Minimum Wage Increases Do Not Reduce Reliance on Gov’t Assistance

Minimum wage increases do not reduce reliance on government assistance programs, according to a report from the Employment Policies Institute.

Some argue that by raising the minimum wage, individuals would participate less in social safety net programs, and in turn this would save taxpayers money. The institute has not found much proof to support this claim.

“Federal and state minimum wage increases have had no measurable impact on the use by working-age adults of SNAP, Medicaid, Temporary Assistance for Needy Families, and the Women, Infants, and Children program,” states the report. “In some specifications, they find evidence of an increase in the use of free and reduced-price lunches and housing subsidies following minimum wage increases.”

When looking at certain groups of minimum wage earners, the report finds that hiking the wage reduces reliance for government assistance for some at the expense of others, creating “winners and losers.” For example, after women with less work experience get a higher minimum wage, data finds some reduction in SNAP enrollment. At the same time, non-white employees and young individuals without a high-school diploma saw more reliance on the free and reduced lunch program.

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