Higher Wages Would Reduce Gov't Burden

For many workers in certain sectors, wages are so low that even those who work full time must rely heavily on government assistance to make ends meet. This suggests that low pay by many employers is placing unwarranted demands on public resources. A new report examines the utilization of public assistance among low-wage workers and their families. The report concludes that higher hourly wages for low- and middle-wage workers, which can be achieved through a variety of labor-market policies, would unambiguously generate savings in government safety-net and income-support programs:

• For every $1 rise in wages among workers earning under $12.16 per hour, spending on government assistance programs falls by roughly $5.2 billion. 

• Raising the federal minimum wage to $12 per hour by 2020 would reduce means-tested public assistance spending by $17 billion annually.

Source: Economic Policy Institute, 2/3/16, Higher Wages