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Simple Ways to Plan, Enjoy, and Stick to a Healthy Diet
Healthy eating is not about strict dietary limitations, staying unrealistically thin, or depriving yourself of the foods you love. Rather, it's about feeling great, having more energy, improving your health, and boosting your mood. If you feel overwhelmed by all the conflicting nutrition and diet advice out there, you're not alone. It seems that for every expert who tells you a certain food is good for you, you'll find another saying exactly the opposite. But by using these simple tips, you can cut through the confusion and learn how to create-and stick to-a tasty, varied, and nutritious diet that is as good for your mind as it is for your body.
What is a healthy diet?

Eating a healthy diet doesn't have to be overly complicated. While some specific foods or nutrients have been shown to have a beneficial effect on mood, it's your overall dietary pattern that is most important. The cornerstone of a healthy diet pattern should be to replace processed food with real food whenever possible. Eating food that is as close as possible to the way nature made it can make a huge difference to the way you think, look, and feel.

The Healthy Eating Pyramid

The Harvard Healthy Eating Pyramid represents the latest nutritional science. The widest part at the bottom is for things that are most important. The foods at the narrow top are those that should be eaten sparingly, if at all.

The fundamentals of healthy eating

While some extreme diets may suggest otherwise, we all need a balance of protein, fat, carbohydrates, fiber, vitamins, and minerals in our diets to sustain a healthy body. You don't need to eliminate certain categories of food from your diet, but rather select the healthiest options from each category.

Protein gives you the energy to get up and go-and keep going-while also supporting mood and cognitive function. Too much protein can be harmful to people with kidney disease, but the latest research suggests that many of us need more high-quality protein, especially as we age. That doesn't mean you have to eat more animal products-a variety of plant-based sources of protein each day can ensure your body gets all the essential protein it needs. Learn more "

Fat. Not all fat is the same. While bad fats can wreck your diet and increase your risk of certain diseases, good fats protect your brain and heart. In fact, healthy fats-such as omega-3s-are vital to your physical and emotional health. Including more healthy fat in your diet can help improve your mood, boost your well-being, and even trim your waistline. Learn more "

Fiber. Eating foods high in dietary fiber (grains, fruit, vegetables, nuts, and beans) can help you stay regular and lower your risk for heart disease, stroke, and diabetes. It can also improve your skin and even help you to lose weight. Learn more "

Calcium. As well as leading to osteoporosis, not getting enough calcium in your diet can also contribute to anxiety, depression, and sleep difficulties. Whatever your age or gender, it's vital to include calcium-rich foods in your diet, limit those that deplete calcium, and get enough magnesium and vitamins D and K to help calcium do its job. Learn more "

Carbohydrates are one of your body's main sources of energy. But most should come from complex, unrefined carbs (vegetables, whole grains, fruit) rather than sugars and refined carbs. Cutting back on white bread, pastries, starches, and sugar can prevent rapid spikes in blood sugar, fluctuations in mood and energy, and a build-up of fat, especially around your waistline. Learn more "

Making the switch to a healthy diet

Switching to a healthy diet doesn't have to be an all or nothing proposition. You don't have to be perfect, you don't have to completely eliminate foods you enjoy, and you don't have to change everything all at once-that usually only leads to cheating or giving up on your new eating plan.

A better approach is to make a few small changes at a time. Keeping your goals modest can help you achieve more in the long term without feeling deprived or overwhelmed by a major diet overhaul. Think of planning a healthy diet as a number of small, manageable steps-like adding a salad to your diet once a day. As your small changes become habit, you can continue to add more healthy choices.

Setting yourself up for success

To set yourself up for success, try to keep things simple. Eating a healthier diet doesn't have to be complicated. Instead of being overly concerned with counting calories, for example, think of your diet in terms of color, variety, and freshness. Focus on avoiding packaged and processed foods and opting for more fresh ingredients whenever possible.

Prepare more of your own meals. Cooking more meals at home can help you take charge of what you're eating and better monitor exactly what goes into your food. You'll eat fewer calories and avoid the chemical additives, added sugar, and unhealthy fats of packaged and takeout foods that can leave you feeling tired, bloated, and irritable, and exacerbate symptoms of depression, stress, and anxiety.

Make the right changes. When cutting back on unhealthy foods in your diet, it's important to replace them with healthy alternatives. Replacing dangerous trans fats with healthy fats (such as switching fried chicken for grilled salmon) will make a positive difference to your health. Switching animal fats for refined carbohydrates, though (such as switching your breakfast bacon for a donut), won't lower your risk for heart disease or improve your mood.

Read the labels. It's important to be aware of what's in your food as manufacturers often hide large amounts of sugar or unhealthy fats in packaged food, even food claiming to be healthy.

Focus on how you feel after eating. This will help foster healthy new habits and tastes. The healthier the food you eat, the better you'll feel after a meal. The more junk food you eat, the more likely you are to feel uncomfortable, nauseous, or drained of energy.

Drink plenty of water. Water helps flush our systems of waste products and toxins, yet many of us go through life dehydrated-causing tiredness, low energy, and headaches. It's common to mistake thirst for hunger, so staying well hydrated will also help you make healthier food choices.

Moderation: important to any healthy diet

What is moderation? In essence, it means eating only as much food as your body needs. You should feel satisfied at the end of a meal, but not stuffed. For many of us, moderation means eating less than we do now. But it doesn't mean eliminating the foods you love. Eating bacon for breakfast once a week, for example, could be considered moderation if you follow it with a healthy lunch and dinner-but not if you follow it with a box of donuts and a sausage pizza.

Try not to think of certain foods as "off-limits." When you ban certain foods, it's natural to want those foods more, and then feel like a failure if you give in to temptation. Start by reducing portion sizes of unhealthy foods and not eating them as often. As you reduce your intake of unhealthy foods, you may find yourself craving them less or thinking of them as only occasional indulgences.

Think smaller portions. Serving sizes have ballooned recently. When dining out, choose a starter instead of an entree, split a dish with a friend, and don't order supersized anything. At home, visual cues can help with portion sizes. Your serving of meat, fish, or chicken should be the size of a deck of cards and half a cup of mashed potato, rice, or pasta is about the size of a traditional light bulb. By serving your meals on smaller plates or in bowls, you can trick your brain into thinking it's a larger portion. If you don't feel satisfied at the end of a meal, add more leafy greens or round off the meal with fruit.

Take your time. It's important to slow down and think about food as nourishment rather than just something to gulp down in between meetings or on the way to pick up the kids. It actually takes a few minutes for your brain to tell your body that it has had enough food, so eat slowly and stop eating before you feel full.

Eat with others whenever possible. Eating alone, especially in front of the TV or computer, often leads to mindless overeating.

