"How To Reduce Food Stamp Spending Without Cutting The Program"
Republicans disappointed at their failure to cut food stamps by $40 billion last summer should support progressive efforts to raise the minimum wage to $10.10. Such a wage hike would reduce spending for the Supplemental Nutrition Assistance Program (SNAP) by $46 billion over the next decade, according to a new report from the Center for American Progress (CAP).
The report uses 20 years of data to create a general model of what raising wages does to the cost of the country’s food stamp program. For every 10 percent increase to the minimum wage, food stamps enrollment falls by between 2.4 and 3.2 percent and total spending on the program falls by 1.9 percent, the report finds. Applying that finding to the gap between the various wage minimums in force in each state and the proposed $10.10 hourly floor, the researchers find that such a hike would slice $4.6 billion off the country’s food stamps bill each year.
The connection between food stamps costs and minimum wages is so robust, according to the report, that relatively small differences in the minimum wage yield very large cost effects. The 10-year savings from an $11 hourly minimum would be roughly $62 billion.
Critics say that raising the minimum wage kills jobs, which would raise the cost of programs like food stamps by increasing the number of jobless people who qualify for the aid. CAP’s research reveals, however, that raising the wage floor consistently reduces SNAP enrollment and costs. The report controls for various differences between state economies that might alter how minimum wage laws and food stamps enrollment interact, allowing CAP’s analysts to say that the wage increases are actively causing the drop in SNAP costs, rather than just being correlated.
Previous research has found that low-wage workers are major consumers of all sorts of public benefits, including SNAP. Low wages cost taxpayers a quarter-trillion dollars each year in public assistance spending for working people who earn poverty wages, according to one study.
Republicans were so eager to cut tens of billions of dollars out of the SNAP program last summer that they scuttled years of negotiations over the farm bill and passed a $40 billion cut to food aid spending. CAP’s research indicates they could reduce the cost of food assistance by significantly more than that without hurting millions of the neediest people in the country, but to do so they will have to drop the opposition to minimum wage laws that is so common among conservatives. Meanwhile, SNAP costs have already begun falling as the recovery wears on and are projected to collapse even without further cuts from Congress thanks to job growth.