I recently came across a citation to a fascinating report from the White House Council of Economic Advisors. (Yes, I know I’m a nerd and my reading habits are embarrassingly dorkish…). But it was interesting!
When asked to study the cost/benefit of various crime reduction policies, the Council responded with data like this:
The authors consider a few ways of reducing crime. They forecast that hiking the federal minimum hourly wage from $7.25 to $12 would reduce crime by 3 percent to 5 percent, as fewer people would be forced to turn to illegal activity to make ends meet. By contrast, spending an additional $10 billion on incarceration — a massive increase — would reduce crime by only 1 percent to 4 percent, according to the report…
They also calculated the true social costs of crime. It totaled almost $308 billion in 2014. So a simple move like raising the minimum wage to $12 doesn’t only reduce crime by 3%-5%, it would save $8 to $17 billion a year.
The problem, of course, is that in the United States, policies are not evaluated and/or implemented based upon any sort of cost/benefit analysis. A continuing influence of this country’s early Calvinism is our predictable analysis of even the most prosaic policies as “moral” issues, requiring determination of “deservedness.” We don’t ask, what would work best? Instead, we ask “How do we avoid rewarding people for behaviors (real or imagined) of which we disapprove?”
It comes back to a conviction–evidently baked into American DNA–that if people are poor, they must be morally defective. Lazy. Unmotivated. Lacking “middle-class values.”
And all of the data that demonstrates otherwise is simply disregarded as the product of wooly-headed liberals.
If we made policy based upon evidence, we would add the projected reduction in crime to the myriad other benefits of raising the minimum wage.
- Increased buying power and consumer demand (as a result of more people having more disposable income) would drive improved economic performance.
- According to research, easing the incredible stress experienced by so many low-wage families would reduce familial dysfunctions and even domestic violence.
- Ameliorating the fiscal pressures that cause poor families to move more often would reduce the disruptive effect on the education of children who frequently change schools.
- And guess what? We would dramatically reduce the current levels of government outlays for social programs.
Someone trying to support a family on today’s minimum wage does not even reach the federal government’s poverty line for a family of three. They would make about $14,500 per year. The federal poverty line for a family of three is $18,123. If the minimum wage were increased to a level at which families could sustain themselves, fewer people would end up needing government assistance for housing, food, or health care. This would be a significant benefit to taxpayers and to states’ budgets.
So why is it so hard to raise the minimum wage?
One intriguing theory, from the Economic Policy Institute, is that raising the minimum wage may be seen as a women’s issue.
While increasing the minimum wage would have a sizable impact on both men and women, it would disproportionately affect women. That women comprise 54.5 percent of workers who would be affected by a potential minimum-wage increase makes it a women’s issue… The share of those affected who are women varies somewhat by state, from a low of 49.3 percent in California to a high of 64.4 percent in Mississippi (according to the authors’ analysis of Current Population Survey Outgoing Rotation Group microdata). California and Nevada, also at 49.3 percent, are the only states where women do not constitute the majority of those who would benefit.
I hate to be a cynic, but maybe the disproportionate benefit to women is why we have so much trouble getting it done.
Misogyny? Or just our usual penchant for stubborn ideology over evidence?