New Report: Minimum wage hike would cut food stamp costs by $4.6 billion a year
Raising the minimum wage to $10.10 an hour would cut food stamp spending by $4.6 billion a year, according to a new report from the Center for American Progress:
According to the finding in this report a 10 percent increase in the minimum wage reduces SNAP enrollment by between 2.4 percent and 3.2 percent and reduces program expenditures by an estimated 1.9 percent. Taking into account each state’s 2014 minimum wage level, we apply these results to the legislative proposal put forward by Sen. Tom Harkin (D-IA) and Rep. George Miller (D-CA) to raise the federal minimum wage to $10.10 per hour. Our results imply that the effects of the Harkin-Miller proposal on wage increases would reduce SNAP enrollments by between 6.5 percent and 9.2 percent (3.3 million to 3.8 million persons). The total anticipated annual decrease in program expenditures is nearly $4.6 billion, or about 6 percent of current SNAP program expenditures.
Harkin-Miller proposes to index minimum wage levels in subsequent years to the consumer price index, or CPI. The minimum wage would then increase at the same rate as SNAP benefit and eligibility levels, which are also indexed to the CPI. Consequently, the savings over 10 years in 2014 dollars would be 10 times the one-year savings, for a total of approximately $46 billion.