall by 2.4 percentage points, with 7.6 million people being lifted out of poverty. We also present a range of estimates allowing for differing levels of job displacement. Using an estimate of potential minimum wage–related job displacement that falls toward the middle of the research literature, we find that about 3.2 million workers could lose work for at least part of the year, but average earnings and net resources would increase by $5,000 and $3,700, respectively, and SPM poverty would fall by 2.1 percentage points with 6.9 million people being lifted out of poverty.

Download the report here