UR Simon School Dean Says Higher Minimum Wage Is Not Answer To Poverty

Feb 27, 2013


Credit www.oregonrla.org

  As state lawmakers return to Albany this week, a proposed hike in the minimum wage is among the agenda items receiving consideration.  Governor Cuomo is calling for a 21 percent increase in the minimum wage from the current $7.25 per hour to $8.75.


Mark Zupan, Dean of the University of Rochester's Simon School of Business, said the proposal, while attractive-sounding as a remedy to poverty, is not a real solution at all.  Zupan said most families are not poor because of low wages, but because they are unemployed.  He says eight out of ten minimum wage earners are teenagers from families with two working parents who often have incomes in the upper part of the income distribution scale.

Zupan said a minimum wage increase would translate to a smaller paycheck for those who earn it. He said the higher income would be subject to more payroll taxes and reduced eligibility for welfare programs. Zupan said minimum wage earners would also likely see a reduction in work hours as their employers try to balance the additional costs of doing business.