MINIMUM WAGES, POVERTY AND WELFARE

Labor markets for unskilled and low-wage workers in the United States stagnated in the last quarter of the 20th century. The collapse in the low-wage labor market has been well documented¹ and numerous research initiatives have investigated the causes. Despite some geographical mismatches between buyers and sellers low-paying jobs are generally available but forces are at work on both the demand and supply sides of unskilled labor markets that make it increasingly difficult for working families at or near the bottom of the income distribution to earn enough to meet basic needs. Welfare reform effectively increased the supply of unskilled workers, which placed added pressures on wages and earnings of low-income families.