However, recipients with the best employment prospects have already found jobs. Unfortunately, many of those on welfare are effectively illiterate. According to the National Adult Literacy Survey, nearly half of welfare recipients have trouble performing basic arithmetic, reading and writing tasks. The Educational Testing Service says one of three has only ''minimal skills,'' essentially the level of high school dropouts. Yet, just 10 percent of new jobs are open to people with so little expertise.
Companies do help train welfare recipients.
However, firms can't afford to do as much when the minimum wage rises. Especially when they can choose other workers with better skills. Peter Brandon of the Institute for Research on Poverty has found that minimum-wage hikes draw new workers, particularly teens and students, into the labor force, who in turn displace those on welfare. As a result, welfare recipients in states that hiked their minimum wages remained on welfare 44 percent longer than those in states that did not increase their minimums. The minimum wage most reduces employment prospects in low-growth communities.