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According to a new study low wages are costing all Americans. In fact, the just-released report from the University of California, Berkeley, Center for Labor Research and Education found that poverty-level wages cost U.S. taxpayers a whopping $153 billion annually.
The costs are in terms of public support to working families, including $25 billion at the state level, according to the report, which details the state-by-state cost to taxpayers of low wages in the United States.
“When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs,” said Ken Jacobs, chair of the labor center and co-author of the new report. “This creates significant cost to the states.”
The report looked at the state spending for Medicaid/Children’s Health Insurance Program and Temporary Aid to Needy Families (TANF), and federal spending for those programs as well as food stamps (SNAP) and the Earned Income Tax Credit (EITC), reports UC Berkeley.
The report offered some eye-opening facts:
–On average, 52 percent of state public assistance spending actually goes to support working families. In California the costs are $3.7 billion, $3.3 billion in New York, and $2 billion in Texas.
–Many workers need extra support, not just those in one sector. There is a diverse range of occupations, including frontline fast-food workers (52 percent), childcare workers (46 percent), home care workers (48 percent), and even part-time college faculty (25 percent).
So actually raising the national minimum wage would equal substantial savings to state and federal governments.
“Our public-assistance programs provide a vital support system for American families. Raising wages would lift working families out of poverty and allow all levels of government to better target how our tax dollars are used,” Jacobs said.
