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Raising the minimum wage would cut food stamp costs; Editorial; Beaver County Times; May 12, 2014.
Below is a critique of this editorial.
“People don’t normally connect the minimum wage with food stamps, but U.S. Sen. Robert P. Casey, D-Pa., did so recently in an interesting press release.”
[RWC] Actually, Sen. Casey didn’t “connect the minimum wage with food stamps.” If you check his press release, you’ll find Mr. Casey simply served as the conduit for a piece entitled “The Effects of Minimum Wages on SNAP Enrollments and Expenditures” produced by the leftist Center for American Progress (CAP). With the exception of the county-by-county figures below, all of the figures came from CAP, not Mr. Casey. Does anyone care to guess why the BCT would deceive its readers?
While the editorial below claims “expenditures for the [food stamp] program would be cut by nearly $4.6 billion,” what you won’t read in this editorial is from where the money will come to pay for the 39.3% minimum wage increase. There is no free lunch. At best, and in a completely unrealistic scenario, the same people who would pay for the minimum wage increase (customers, employers, you, and I) would benefit from reduced taxes as a result of the alleged reduced spending. All we would do is exchange one out-in-the-open tax for an increase in the stealth tax called the minimum wage. Since we’re running deficits, however, reduced food stamp spending would not reduce out-in-the-open tax rates and we’d still be stuck with the stealth tax increase. The members of the BCT editorial board are smart; they know this.
At its theoretical best, the minimum wage is a feel-good exercise that does nothing. In practice, however, the minimum wage does harm. In both cases the minimum wage is akin to a dog chasing its tail. Please read my paper “The Minimum Wage” for an in-depth discussion.
“Casey contended that by raising the minimum wage from $7.25 to $10.10, 3.1 million people in the U.S. would be lifted out of poverty by no longer having to rely on food stamps. Expenditures for the program would be cut by nearly $4.6 billion, added Casey.”
[RWC] “Raising the minimum wage from $7.25 to $10.10” lifts someone from poverty? Did the BCT really mean to say not qualifying for food stamps means a family/person is “out of poverty?” Why stop at $10.10/hour?
“In Pennsylvania alone, Casey said, 156,000 people would no longer need food stamps at a savings of $207.5 million.
“Casey distributed numbers for each county in the state, showing how they would be affected by the reduction in the food stamp program, and they are significant for our local residents. In Beaver County, 2,300 people would no longer need food stamps at a cost savings of $3.08 million. Lawrence and Allegheny counties would see their food stamp rolls reduced by 1,400 and 14,200 recipients, respectively. The cost savings would be $1.93 million and $18.9 million, respectively.”
[RWC] The county-specific figures appear to be Mr. Casey’s only contribution, applying the CAP statewide figure to USDA county-by-county data.
“For all three counties, the number of residents no longer needing food stamps would be 17,900 and the savings would be $33.9 million. Those are some sizable numbers indeed.
“Of course, don’t look for an increase in the federal minimum wage anytime soon. While Democrats overwhelming favor an increase, Republicans in Congress are dead set against it. The measure failed in the U.S. Senate two weeks ago, falling six votes short of the 60 votes necessary to break a Republican filibuster.
“The vote, as usual, broke down along party lines, with U.S. Sen. Bob Corker, the lone Republican to vote for the measure.
“If the bill somehow does make its way through the Senate, it will almost certainly fail in the House of Representatives where the Republicans rule as the majority party.
“There’s little hope the situation will change after the congressional mid-term elections in the fall either, as Democrats are expected to retain control of the Senate while Republicans are predicted to remain in charge of the U.S. House of Representatives.
“Pointing to a Congressional Budget Office analysis, Republicans contend as many as 500,000 Americans could lose their jobs if the minimum wage is increased.
“But Democrats noted the same CBO report stated that 16.5 million low-wage Americans would see an increase in their earnings as a result of the boost in the minimum wage and that a smaller number of higher-wage earners also would see their incomes grow.
“There are signs that most people do side with Democrats on the issue. A New York Times/CBS survey found that 65 percent of all Americans support hiking the federal minimum wage, including 52 percent of the Republicans surveyed.
“But Republicans are showing no signs of yielding, and both sides are hoping to use the issue in various appeals to their constituents in the upcoming congressional races this fall.
“It’s a shame that the two sides can’t at least come to some type of compromise on the controversial issue.
“As Casey’s numbers show, there are real people whose lives would be improved dramatically by an increase in the federal minimum wage, and a good number of those people live right here.”
[RWC] Again, these are CAP’s numbers, not Mr. Casey’s. More importantly, the minimum wage does harm.
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