PunditFact checks Steve Forbes' claim that two-thirds of people who earn minimum wage get a raise within a year

4:30 PM, Feb 17, 2014   |    comments
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St. Petersburg, Florida - It was a State of the Union promise to raise the minimum wage for federal contractors to $10.10. President Barack Obama doesn't have the power to do the same though, for all workers. This is keeping the minimum wage debate going. 

We team up with PunditFact to check the facts on whether an increase would be good for the bottom line.

On CNN's State of the Union, chairman and editor-in-chief of Forbes Media, Steve Forbes, was on to talk about whether raising the minimum wage would be a good or bad thing, economically. Here's what he said:

"Two-thirds of the people who start out in minimum wage are above the minimum wage within a year when they get the skills."

For this fact-check, PunditFact found research that looked at people who made minimum wage from 1979 to 2012. Researchers found 20% of those people drop out of the labor market within the first year, leaving 80% who still have a job after a year.

"Of that remaining group, two-thirds -- the number he's citing -- actually get a raise within a year. The problem is once you eliminate those first 20 percent, you're actually looking at a much smaller, about half," says Aaron Sharockman, editor at PunditFact.

He says Forbes is misinterpreting the numbers. He points out though, that Forbes may be making the suggestion they get skills or additional training to get that raise.

"We talked to some experts who say it may be as simple as they've been in the job for a year, that shows they're attending a job, they're going to the job, so the employer wants to keep them rather than start all over with someone." 

Because Forbes' claim is partially accurate, PunditFact rates it HALF TRUE.

Why these employees get a raise is still unclear. The studies used for the fact-check really don't go in to that, but what PunditFact was able to find was if you stay in a minimum wage job for a year, one in two get a raise, not two in three.

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