Here’s another entry for my growing pile of public policies that cost more money than they purport to save. (Of course, the more illuminating question is: who bears the costs and who gets the savings. The answer to that question explains a lot.)
According to the Economic Policy Institute,
“.. if the minimum wage were boosted from its current level of $7.25 per hour to $10.10, as proposed by the Fair Minimum Wage Act of 2014, more than 1.7 million Americans would no longer have to rely on public assistance programs. This would produce $7.6 billion per year or more in savings for the federal government, according to the study.”
The report noted that approximately half of all people earning under $10.10 per hour–or some 11.9 million Americans–receive some form of means-tested benefits from the government. That would include benefits like the Earned Income Tax Credit, food stamps and other forms of welfare.
We the People pay for those benefits. Walmart, McDonalds and other major low-wage employers don’t. The money companies save by paying their employees poverty wages goes directly to their bottom lines. The arguments for continuing to have taxpayers subsidize the (very handsome) profits of such employers is that, if the minimum wage were to be raised, these companies would choose to raise prices rather than (horrors!) see any erosion of those huge profit margins.
I don’t know about the rest of you, but I’d prefer paying an extra nickel for a cheeseburger, and putting that 7.6 billion dollars per year toward something that advanced the common good. I’d rather repair our crumbling infrastructure, educate our children, develop a vaccine for Ebola…there are lots of priorities I’d place ahead of subsidizing the continued wealth of the Walton family and McDonald’s shareholders.