According to a new report released on Wednesday by the Center for American Progress, if Congress increases the federal minimum wage to $10.10 per hour and ties it to inflation, it could reduce federal spending on food stamp benefits, commonly known as SNAP, by $46 billion over the next 10 years.
The CAP report, authored by Rachel West and Michael Reich, introduced a few more data points to the familiar debate on Capitol Hill over the proposed minimum wage increase. Bills in the House and Senate would raise the minimum wage from $7.25 to $10.10 per hour by 2015 and tie it to an inflation index so that it will rise with the cost of living. The proposal would also increase the tipped minimum wage for servers and bartenders. Since 1991, the tipped minimum wage has been $2.13 per hour, and the new proposal will increase the hourly wage to 70 percent of the regular minimum wage.
In addition to the CAP report, Progressives are eager to show why a minimum wage hike should be supported by the current Republican opposition. The same lawmakers have consistently called for more cuts to SNAP benefits, claiming they don’t want to bend to the will of entitlement.
However, researchers at the University of California, Berkeley found that by putting more income in the pockets of low-wage workers, the higher minimum wage would cut back their need for public assistance by about $4.6 billion annually. That is equal to roughly 6 percent of current spending on food stamps, or about a tenth of 1 percent of the federal budget.
On a call with reporters hosted by CAP, Sen. Sherrod Brown (D-Ohio) said, “Detractors of SNAP and the minimum wage increase can’t have it both ways. While they decry a “culture of dependency.” He went on, “these same elected officials oppose efforts to make sure hard work is rewarded with fair pay.”
A recent report from the Congressional Budget Office found that the proposed minimum wage increase would raise the country’s collective wages by $31 billion, but also potentially reduce employment by 500,000 jobs. Naturally, conservatives latched on to on the last figure claiming the proposal is a job killer.
The Employment Policies Institute quickly pushed back on the CAP report, saying the findings do not address other federal expenses that could come with a reduction in employment. The group’s research director, Michael Saltsman, said, “It’s both embarrassing and disingenuous for an organization such as CAP to say a higher minimum wage would ‘cut taxpayer costs’ — knowing full well that those reductions in spending will be offset by other increases in spending, according to the CBO.”
The report comes just a few days after clothing retailer GAP announced an increase in their minimum wage. The bill is expected to go to the Senate in April, but Democrats still have a lot of work to do. They are currently trying to force it onto the floor through discharge petition.
h/t Huffington Post