How Much Does Minimum Wage Help the Poor?

I've long been baffled by the argument that low-wage employers are "welfare queens" because their employees are on public assistance. As Jason Brennan of Bleeding Heart Libertarians wrote a few months back, if people have a human right to be paid more than their market wage, that's an obligation that falls on all of us, not just on their employers. And as Andrew Biggs has pointed out, it doesn't make sense to say that the government's decision to give money to poor people turns their employers into aid recipients.

The argument does highlight something important, however -- though I suspect it does so completely unintentionally. Poor folks who see their wages hiked don't actually get a lot of the money. The government cuts their benefits to compensate.

 

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