A $15 minimum wage, the poverty rate, and the middle class.

If we believe the proponent's of Biden's policies, we reach unbelievable conclusions.

I read that Biden's policies will reduce child poverty by half. But let's look at a $15 minimum wage (Biden said no one who works 40 hours a week should be poor).

If you work 40 hours a week and make $15 an hour, your annual salary is $30,000 a year (assuming 2 weeks vacation without pay).

The poverty line was $26,370 for a family of four in 2019. This is before taxes are taken out. It includes cash transfers but not in-kind transfers. This is all according to the U. S. Census Bureau.

So not only will a single person not be in poverty, even a family with two parents (and only one working) and two kids will not be in poverty. It seems like this would make the poverty rate just about zero (it seems like child poverty would have to be zero then as well).

Now someone might say "not everyone will have a job so there will still be poverty." But people who advocate for higher minimum wage laws say we don't lose jobs because of it. And since we were below 4% unemployment before Covid, and, assuming we get there again, there would have to almost no poverty, except possibly for those still unemployed who maybe are not getting enough assistance.

So maybe we will have around a 4% poverty rate, if we believe those who support Biden's policies. And again, since unemployment applies only to adults, we have to assume zero child poverty (unless some of those in 3.5% unemployed group have kids but that won't be very many).

What about senior citizens, many of whom who don't work. Their poverty rate was 8.9% in 2019 while it was 10.5% overall. Not sure what share of the population seniors are but it has to be much less than half since the median age in the U. S. is around 38. So again, this implies we will have some very low overall poverty rates in the coming years.

This all sounds pretty far fetched. The proponents of the $15 minimum wage should be saying that poverty will be just about zero but I have not heard it.

And last year we had the lowest poverty rate ever recorded 10.5% while it fell 1.3 percentage points from the year before. That ties for the largest one year decrease in the last 50 years.

Yet that happened with a federal minimum wage of just $7.25 that has not gone up since 2010.

Also, just about anyone who gets married and whose spouse works will be middle class. Their household income will be $60,000 per year. Median household (HH) income in the U.S. in 2019 was $68,703. So every two worker household will be middle class. 

That will be about 87% of the median.  Sounds middle class to me. The proponents of $15 should be pretty much saying that everyone could be middle class if they just get married. Two 18-year olds who were high school sweethearts could get married when they graduate.

Then, of course, they will immediately find 40 hour a week jobs at $15 per hour. They will have to, remember, because higher minimum wages never reduce employment.

The range of incomes for the middle quintile is $53,504 to $86,488 for 2019. That would mean, again, all married couples would automatically be middle class.