Limit snack foods in the home. Be careful about the foods you keep at hand. It's more challenging to eat in moderation if you have unhealthy snacks and treats at the ready. Instead, surround yourself with healthy choices and when you're ready to reward yourself with a special treat, go out and get it then.

Control emotional eating. We don't always eat just to satisfy hunger. Many of us also turn to food to relieve stress or cope with unpleasant emotions such as sadness, loneliness, or boredom. But by learning healthier ways to manage stress and emotions, you can regain control over the food you eat and your feelings.

It's not just what you eat, but when you eat

Eat breakfast, and eat smaller meals throughout the day. A healthy breakfast can jumpstart your metabolism, while eating small, healthy meals keeps your energy up all day.

Avoid eating late at night. Try to eat dinner earlier and fast for 14-16 hours until breakfast the next morning. Studies suggest that eating only when you're most active and giving your digestive system a long break each day may help to regulate weight.

Add more fruit and vegetables to your diet

Fruit and vegetables are low in calories and nutrient dense, which means they are packed with vitamins, minerals, antioxidants, and fiber. Focus on eating the recommended daily amount of at least five servings of fruit and vegetables and it will naturally fill you up and help you cut back on unhealthy foods. A serving is half a cup of raw fruit or veg or a small apple or banana, for example. Most of us need to double the amount we currently eat.

To increase your intake:

Add antioxidant-rich berries to your favorite breakfast cereal

Eat a medley of sweet fruit-oranges, mangos, pineapple, grapes-for dessert

Swap your usual rice or pasta side dish for a colorful salad

Instead of eating processed snack foods, snack on vegetables such as carrots, snow peas, or cherry tomatoes along with a spicy hummus dip or peanut butter

How to make vegetables tasty

While plain salads and steamed veggies can quickly become bland, there are plenty of ways to add taste to your vegetable dishes.

Add color. Not only do brighter, deeper colored vegetables contain higher concentrations of vitamins, minerals and antioxidants, but they can vary the flavor and make meals more visually appealing. Add color using fresh or sundried tomatoes, glazed carrots or beets, roasted red cabbage wedges, yellow squash, or sweet, colorful peppers.

Liven up salad greens. Branch out beyond lettuce. Kale, arugula, spinach, mustard greens, broccoli, and Chinese cabbage are all packed with nutrients. To add flavor to your salad greens, try drizzling with olive oil, adding a spicy dressing, or sprinkling with almond slices, chickpeas, a little bacon, parmesan, or goat cheese.

Satisfy your sweet tooth. Naturally sweet vegetables-such as carrots, beets, sweet potatoes, yams, onions, bell peppers, and squash-add sweetness to your meals and reduce your cravings for added sugar. Add them to soups, stews, or pasta sauces for a satisfying sweet kick.

Cook green beans, broccoli, Brussels sprouts, and asparagus in new ways. Instead of boiling or steaming these healthy sides, try grilling, roasting, or pan frying them with chili flakes, garlic, shallots, mushrooms, or onion. Or marinate in tangy lemon or lime before cooking.

Plan quick and easy meals ahead

Healthy eating starts with great planning. You will have won half the healthy diet battle if you have a well-stocked kitchen, a stash of quick and easy recipes, and plenty of healthy snacks.

Plan your meals by the week or even the month

One of the best ways to have a healthy diet is to prepare your own food and eat in regularly. Pick a few healthy recipes that you and your family like and build a meal schedule around them. If you have three or four meals planned per week and eat leftovers on the other nights, you will be much farther ahead than if you are eating out or having frozen dinners most nights.

Shop the perimeter of the grocery store

In general, healthy eating ingredients are found around the outer edges of most grocery stores, while the center aisles are filled with processed and packaged foods that aren't good for you. Shop the perimeter of the store for most of your groceries (fresh fruits and vegetables, fish and poultry, whole grain breads and dairy products), add a few things from the freezer section (frozen fruits and vegetables), and visit the aisles for spices, oils, and whole grains (like rolled oats, brown rice, whole wheat pasta).

Cook when you can

Try to cook one or both weekend days or on a weekday evening and make extra to freeze or set aside for another night. Cooking ahead saves time and money, and it is gratifying to know that you have a home cooked meal waiting to be eaten.

Challenge yourself to come up with two or three dinners that can be put together without going to the store-utilizing things in your pantry, freezer, and spice rack. A delicious dinner of whole grain pasta with a quick tomato sauce or a quick and easy black bean quesadilla on a whole wheat flour tortilla (among endless other recipes) could act as your go-to meal when you are just too busy to shop or cook.

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Healthy Eating Simple Ways to Plan, Enjoy, and Stick to a Healthy Diet Healthy eating is not about strict dietary limitations, staying unrealistically thin, or depriving yourself of the foods you love. Rather, it's about feeling great, having more energy, improving your health, and boosting

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Dear fast food workers,

It's come to my attention that many of you, supposedly in 230 cities across the country, are walking out of your jobs today and protesting for $15 an hour. You earnestly believe -- indeed, you've been led to this conclusion by pandering politicians and liberal pundits who possess neither the slightest grasp of the basic rules of economics nor even the faintest hint of integrity -- that your entry-level gig pushing buttons on a cash register at Taco Bell ought to earn you double the current federal minimum wage.

I'm aware, of course, that not all of you feel this way. Many of you might consider your position as Whopper Assembler to be rather a temporary situation, not a career path, and you plan on moving on and up not by holding a poster board with "Give me more money!" scrawled across it, but by working hard and being reliable. To be clear, I am not addressing the folks in this latter camp. They are doing what needs to be done, and I respect that.

Instead, I want to talk to those of you who actually consider yourselves entitled to close to a $29,000 a year full-time salary for doing a job that requires no skill, no expertise and no education; those who think a fry cook ought to earn an entry-level income similar to a dental assistant; those who insist the guy putting the lettuce on my Big Mac ought to make more than the emergency medical technician who saves lives for a living; those who believe you should automatically be able to "live comfortably," as if "comfort" is a human right.

Everyone deserves to live comfortably if they work hard, and working in fast food is working hard.
- Nina Li (@NinaSerafina) April 15, 2015

Final tweet on the subject. EVERY working American citizen deserves to be able to live comfortably. #fightfor15 - Samuel (@Coopersws_) April 18, 2014

Everyone who works full-time in America deserves to earn a comfortable living-#RaiseTheWage #FightFor15 are starters http://t.co/Oalk9bX1Ng - TaxWallStreetParty (@TaxWallStParty) March 6, 2015

To those in this category, I have a few things I need to say, for your own sake:

First, let me start with a story. It's anecdotal, obviously, but then this whole #FightFor15 "movement" is based entirely on anecdotes.

I submit mine: I'm 28 years old now. I started working when I was about 15. I did hourly, customer service-type stuff at grocery stores, snowball stands and pizza places, never making much more than the bare minimum at any of them.

