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Misleading: Minimum Wage and Poverty Line

Tracy Davenport Tracy Davenport
15th February 2021
Misleading: Minimum Wage and Poverty Line
A single person making minimum wage is not living below the poverty line (Getty Images).

The Claim

A minimum wage increase to $15/hour gets people above the poverty line.

Emerging story

On February 5, 2021, President Joe Biden made the claim in an interview that if you’re making less than $15 an hour, and working 40 hours a week, “you’re living below the poverty wage.” Social media users then responded both agreeing and disagreeing to whether or not this was true or would benefit workers. 

Misbar’s Analysis

Misbar has discovered that the poverty line referred to by Biden is based on a set of poverty guidelines set by the U.S. Department of Health and Human Services. These guidelines vary slightly for those living in Alaska and Hawaii. 

According to the guidelines, a single person making less than $12,880 a year would be considered living below the poverty line in the U.S. The current federal minimum wage is $7.25 an hour. Therefore, for someone making the current minimum wage and working 50 weeks of the year, he or she would make $14,500 a year, which is already above the poverty line. That person making $7.25 an hour would only be below the poverty line if they were a part of a family of two or more. 

In the same CBS interview, President Biden went on to say, “But I do think that we should have a minimum wage, stand by itself, $15 an hour and work your way up to the — it doesn't have to be boom. And all the economics show, if you do that, the whole economy rises. I am prepared, as president of the United States on a separate negotiation on minimum wage, to work my way up from what it is now, which is — look, no one should work 40 hours a week and live below the poverty wage. And if you're makin' less than $15 an hour, you're living below the poverty wage."

There are arguments on both sides of raising the minimum wage. Families, especially those with two or more members, would be brought above the poverty level. Some also estimate that if the minimum wage was increased to $15 an hour as proposed, government expenditures on major public assistance programs for families would fall by billions of dollars each year according to the Economic Policy Institute. However, others fear that increasing the minimum wage would cut jobs and prevent the U.S. from rebounding from the pandemic. 

Misbar’s Classification


Misbar’s Sources

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