effects-of-minimum-wages-on-snap

Conclusion
An extensive body <strong>of</strong> literature examines employment <strong>effects</strong> <strong>of</strong> the <strong>minimum</strong>
wage. A much smaller set <strong>of</strong> studies examines how the <strong>minimum</strong> wage affects
poverty, and only a handful <strong>of</strong> papers examine the <strong>effects</strong> <strong>of</strong> the <strong>minimum</strong> wage
on the EITC. Our analysis is the first to examine the <strong>effects</strong> <strong>of</strong> the <strong>minimum</strong>
wage on SNAP.
Our findings indicate that increased earnings from <strong>minimum</strong> wage changes do
reduce SNAP enrollments and expenditures. We estimate that the Harkin-Miller
bill would save taxpayers nearly $4.6 billion per year, equivalent to 6.1 percent
<strong>of</strong> SNAP expenditures in 2012, the last year for which data are available. Over a
10-year period, the estimated savings amount to nearly $46 billion.
Our report is subject to limitations that we expect to overcome in our future
research. First, the findings do not take into account possible interactions among
SNAP, the EITC, and Medicaid. The eligibility cut<strong>of</strong>fs among these programs
are quite different, suggesting that such interactions may be minor. Nonetheless,
the joint <strong>effects</strong> can only be determined by further research using a causal
model. Second, it would be useful to know the distribution <strong>of</strong> SNAP reductions
along the wage distribution. Using the Congressional Budget Office’s calculations
<strong>of</strong> how much the total dollar value <strong>of</strong> wage would increase under the Harkin-
Miller proposal, our findings imply that the decline in overall SNAP spending
equals about 15 percent <strong>of</strong> the total resulting increase in <strong>wages</strong>. The amount and
distribution <strong>of</strong> this <strong>of</strong>fset are <strong>of</strong> considerable interest. Minimum wage beneficiaries
who come from working families already well above the poverty line would not
see any <strong>of</strong>fset, while those who are currently considerably below the poverty line
will see larger <strong>of</strong>fsets. These issues will also be a subject for our future research.
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