When I was 20 I moved out of the house and got my first job in radio. Starting out as a rock DJ in Delaware, I made $17,000 a year, or about $8 an hour. I lived off of that, earning a few small raises through the years -- having to eat fewer meals, buy fewer things, and, God forbid, even forgo cable and Internet access in my apartment -- right up to when I got married at 25.

[mattwalsh-social-instory]

Around my 26th birthday, over 10 years after my first job, I landed a position in Kentucky that paid me around $40,000. It was the first time I'd ever made the equivalent of $15 an hour or more. Again, this was after 10 years of working. Of course, our newfound wealth soon had to be split between four people, as my wife became pregnant with our twins within a few months of me starting the job.

After finding out that we were expecting not one baby, but two, I started my website. I wrote every day for six months before I made much more than a dime on it. It wasn't until August 2013 that I earned my first significant chunk of money. By my 27th birthday last year, I was finally making a "comfortable living."

It took me over a decade to get here.

You think the jobs I had when I was 16 should have provided me with the comfortable living I just established in my late 20s? Frankly, I think you're delusional.

To understand how delusional, consider that a $15 an hour full-time salary would put you in the same ballpark as biologists, auto mechanics, biochemists, teachers, geologists, roofers and bank tellers.

You'd be making more than some police officers.

You'd easily out-earn many firefighters.

Ironically, you'd be fast food workers with starting salaries higher than many professional chefs, which is a bit like paying a tattoo artist less than the person who paints cat whiskers on your face at the carnival.

You'd be halfway to the income of accountants, engineers and physical therapists.

Does that sound fair? It might sound fun, but does it sound fair? These are highly skilled jobs that require years of training and education. These are jobs which, in some cases, our society profoundly relies upon. Jobs with enormous responsibilities. Jobs that are considerably more complex and complicated than refilling the soda fountain at Roy Rogers.

In this photo taken, Aug. 1, 2013, demonstrators protesting what they say are low wages and improper treatment for fast-food workers march in downtown Seattle. (AP Photo/Elaine Thompson, File)

I'm not insulting you, but when you claim you ought to be able to stroll into Hardee's and be immediately rewarded with a salary higher than crane operators and medical lab technicians, someone needs to talk some sense into you.

I wish I didn't have to point out that you are doing something which is fundamentally worth very little, but when you stomp your feet and insist you should be handed what some of us worked decades to earn, that's when it becomes time for, as the kids would say, real talk.

So, real talk: Your job isn't worth 15 bucks an hour. Sure, as a human being, you're priceless. As a child of God, you're precious, a work of art, a freaking miracle. But your job wrapping hamburgers in foil and putting them in paper bags -- that has a price tag, and the price tag ain't anywhere close to the one our economy and society puts on teachers and mechanics.

Don't like it? Well, you shouldn't. It's fast food. It's menial. It's mindless. It's not supposed to be a career. It's not supposed to be a living. An entry-level position making roast beef sandwiches at Arby's isn't meant to be something you do for 26 years.

It isn't paying enough? OK, get another job. Get a second job. Get a third job. Get a different job.

Trust me, this is a better plan than asking the government to force your employer to pay you significantly more than the market allows.

I know you might not care about the economics of this thing. After all, you aren't economists (but with $15 an hour you'd almost be in the same income bracket). But it should be of some interest to learn a $15 an hour minimum wage would represent a steep tax on jobs. And the problem is simple: when you tax something, you get less of it.

Why? Because, despite what Elizabeth Warren might tell you, these fast food franchise owners have a finite amount of money to spend on operating expenses. They aren't making millions in profits, most of them, so when you come along and say, "Hey, your labor costs just doubled -- congratulations!" that business owner will have to make decisions.

It's not about what he wants to do, it's what he'll have to do.

And those decisions will likely start with the most obvious: hire less, fire more. If you do survive that first cut -- which, if you're skipping work to hold signs in the parking lot, I don't like your chances -- then you'll have to deal with greater expectations, more responsibilities and less room for error. In other words, at a minimum, you won't get away with treating your customers like dirt.

But after a while, as automation technologies become more and more ubiquitous, your employer will look for the first chance to replace you with a machine that can do the same thing more efficiently and for less money. It's not that he'll want to, necessarily, it's that he will have to, in order to stay in business.

You might be aware that "studies" exist "proving" the minimum wage increases employment and reduces poverty. But studies can prove anything you want them to prove, and in this case, most credible research indicates the opposite.

Extensive investigations have demonstrated a causal link between job loss and minimum wage hikes, and even the Congressional Budget Office says that a minimum wage of just over $10 an hour could cost half a million jobs.

Besides, what we're talking about here -- or what you're talking about -- is not an incremental hike, but a massive, sudden, dramatic, calamitous spike that upends the economy and, in one instant, makes low-skill fast food employment more profitable than dozens of other far more skilled, far more important types of jobs. None of these estimates, then, even come close to capturing the lunacy of a $15 an hour minimum wage.

Do you think it can happen in a vacuum? Do you think we can magically take a 17-year-old Wendy's employee, give him a salary commensurate with law enforcement officers and emergency medical workers, and everything will just continue along as normal?

No, these jobs have a value in the economy. You use the sledgehammer of government to flip the scales upside down like that, and you end up far into the land of Unintended Consequences. What would they be? Hard to know, exactly. I imagine, for one thing, given the "profit vs. effort required" calculation, we'll have more people becoming Subway sandwich artists and fewer people putting out fires, teaching children and building bridges.

That is, unless these other professions raise their incomes to compete, which they can't afford to do, so look for the inevitable mass firings to extend beyond the doors of your fast food establishment and out into virtually every other industry in the country. This is to say nothing of the hike in living expenses that will naturally follow when millions of people are given a huge collective raise overnight.

And all so that you could avoid working your way up the income ladder like everyone else had to do.

