Center for American Progress

Raising the Minimum Wage to $10.10 Would Cut Taxpayer Costs in Every State

Raising the Minimum Wage to $10.10 Would Cut Taxpayer Costs in Every State

An analysis of SNAP data reveals the savings that each state would experience if the federal minimum wage increases to $10.10 per hour.

See also: The Effects of Minimum Wages on SNAP Enrollments and Expenditures by Rachel West and Michael Reich

The federal minimum wage has not been raised for five years. Its real value today—$7.25 per hour—is less than two-thirds of what it was in 1968. Such a low minimum wage means that many full-time workers live in poverty. They must rely on public assistance programs—such as the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps—to keep their families from going hungry each month.

Increasing the minimum wage—as some states have already done—would not only provide a much-needed raise for low-wage workers but also decrease the amount that taxpayers spend on programs such as SNAP. Examining how states’ minimum wage laws have affected their SNAP enrollments and spending over the past two decades sheds light on the effects a similar minimum wage policy could have at the national level.

The map below shows estimates of the reduction in SNAP enrollment and expenditures that would result from raising the federal minimum wage to $10.10 per hour. Analyzing SNAP data from 2012 along with current minimum wages reveals the savings that each state would experience. By requiring businesses to pay fairer wages, American taxpayers could save approximately $4.6 billion per year, or $46 billion over 10 years, in SNAP costs.

Rachel West is a master of public policy candidate at the Goldman School of Public Policy, University of California at Berkeley. Michael Reich is professor of economics and director of the Institute for Research on Labor and Employment at the University of California at Berkeley. 

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Rachel West

Director of Poverty Research