Center for American Progress

RELEASE: $46 Billion in SNAP Savings Projected as a Result of Minimum-Wage Increase, According to New CAP Report
Press Release

RELEASE: $46 Billion in SNAP Savings Projected as a Result of Minimum-Wage Increase, According to New CAP Report

Read the report.

Washington, D.C. — A report released today by the Center for American Progress verifies that boosting the wages of low-wage workers through raising the minimum wage will lower government expenditures on nutrition assistance and reduce participation in the Supplemental Nutrition Assistance Program, or SNAP. Liberals and conservatives alike have long expected that raising the minimum wage for low-income workers would reduce government spending on certain safety net programs. Today’s report is the first serious analysis to offer evidence that this claim is absolutely true.

The groundbreaking research, commissioned by CAP and authored by economist Michael Reich and Rachel West of the University of California, Berkeley, finds that raising the minimum wage to $10.10 per hour would lower government spending on SNAP by $46 billion over the next 10 years.

“This research underscores that the best way to reduce spending on nutrition assistance is not cutting food aid for families struggling against hunger, but improving the bottom lines of families by ensuring that they are not earning poverty wages to begin with,” said CAP President Neera Tanden. “Lawmakers calling themselves fiscal conservatives should wholly embrace a minimum-wage increase that will generate $46 billion of savings in nutrition assistance aid alone.”

According to the findings in the report, a 10 percent increase in the minimum wage would reduce SNAP enrollments by between 2.4 percent and 3.2 percent and reduce program expenditures by an estimated 1.9 percent. Taking into account each state’s 2014 minimum-wage level, the results are then applied to the current legislative proposal to raise the federal minimum wage to $10.10 per hour. The results imply that a raise in the minimum wage would reduce SNAP enrollments by 3.3 million to 3.8 million people. The total annual decrease in program expenditures is nearly $4.6 billion, or about 6 percent of current SNAP program expenditures. The report also includes a state-by-state breakdown of savings and enrollment reductions.

“Opponents of both social insurance and a minimum wage increase can’t have it both ways. If they’re really concerned about rewarding hard work, they should ensure that it is rewarded with a fair wage,” said Sen. Sherrod Brown (D-OH). “Every day, millions of Americans work hard, take responsibility, but are barely getting by. At the same time that they struggle to put food on the table for their families, there is an orchestrated attempt to cut SNAP and other safety net programs. Opponents wrongly argue that these programs foster a culture of dependency and don’t reward work. If we raise the minimum wage, we can ensure that more Americans earn a living wage, reduce federal spending, and boost the economy.”

Read the report: The Effects of Minimum Wages on SNAP Enrollments and Expenditures by Michael Reich and Rachel West

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To speak with an expert, contact Katie Peters at [email protected] or 202.741.6285.