Speaking of which, lest you think your lack of a $15 per hour income puts you in some kind of Special Victim Category, I took an informal survey on Twitter this morning. I asked my followers when they finally earned $15 an hour, and what their profession was at the time. Here are some of the responses:

@MattWalshBlog I'm an airline pilot making notably less than that.
- Michael Pfeiffer (@FlyAuburn13) April 15, 2015

@MattWalshBlog project manager, I was in my late 20's. - Lisa (@WhoOlive) April 15, 2015

@MattWalshBlog Operations (project) Coordinator - 24 years old.
- Matt Ellis (@TheMattEllis) April 15, 2015

@MattWalshBlog I didn't earn $15/hour until I got my first job after earning a masters degree. I became an asst. program manager for an NGO. - Andrew Moser (@ClassicShmosby) April 15, 2015

@MattWalshBlog 8 yrs of work and/or school from 1st hourly job. It was as an electrical engineer after finishing my B.S.
- Jim Brewer (Hopps) (@JimBrewer) April 15, 2015

@MattWalshBlog I was 25 and started in the finance industry. Securities related. - Sarah Vest (@sarahk1237) April 15, 2015

@MattWalshBlog I just earned it in January. I'm a manufacturing compounder. I physically work on a level drive-thru people can't understand.
- Jordan Moorer (@jcmoorer) April 15, 2015

@MattWalshBlog in my mid-late 20's working at an entry level job at a mortgage firm. Such entitlement to want $15 an hr to flip a burger? - Amy Curtis (@4_oraetlabora) April 15, 2015

@MattWalshBlog Age 26 after becoming a Registered Dental Assistant and working for 3 years.
- Kelsey Peck (@kelspecks) April 15, 2015

These are people who had to undergo years of training and education to finally find a job that pays them what you want to make at McDonald's. So what are they -- suckers? What was the point? Why'd the do it? And why do you deserve to skip over the hard part -- the part where you make sacrifices and go hungry and do whatever it takes to make ends meet -- just to inherit by governmental decree what these people sweated for years to attain?

You don't. And that's OK.

The job you have right now isn't the point. It's a stop along the way, not the final destination.

Want to live comfortably? That's a fine goal. But it's just that: a goal. The government can't give you your goals on a silver platter. One way or another, you have to achieve them.

I know it's not easy, and know it's not particularly enjoyable to work for little money in a job you hate. I've done it. Your parents probably did it. A lot of people's parents did it, anyway. Millions and millions and millions of people have done it and are doing it. There's nothing special about your situation, which is something you should take comfort in.

So here's my suggestion: Put down the sign. Tuck in your shirt. Plaster a fake smile on your face. Go to work. Flip those burgers and work those cash registers like your life depends on it. Do it like it's your art, like it's your passion, like it's you're mission on Earth.

Take some pride in what you do, not because it's fast food, because it's what you do. Take on extra shifts if you can. Work holidays if you have to. Do whatever it takes. Whatever it takes.

I guarantee you won't be wearing that White Castle uniform forever. I know you don't want to, and you shouldn't want to. That's why you should stop trying to make this job comfortable, and start trying to make it an uncomfortable rung on a ladder to a better place.

Where is the ladder headed, exactly? Well, that's up to you.

And that's the whole fun of it.

You don't deserve $15 an hour to work a drive thru. But you might very well deserve significantly more to do something else.

Now figure out what that is, and go grab it.

Godspeed.

-
TheBlaze contributor channel supports an open discourse on a range of views. The opinions expressed in this channel are solely those of each individual author.

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Fast Food Workers: You Don't Deserve $15 an Hour to Flip Burgers, and That's OK

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Dear fast food workers, It's come to my attention that many of you, supposedly in 230 cities across the country, are walking out of your jobs today and protesting for $15 an hour.

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Introduction and key findings

Millions of Americans rely upon public assistance programs to help meet their basic needs. These programs provide a vital lifeline for individuals and families struggling to get by. Indeed, given rising costs of necessities such as child care, housing, and health care, many families' ability to achieve a modest but adequate standard of living requires resources earned on the job and assistance from government programs. 1

However, for many workers in certain sectors, wages are so low that even those who work full time must rely heavily on government assistance to make ends meet. This suggests that low pay by many employers-facilitated by weakened or inadequate labor standards, such as a low minimum wage and outdated overtime regulations-is placing unwarranted demands on public resources. As corporations achieve extraordinarily high profit levels and executive pay reaches new heights, it is appropriate to question whether employers are effectively passing off a portion of their societal responsibilities on to taxpayers.

This report examines the utilization of public assistance among low-wage workers and their families. After a brief review of previous research, it presents data on program participation and transfer income receipt by working individuals' annual hours of work, hourly wage level, major industry of employment, and state. Then it examines how higher wages among workers at various wage levels affect utilization rates and benefit dollars received. Finally, it discusses policies that would raise wages and the effect these policies would have on public assistance utilization and overall program spending. It concludes that higher hourly wages for low- and middle-wage workers, achievable through a variety of labor-market policies, would unambiguously generate savings in government safety-net and income-support programs-savings that could be used to strengthen and expand anti-poverty programs or make critical public investments to boost productivity and grow the economy.

Key findings include:

Most recipients of public assistance work or have a family member who works.

Among families or individuals receiving public assistance, the majority (66.6 percent) work or are in working families (families in which at least one adult in the household works). This number grows to 71.6 percent when focusing on non-elderly recipient families and individuals (those under age 65).

About 69.2 percent of all public assistance benefits received by non-elderly families or individuals go to those who work.

Nearly half (46.9 percent) of all working recipients of public assistance work full time (at least 1,990 hours per year).

Working recipients of public assistance are concentrated at the bottom of the wage scale and in low-paying industries.

Roughly 60 percent of all workers in the bottom decile of wage earners (those paid less than $7.42 per hour) receive some form of government-provided assistance, either directly or through a family member. Similarly, over half (52.6 percent) of workers in the second decile of wage earners (those paid between $7.42 and $9.91 per hour) receive public assistance.

Workers in the arts, entertainment, recreation, accommodation, food services, and retail trade industries are disproportionately represented among public assistance recipients. Workers in these industries receive even more disproportionate shares of program benefits, underscoring the particularly low wages in these industries.

Raising wages for low-wage workers (defined as those in the bottom three wage deciles, who earn up to $12.16 per hour) would unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.

Among workers in the bottom three wage deciles, every $1 increase in hourly wages reduces the likelihood of receiving means-tested public assistance by 3.1 percentage points. This means that the number of workers receiving public assistance could be reduced by 1 million people with a wage increase of just $1.17 an hour, on average, among the lowest-paid 30 percent of workers. These workers would see higher incomes, even as they no longer received public assistance.

For every $1 that wages rise among workers in the bottom three wage deciles, spending on government assistance programs falls by roughly $5.2 billion. This estimate is conservative, as it does not include the value of Medicaid benefits.

Raising the federal minimum wage to $12 per hour by 2020 would reduce means-tested public assistance spending by $17 billion annually. These savings could fund a variety of improvements to government anti-poverty tools, such as expanding the Earned Income Tax Credit (EITC) to childless adults, or provide funding for new education initiatives, such as improving access to preschool for children from low- and moderate-income families.

Background

The failure of regular, full-time employment to provide adequate levels of income is one of the many damaging consequences of the long-term stagnation of American workers' pay. Over the past generation, despite significant increases in labor productivity, inflation-adjusted hourly pay for the vast majority of American workers has either stagnated or declined. This is the result of deliberate policy choices that have reduced workers' ability to negotiate higher pay, and that have allowed capital owners and corporate managers to extract an increasing share of the income generated by American workers (Bivens et al. 2014). As a result, living standards for the typical American household have been largely unchanged since the late 1970s, with households working increased hours yet taking home little more in inflation-adjusted pay.

