Arguments for or against raising the minimum wage to $ 15 an hour typically center on how many jobs could be lost and how many people could be lifted out of poverty.
Far less attention has been paid to the impact of the increase in the minimum wage on tax spending.
A new report released by economists at the Economic Policy Institute, a progressive think tank, found that raising the federal minimum wage to $ 15 / hour and removing the minimum wage by 2025 would generate tax revenues of $ 13 billion to $ 30 billion annually by 2025 would release.
If the federal minimum wage remains at $ 7.25 an hour, as it has been since 2009, the $ 13 billion to $ 30 billion will go to public welfare programs including the Supplemental Nutrition Assistance Program and Earned Income Tax Credit (EITC), as well as Child Tax Credit (CTC) .
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The report's authors – Ben Zipperer, David Cooper, and Josh Bivens – made these estimates based on previous EPI research, which suggests that around 32 million Americans would have higher revenues by 2025 if the minimum wage dropped to $ 15 an hour would be raised.
The Congressional Budget Office, a bipartisan federal agency, estimated in a similar analysis of the minimum wage that fewer Americans, 17 million, would earn more.
These Americans, who benefit the most from minimum wage increases, come from disproportionately low-income families and rely on government aid. But with improved incomes, "many workers and their families would no longer qualify or need public aid programs, reducing overall government spending on those programs," the report's authors wrote.
EITC and CTC spending would decrease by up to $ 20.7 billion annually, according to the researchers. Spending on SNAP alone would decrease by as much as $ 5.4 billion.
Ultimately, the increased wages some workers will earn from raising the minimum wage will go between $ 7 billion and $ 13.9 billion a year for social security and medical care, the researchers said.
In the meantime, the debate continues on the rise in wages for workers and its implications, as well as the prospect of job losses, especially for small businesses.
A recent report in the Quarterly Journal of Economics of 138 significant changes in the state minimum wage between 1979 and 2016 found that “the total number of low-wage jobs remained essentially unchanged in the five years following the increase. At the same time, the direct impact of the minimum wage on median income has been reinforced by modest wage spillovers at the end of the wage distribution. "
The Congressional Budget Office released a study last year that found that increasing the federal minimum wage from $ 7.25 an hour to $ 15 an hour would increase the wages of 17 million workers, and another 10 million Americans who already earning over USD 15 an hour, this would also see an improvement in their wages. However, the CBO also found that 1.3 million workers would lose their jobs, representing a 0.8% reduction in the number of employees.