How the low minimum wage helps rich companies
The country’s very low minimum wage comes at a high cost. And for taxpayers, it adds up to more than $100 billion a year.
That number comes from a new analysis of safety-net usage by Ken Jacobs, Ian Eve Perry, and Jenifer MacGillvary of UC Berkeley’s Labor Center. It identifies working families with at least one member who would get a raise if the federal minimum wage were lifted to $15 an hour, and finds that the government spends about $107 billion a year on Medicaid, the Children’s Health Insurance Program (CHIP), cash welfare, food stamps, and the earned-income tax credit for those families.
Raising the minimum wage would not just help them escape poverty. It would also help the government’s bottom line, by freeing up resources to spend on other anti-poverty priorities, such as child care, housing subsidies, and homelessness-prevention initiatives.
