Raising the minimum wage is not enough

By Thomas Weisner

After years of debate, Congress recently raised the federal minimum wage from the current $5.15 an hour to $7.25 over the next two years. This is the first time in 10 years that the wage has been boosted, and it is an important step.

But a bump in the federal minimum wage is not enough to make a lasting difference among many poor families, because minimum-wage jobs are often temporary and, even when they last, usually come without benefits. In any case, only one in five minimum-wage workers lives in families with poverty-level income. A higher minimum wage alone cannot address the multiple problems that working-poor families face with child care, health and other issues.

Work supports are a proven way to provide real help to poor families, while also increasing the chances that their children can do better in the future. This was shown in a demonstration project in Milwaukee recently. The project, called "New Hope," was premised on the idea that if people work full-time with support, they can avoid poverty. The program's success suggests that it could provide a model for national anti-poverty policies and California communities.

New Hope offered a wage supplement that brought low-income families from whatever wage they were employed at above the poverty line. It also subsidized child care and health care and provided intensive and respectful case management that held them to work-related goals.

The program was started by a group of activists, business leaders and employers who wanted to support work as an effective way to reduce poverty. Careful evaluation showed that poverty rates of the families in the program declined by as much as 14% compared to a control group. Even two years after the program ended and no more work supports were being provided, New Hope participants were working more and earning better than those who had not benefited from such a program.

Employment rates among program participants rose 6% to 10% over the three years of the program. Those not working when the program started earned $2,400 more than their control group counterparts, and $5,800 over five years. The children in these families also did better than their counterparts. Boys, particularly, performed better on developmental tests, did better in school and acted out less.

Further, the program increased rates of marriage among single mothers who had never married previously: 21% of this group in the program were married two years after it ended, compared to 12% of the control group. The reason wasn't marriage courses or moral exhortation but the fact that they were earning more money and had more job stability and hope.

New Hope was not a welfare program. It provided important work supports only in return for certified work effort, and it focused on supporting low-income working families. With the right set of supports for work and income, the lives of children living in poverty can be improved rather than be put at risk when their parents work.

Weisner, a professor of anthropology, is the co-author of "Higher Ground: New Hope for the Working Poor and their Children" and co-editor of "Making it Work: Low-wage Employment, Family Life and Child Development."