Minimum Wage Boost Could Cut Food Stamp Spending by $4.6B

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A new study finds that raising the minimum wage would reduce food stamp expenditures by 6 percent.

Don’t like food stamps? Raise the minimum wage. That’s the finding of a new study by the Center for American Progress, a left-leaning Washington, D.C., think tank.

The report says a hike in the minimum wage from $7.25 to $10.10 per hour, as proposed by the Obama administration, would cut the federal food stamp bill by $4.6 billion a year and reduce enrollment in the program by up to 9.2 percent.

The report is one of the first to study how increasing the federal minimum wage would impact the Supplemental Nutrition Assistance Program or SNAP, commonly known as food stamps. SNAP reaches about 1 in 7 Americans and had a hefty $78 billion price tag in 2011.

University of California economist Michael Reich co-authored the Center for American Progress report. According to The Washington Post:

“What is the best way to make people independent and be able to sustain their standard of living without having to depend on government support?,” Reich asked. “It turns out that raising the minimum wage helps make people more independent while saving the government money.”

It’s estimated that taxpayers spend about $7 billion a year to subsidize low-wage fast-food workers – which we talked about here — and $900 million a year helping bank tellers – which we discussed here. SNAP represents a chunk of those funds.

Opponents of an increased minimum wage argue that it would eliminate some jobs and slow job growth.

What do you think of the reported link between hiking the minimum wage and decreased dependency on government programs, like food stamps? Share your comments below or on our Facebook page.

Stacy Johnson

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