Persistent wage stagnation has also hamstrung efforts to reduce poverty, even as key elements of the tax-and-transfer system have expanded in recent decades. Since the early 1990s, policymakers have reformed and expanded some poverty alleviation programs, yet they have increasingly tied these programs to work. Unfortunately, at the same time, policy decisions made on behalf of those with the most income, power, and wealth have limited workers' ability to attain higher pay (Bivens et al. 2014). As a result of these policy choices-which are discussed in Mishel and Eisenbrey (2015)-expansions to post-tax aid programs have largely only offset the decline in pre-tax earnings (Gould, Davis, and Kimball 2015).

By preventing stronger wage growth, these policies have increased reliance on public assistance programs. Consider the policy decision to neglect the federal minimum wage: Infrequent and inadequate adjustments have left the minimum wage significantly below its inflation-adjusted peak in 1968. At that time, a full-time minimum-wage salary could keep a family of three out of poverty. Today, a full-time worker paid the federal minimum wage is not paid enough to keep a family of two out of poverty. Consequently, these families often depend on public assistance programs to make ends meet.

Review of previous literature

There is relatively little research into how increases in hourly wages among low-wage workers, typically through increases in minimum wages, affect government spending and participation in public assistance programs. While the minimum wage is one of the most studied topics in economics, this research has focused primarily on how minimum-wage policies affect employment; see Kuehn (2014), Schmitt (2013), or Belman and Wolfson (2014) for a summary. In recent years, some researchers have looked more closely at how increases in the minimum wage have affected family incomes and poverty rates. Dube (2013) provides an extensive survey of this literature and conducts his own analysis of Current Population Survey data. Consistent with most past research, he finds that increases in minimum wages significantly reduce poverty rates and increase family incomes, particularly for low-income families. He does not describe specific effects on income from non-wage sources, such as public assistance programs.

More recently, the Congressional Budget Office (CBO) examined the potential effects of a federal minimum-wage increase to $10.10 (CBO 2014). While there is some debate over the CBO's estimates of employment effects-see Bernstein (2014) or Shierholz and Cooper (2014)-CBO estimated that raising the federal minimum wage to $10.10 would increase family incomes of workers below the federal poverty line by $5 billion and lift incomes of workers between one and three times the poverty line by $12 billion. CBO predicts that such an increase would lift 900,000 people above the federal poverty line.

CBO notes that these increased earnings would result in higher tax revenue and reduced spending on certain means-tested federal assistance programs, although they do not detail the predicted effects upon individual programs. They also predict that the government would face some additional direct costs from increased wages to a small number of government employees, and possibly a small increase in purchasing costs of certain goods and services if producers raised prices in response to the wage hike. CBO predicts that federal expenses would initially go down, but could later increase if the higher minimum wage has a significant negative effect on employment. On net, they conclude that "it is unclear whether the effect for the coming decade as a whole would be a small increase or a small decrease in budget deficits." 2 It is important to note that the CBO's ambiguity on this point is driven by their atypically high estimates of the probability of significant employment loss stemming from such an increase. If employment loss is insignificant (as most research on a minimum-wage increase of this magnitude indicates), the budget savings would surely dominate.

Other researchers have attempted to quantify the anticipated savings to government transfer programs from changes in federal wage standards. Giannarelli, Morton, and Wheaton (2007) used a microsimulation model of all U.S. tax, transfer, and health programs to estimate the effects of a package of labor and anti-poverty policies, including raising the federal minimum wage from $5.15-its level in 2007-to $7.25. They estimated that such an increase would decrease transfer costs or raise federal revenues by the equivalent of $2.5 billion in 2014 dollars. They also simulated raising the minimum wage to half the average wage of production, nonsupervisory employees-at that time, equal to $8.40-and estimated it would reduce transfer costs or raise revenues by $14.8 billion in 2014 dollars.

Zabin, Dube, and Jacobs (2004) examined utilization of California's 10 major means-tested public assistance programs among working families. They found that more than half of the state's spending on public assistance goes to "working families," defined as families where at least one family member worked at least 45 weeks out of the year. Using a microsimulation approach, they estimated that if the state raised its minimum wage from $6.75-where it stood at that time-to $8 per hour (an 18.5 percent increase), state public assistance payments would fall by $2.7 billion ($3.3 billion in 2014 dollars).

More recently, a number of researchers have examined how low wages and the minimum wage interact with utilization of specific transfer programs or utilization in particular states or industries. West and Reich (2014a) look specifically at the effect of past minimum-wage increases on Supplemental Nutrition Assistance Program (SNAP) enrollments and expenditures. They use a regression framework that exploits state variation in minimum-wage levels over a 12-year period from 1990 to 2012 to measure how changing minimum-wage levels affected SNAP participation. They find that "a 10 percent increase in the minimum wage reduces SNAP enrollment by between 2.4 and 3.2 percent and reduces program expenditures by 1.9 percent." Based on these findings, they conclude that an increase in the federal minimum wage to $10.10 would reduce SNAP enrollments by up to 3.8 million persons, and decrease program expenditures by nearly $4.6 billion. Because both the proposed minimum-wage level and the SNAP eligibility level are indexed for inflation, these savings would total $46 billion over the 10-year budget window. 3

West and Reich (2014b) also consider how increasing the federal minimum wage would affect participation in Medicaid. In particular, they note that the availability of federal funding for states that expanded Medicaid through the Affordable Care Act (ACA) provides a unique opportunity for these states to generate budgetary savings by increasing the minimum wage. Under the traditional framework for Medicaid, states split Medicaid costs evenly with the federal government, but only individuals with very low levels of income could qualify. The ACA encourages states to expand eligibility for Medicaid to individuals with higher levels of income by initially providing 100 percent federal funding for these newly eligible participants, and 90 percent funding in later years. The authors explain that by raising minimum wages, the incomes of many Medicaid beneficiaries who previously qualified under traditional Medicaid will go up, pushing them into the range of expanded eligibility under the ACA. When this happens, states' responsibility for costs for these participants will shift almost exclusively to the federal government. West and Reich estimate that raising the federal minimum wage to $10.10 would effectively shift $2.5 billion per year from state to federal balance sheets.

Allegretto et al. (2013) looked specifically at receipt of public assistance among workers in the fast food industry. They found high rates of take-up among front-line fast food workers, with more than half of the families of such workers utilizing public assistance, compared with 25 percent of the workforce as a whole. While the authors do not attempt to simulate any effect on assistance payments from raising wages in the industry, they estimate that taxpayers spend $7 billion annually in public assistance programs for families of these low-paid workers.

