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A $15 minimum wage would be life-changing for many workers and their families — it could mean the difference between poverty and being able to put food on table, building a savings account, or investing in their children’s future.

Raise the minimum wage, lower the dependency on safety nets

Beyond the working families who will get a raise, every single American taxpayer has a stake in raising the minimum wage. When corporations like McDonald’s pay poverty wages, workers often turn to public safety net programs to make ends meet. Our recent study finds that families of half of the workers who would receive a pay increase under the proposed $15 minimum wage bill in Congress are enrolled in one or more public safety net programs, at a cost of $107 billion a year.

Some lawmakers, including Senate Budget Committee Chairman Bernie Sanders, are calling on Congress to employ a process known as budget reconciliation, which allows legislation that changes government spending or revenues to pass by a simple majority vote, not subject to a filibuster.

Our study on the public cost of low wages supports Sanders’ contention that raising the minimum wage to $15 an hour could have a measurable savings to the federal budget — a key consideration in determining whether the legislation meets the criteria for moving through the reconciliation process. This is backed up by new research finding that a $15 minimum wage could save the federal budget of at least $65 billion per year.

The federal minimum wage has stalled at $7.25 an hour since 2009 – the longest-ever period without an increase since the Fair Labor Standards Act was passed in 1938. A $15 minimum wage would bring savings to our safety net system — funds that can be redirected to other essential needs. As we look at recovery from pandemic-related unemployment and recessions, it is especially important that cash-strapped states are able to target public funds for maximum community benefit.

In our study, we look at working families in the 42 states that have not passed a $15 minimum wage law. Two-thirds of fast-food workers, half of childcare workers, and three out of five homecare workers in these states are paid so little that their families rely on public assistance.

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