Low Wages Cost Taxpayers $153B a Year

About half of public assistance goes to working households
By Polly Davis Doig,  Newser Staff
Posted Apr 13, 2015 2:04 PM CDT
Low Wages Cost Taxpayers $153B a Year
In this Thursday, Dec. 4, 2014, file photo, a customer, left, stands at the counter as a group of protesters demonstrate inside a McDonald's in Jackson, Miss.   (AP Photo/The Clarion-Ledger, Joe Ellis, File)

The Fight for $15 is planning a big day for Tax Day, and ahead of that comes a study that gives credence to its premise that minimum wage isn't enough to live on: A UC Berkeley study out today pegs the cost of low wages at $153 billion a year, paid by the American taxpayer via public assistance programs. "When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs," says a study co-author. To wit: Fully 56% of state and federal welfare dollars went to employed households. Some industries see half their workers on public assistance, notes the Wall Street Journal. Per the study, which examined spending on Medicaid/Children’s Health Insurance Program, Temporary Aid to Needy Families, food stamps, and the Earned Income Tax Credit:

  • States drop an average of 52% of public assistance on employed households.
  • Some of the industries with workers most dependent on public assistance include frontline fast-food workers (52%), childcare workers (46%), home care workers (48%), and part-time college faculty (25%).
  • Wages in the decade ending in 2013 were flat or negative for the bottom 70% of workers.
"Raising wages would lift working families out of poverty and allow all levels of government to better target how our tax dollars are used," says the co-author of the study, which we note was funded by the Service Employees International Union. (More Fight for $15 stories.)

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