Finally, Sawhill and Karpilow (2014) discuss how increasing the federal minimum wage to $10.10 could more than offset the cost of expanding the EITC to childless adult workers. The authors calculate that in the interaction between an expanded EITC and higher wages resulting from an increase to the federal minimum wage, the net effect would be increased tax revenues or reduced public assistance outlays of $1 billion. While they describe, in detail, the fiscal and social benefits that a tandem enactment of these policies would have, they do not elaborate on changes in participation rates or program benefit outlays for individual public assistance programs.

Incidence and value of government assistance benefits by annual hours of work, hourly wage decile, industry, and state

This report examines participation in eight federal and state means-tested programs for low-income families: EITC; the refundable portion of the Child Tax Credit (CTC); SNAP; the Low Income Home Energy Assistance Program (LIHEAP); the Supplemental Nutrition Program for Women, Infants, and Children (WIC); the Section 8 Housing Choice Voucher program; Medicaid; and the Temporary Assistance for Needy Families program (TANF) or equivalent state and local cash assistance programs. 4

For all of these programs, eligibility is restricted to individuals with low total family incomes, often some percentage of the federal poverty line. Certain programs have additional requirements, such as the presence of young children in the family, income below some percentage of the median rental cost in the person's region, or total family assets below a certain threshold. Most programs also are designed to "phase out" as family incomes rise-i.e., as a family's income increases, benefits levels decrease at some proportional rate-such that higher labor earnings still result in a net increase in total (labor and non-labor) income. Medicaid eligibility, however, terminates above a specific income threshold. 5

The EITC and CTC are slightly different. Qualifying beneficiaries of these wage-subsidizing tax credits will receive larger benefits as their wage income rises, up to a certain point. At that point, benefits plateau at a maximum amount for a set income range, and then begin to phase out beyond the maximum benefit range. Because of this structure, a low-income worker below the maximum benefit range could see her benefits increase as her wages went up, unless she experienced an income gain large enough to put her on the downslope of the phase-out range. 6

Before analyzing the use of public assistance by working individuals, it is important to recognize that the majority of means-tested government income support goes to working families-i.e., families with at least one working family member within the household. As explained in Gould, Davis, and Kimball (2015), for better or worse, public assistance programs have become increasingly tied to work. Table 1 shows participation in means-tested public assistance programs among elderly and non-elderly families and individuals, as well as participation by families' work status. The data show that 88.2 percent of families or individuals in non-family households who receive means-tested benefits are non-elderly families, and 93.4 percent of benefits (excluding Medicaid) go to non-elderly persons or families. 7 Among all families and individuals receiving benefits, two-thirds (66.6 percent) are either working or in working families. Focusing on non-elderly families and persons, 35.5 percent participate in at least one public assistance program. Importantly, the data show that nearly three-quarters (71.6 percent) of these participants are either working or in working families. Similarly, 69.2 percent of all public assistance benefits going to non-elderly families go to working families. (Note that the total benefits amount reported in subsequent tables is larger than reported in Table 1 because the subsequent analysis of working recipients includes elderly workers and those in elderly families.)

Utilization by annual hours of work

Inadequate levels of labor income can stem from both low hourly wages and a lack of adequate hours of work. Table 2 shows the receipt and value of benefits among workers and their families by annual hours of work. Workers are grouped by those working less than 1,000 hours per year, 1,000-1,499 hours per year, 1,500-1,989 hours per year, and 1,990 hours or more, with this final category constituting regular full-time employment. As the table shows, roughly two-thirds of all wage earners work annual hours that would constitute full-time, year-round employment. Among these workers, 21.9 percent receive some form of public assistance, either directly or through a family member. This is lower than the overall rate among all workers of 29.3 percent. In contrast, 46.6 percent of individuals working less than 1,000 hours per year receive some form of public assistance. Similarly, 42.9 percent of individuals working 1,000-1,499 hours per year (effectively "half time") receive some public assistance, as do 35.5 percent of individuals working 1,500-1,989 hours per year.

The distribution of beneficiaries also is informative. Individuals working less than 1,000 hours per year make up about 15 percent of all wage earners, although nearly one-fourth (23.7 percent) of workers who receive some form of public assistance, either directly or through a family member, fall into this group. Similarly, individuals working between 1,000 and 1,989 hours per year account for 22.0 percent of all workers, yet constitute 29.4 percent of all working public assistance beneficiaries. While it is not surprising that individuals with lower annual work hours are disproportionately represented among public assistance recipients, the share of working recipients who work full time is quite large, at 46.9 percent.

It is also illuminating to look at the distribution of beneficiaries across the various programs. Half of all working WIC and CTC beneficiaries work full time, as do 41.0 percent of working food stamp recipients and 38.0 percent of working Medicaid beneficiaries. The table also shows the distribution of program dollars by annual hours of work. Most of the benefit dollars are spread in roughly equal proportion to the share of beneficiaries in each work hour category, although EITC and CTC benefits predictably skew more heavily toward those working more hours.

It is worth noting that because of the structure of the data, with each individual record carrying the family's total benefit information, it is possible that some of the work hour statistics reflect the work hours of family members who do not directly receive support from the applicable program. (See Appendix A for further detail.) The extent to which this biases the results is unclear. Nevertheless, the large shares of individuals working full time whose families participate in these programs underscores the question of whether these programs are serving more as temporary support during times of financial stress-the original intent of many of these programs-or whether they have become permanent wage subsidies for workers paid unlivable wages.

Utilization by hourly wage level

Figure A shows the share of all wage earners within each hourly wage decile whose families receive public assistance. 8 As the figure shows, an estimated 29.3 percent of all wage earners receive benefits from at least one of the means-tested public assistance programs included in this study, either directly or through a family member in the household. Roughly 60 percent of all workers with hourly wages in the bottom decile (less than $7.42 per hour) receive benefits or have a family member receiving benefits-more than double the overall rate of receipt. Among workers in the second decile (whose hourly wages are between $7.42 and $9.91 per hour), just over half (52.6 percent) receive benefits either directly or through a family member. As expected, the rates of receipt decline steadily as hourly wages increase. ( Appendix Table B2 shows all data on program utilization and benefit amounts by wage decile.)

It is somewhat surprising that any workers with high hourly wages would show any receipt of public assistance. This is likely the result of the structure of the CPS-ASEC data, in which some households may contain both low-income/low-wage and higher-income/higher-wage tax units in the same family, such as a young adult living with his parents. In such cases, the data would show a higher-wage individual benefiting from the public assistance dollars of her low-wage family member when, in reality, the incomes of those individuals may be separate. In addition, some individuals who work only a small portion of the year may report relatively large wage income for those limited annual hours of work, resulting in an imputed hourly wage that is artificially high.

Nevertheless, even with these potential sources of error, the data still show that high-wage earners comprise a small share of working benefit recipients. As shown in Figure B, of all wage earners in families receiving public assistance, 77.8 percent have wages in the bottom half of the wage distribution. More than half (54.4 percent) have wages in the bottom 30 percent, and roughly 40 percent are in the bottom fifth of hourly wage earners.

Figure C shows the total value of public assistance benefits received by workers, either directly or through a family member, by the worker's hourly wage decile. Once again, the bulk of benefit dollars are going to workers with the lowest wages. Workers with wages in the bottom decile receive over $28 billion in benefits, while workers in the second decile-between the 10th and 20th percentiles-receive nearly $29 billion in benefits. 9 The percentages below each dollar figure are each decile's share of all benefit dollars received by workers and their families. Combining the bottom and second deciles, workers in the bottom fifth of the wage distribution-earning hourly wages of $9.91 or less-receive just less than half (46.4 percent) of all public assistance dollars accruing to workers and their families. Fully 86.8 percent of all public assistance benefits going to working families go to workers with hourly wages in the bottom half of the wage distribution.

Utilization by industry

While there are workers who benefit from public assistance across all major industry groups, some industries have much greater numbers of workers receiving benefits and much higher rates of receipt. In Figure D, the green bar shows again that just over 29 percent of all workers have families receiving means-tested benefits. As the figure shows, workers in agriculture, forestry, fishing, and hunting have an exceptionally high rate of receipt: Half receive public assistance, either directly or through a family member. Workers in the arts, entertainment, recreation, accommodation, and food services industries have take-up rates of roughly 45 percent. 10 Retail trade, construction, the armed forces, and other services except public administration all show rates of receipt above the overall average of 29.3 percent. Workers in public administration have the lowest rate of utilization, with only 16.1 percent of workers receiving benefits.

Whereas Figure D showed rates of receipt within industries, Figure E shows the distribution of all wage earners receiving benefits across industries. The industry with the largest share of workers receiving benefits (either directly or through a family member) is educational, health, and social services, at 19.9 percent. However, this is also the largest industry category by far, containing roughly one-quarter (23.6 percent) of all wage earners in the sample-thus, their share of benefit recipients is actually disproportionately low. In contrast, retail trade combined with the arts, entertainment, recreation, accommodation, and food service industries contain almost one-third (30.5 percent) of all working public assistance recipients, despite accounting for just over one-fifth (21.9 percent) of the total workforce. ( Appendix Table B3 contains detailed breakdowns of program participation and employment shares by industry.)

Figure F shows the total value and share of public assistance dollars received by families of working individuals by the major industry employing each worker. Once again, the largest portion of benefit dollars goes to families of workers in education, health, and social services. Workers or families of workers in these industries receive nearly $25 billion in public assistance, or 20.3 percent of all benefit dollars received by workers in the sample. However, this is a smaller percentage than their 23.6 percent share of the workforce. The two major industry groups with disproportionately large shares of workers receiving benefits-retail trade, and the arts, entertainment, recreation, accommodation, and food service industries-also receive a disproportionately large 32.1 percent share of all benefit dollars going to workers (equal to roughly $39.5 billion). Note also that this share of benefit dollars exceeds these industries' share of recipients (30.5 percent), an indication that wages and incomes for workers in these industries are particularly low.

Utilization by state

Unsurprisingly, the states with the largest shares of the country's program beneficiaries are the most populous states: California, Texas, New York, Florida, and Illinois. However, as depicted in Figure G, the states with the highest rates of public assistance usage are primarily those in the South and Southwest: New Mexico, Mississippi, Arkansas, Arizona, and Louisiana. Southern states, in particular, tend to have lower wages and higher poverty rates (Cooper 2015b; BLS 2014). Accordingly, they receive disproportionate shares of public assistance dollars. For example, as shown in Appendix Table B4, Georgia accounts for 3.0 percent of U.S. workers, yet the state's workers receive 3.6 percent of all public assistance dollars going to workers. Similarly, Louisiana has 1.3 percent of the U.S. workforce and receives 1.9 percent of public assistance dollars going to workers. Mississippi contains 0.8 percent of the total working population, yet receives 1.4 percent of benefit dollars going to workers. These differences are not enormous, due in part to the fact that hourly wages have converged across the states over the past four decades. 11 Nevertheless, they do underscore the relationship between low hourly pay and greater reliance on public assistance. Moreover, because these figures only describe benefit dollars going to workers, they almost certainly understate the disproportionate share of all public assistance going to working and nonworking families in these states, as many of them also have lower overall rates of employment than those states with lower rates of public assistance receipt among workers. 12

How higher wages would affect public assistance programs

This section examines how changes in hourly wages affect the participation rates and value of benefits received from means-tested public assistance programs. The analysis uses linear regression to isolate how receipt of public assistance by workers at one hourly wage compares with receipt by similar workers at different hourly wages. Because most programs have income restrictions, as hourly wages rise, program participation and costs generally decline. However, because some refundable tax credits-such as the Earned Income Tax Credit-are designed so that benefits increase, up to a point, as labor income rises, it is not theoretically obvious that increasing wages among all low-income workers would necessarily lead to a net reduction in overall public assistance spending.

Effects on the likelihood of receiving benefits

Table 3 summarizes the results of this analysis. 13 Each column indicates the wage range these results describe; each row indicates the relevant public assistance program. The upper block of results shows how a $1 increase in hourly wages among workers in each wage range affects the likelihood that they (or their families) participate in the specified program.

The results in the first column, which describe workers in the bottom two deciles (with hourly wages up to $9.91), indicate that a $1 increase in hourly wages for a worker in this range reduces the likelihood that she receives any public assistance by 3.8 percentage points. This means that if this entire group of workers received, on average, a $1 per hour raise, we would expect the share of this group needing to rely on public assistance to decline by 3.8 percentage points. With 15.5 million workers in this wage range, that translates to roughly 600,000 fewer people receiving benefits.

For each individual program, including the EITC, increasing hourly wages is expected to reduce the rate of program participation. Among those in the bottom two deciles, the magnitude of these effects ranges from a reduction of around 0.1 percentage points in the share receiving benefits from WIC or TANF to a reduction of 4.1 percentage points in the share receiving the EITC. 14 For SNAP, a $1 increase in hourly wages reduces the participation rate by 2.0 percentage points; for Medicaid, 1.3 percentage points; for LIHEAP, 0.4 percentage points; and for housing assistance, 0.3 percentage points. It is not surprising that the effects for TANF, WIC, housing assistance, and Medicaid are substantially smaller than the effect for the EITC-and to a lesser extent SNAP-simply because the share of workers participating in each of these programs is considerably smaller. As expected, the largest impact for workers in this range is on the EITC, since the EITC has the highest rate of program participation for this group (about 60 percent) and overall (roughly 29 percent).

The second column describes a broader range of workers-those earning wages in the bottom three deciles, or up to $12.16 per hour. As the sample of workers expands to include those earning higher wages, the overall rate of program participation declines because, on average, higher wages lead to higher family incomes and reduced program eligibility. This, in turn, leads to an average effect that is smaller for this larger group than for the first two wage deciles. Yet because the pool of workers has expanded, a $1 average increase in wages for this larger group would still lead to a larger reduction in the number of people receiving public assistance. For every $1 increase in hourly wages for the roughly 27.5 million workers earning up to $12.16 an hour, the share relying on public assistance is predicted to decline by 3.1 percentage points, or approximately 850,000 people. An equivalent way to interpret these results is that the number of low-wage workers relying on public assistance could be reduced by 1 million people with a wage increase of $1.17 an hour, on average, among the lowest-paid 30 percent of workers.

Similar calculations can be made for the third column, which expands the sample of wage earners to include those in the fourth decile, who earn up to $14.72 per hour. Using the results for this group, a $1 average increase in hourly wages would reduce the share receiving means-tested benefits by about 2.5 percentage points. When multiplied by the 40.7 million workers in this range, this means just over 1 million fewer workers would receive benefits.

The fourth and fifth columns in the table are slightly different. Rather than describing effects at hourly wages up from the bottom of the distribution, they describe effects limited to the third and fourth, and fourth and fifth, deciles of the wage distribution, respectively. In limiting the pool of workers to these groups, the results generally show how at higher hourly wage rates, the anticipated reduction in program utilization from raising wages becomes smaller, simply because a smaller share of workers in these wage ranges receive benefits. The one noticeable exception, however, is participation in the refundable Child Tax Credit. It is likely that the higher observed effects for this group result from the unique way the CTC is structured. Although the Child Tax Credit is available for families earning high annual incomes, it appears that in these hourly wage ranges, workers' tax liabilities, on average, are becoming large enough to more significantly reduce their likelihood of receiving the refundable portion of the credit. In other words, though these workers may still be taking the Child Tax Credit against the taxes they owe, at these wages they may start to owe more in taxes than the maximum value of the credit. 15

The results in column four (workers with hourly wages between $12.16 and $14.72) and column five (wages between $14.72 and $17.62) are similar. As expected, the decline in the likelihood of receiving any benefits is smaller for the higher wage group because a smaller share of this group receives benefits. Among individual programs, the expected reduction in benefit receipt is noticeably smaller for SNAP, meaning that higher wages for workers in this range of the wage distribution are not going to have the same magnitude of effect as they would for raising wages among lower-paid workers. Similar, albeit smaller, reductions in magnitude are evident for Medicaid and housing assistance. Among the other programs-the EITC, CTC, WIC, and TANF-the effects are not meaningfully different between workers in the third and fourth deciles (column 4) and those in the fourth and fifth deciles (column 5).

Effects on program spending

The lower block of results in Table 3 shows the predicted effect from a $1 increase in hourly wages on the annual value of benefits received by workers in each wage range. Again looking at the first column, the results indicate that for each additional dollar in hourly wages paid to workers earning up to $9.91 per hour, total benefit dollars received from all public assistance programs decline by $199 per worker annually, on average. This means that if the 15.5 million workers with wages in this range received, on average, a $1 increase in hourly pay, total means-tested government benefit expenditures would decline by about $3.1 billion annually.

For the bottom two deciles, the predicted change in benefit dollars is negative for all programs, although the effects are not statistically distinguishable from zero for the refundable Child Tax Credit (CTC) and TANF. 16 The estimated effects are largest for SNAP, with each dollar increase in hourly wages resulting in a $93 decline in annual benefits per worker. Extrapolating this effect to the full population of workers in this wage range, a $1 average raise for these workers would reduce annual SNAP expenditures by $1.45 billion. 17 The predicted per person effects for the other programs are an average annual decline of about $76 for the EITC, $14 for housing assistance, $8 for TANF, $4 for WIC, $2 for LIHEAP, and $2 for the CTC.

Note that the sample for these calculations includes workers who do not receive any benefits from these programs. Including these non-participating individuals-recorded as receiving zero benefits for the relevant program-makes the results considerably smaller than they would be if the analysis were restricted to only those receiving benefits from each program. This is why the values for CTC, LIHEAP, TANF, and WIC are so small; the share of all wage earners in the bottom two deciles receiving benefits from these programs is quite low, meaning that the average effect among all workers in this range (the majority of whom receive no benefits from these programs) is necessarily going to be small. Excluding the zero values from the sample would more accurately describe how wage increases affect individual benefit amounts among beneficiaries, but that is a different question from what is being explored here. This report's focus is on the average effect raising wages would have on aggregate program spending, which requires accounting for those for whom there is no effect.

As with the results for program participation, when the group of workers in the sample expands to include those in the bottom three deciles (with hourly wages up to $12.16), the average effect on benefit amounts shrinks for most programs, with the exception of TANF, the EITC, and the CTC. As far as the tax credits are concerned, this result is consistent with the structure of these credits, wherein higher earned income results in a larger benefit amount, up to a maximum benefit, which is then gradually reduced after workers and their families reach higher income levels. The fact that expanding the pool of wage ranges in the sample increases the magnitude of the effect on EITC and CTC benefits indicates that even though some workers in this group may be getting larger EITC and CTC credits from higher wages, most have maxed out their benefits, and some are likely on the downslope of the benefit curve. The results indicate that for every $1 average increase in hourly wages for the 27.5 million workers earning up to $12.16 per hour, we should expect a decline in EITC expenditures of roughly $80 per person annually, or $2.2 billion overall. Such a pay raise for workers in the bottom three deciles would reduce total annual expenditures on all means-tested programs included in this study by $189 per worker, or roughly $5.2 billion overall.

The differences in the effect of higher wages on benefit amounts shown in the fourth and fifth columns-where wages are limited to the third, fourth, and fifth deciles-are similar to the differences in effects on program participation. Workers in these higher wage ranges are generally less likely to participate in most of these programs, thus there are more observations with a zero value. Consequently, the average effect for all workers in these wage ranges is smaller. The EITC and CTC are again the exceptions; workers in these higher wage ranges who are still receiving benefits from these programs are more likely to be on the downslope of the benefit curve-i.e., they are either receiving the maximum benefit amount, or have begun to see their benefits reduced due to their higher incomes. That effects for these programs among workers in the fourth and fifth wage deciles are only slightly larger than effects for workers in the third and fourth deciles reflects that benefits in these programs are reduced at a constant rate.

Excluding the value of Medicaid understates true aggregate program savings

All of these estimates of total means-tested public assistance outlays are conservative, as they do not include the fungible value of Medicaid. Because of the expansion to Medicaid enacted in the Affordable Care Act (ACA), it is more difficult to estimate how raising wages for the workers in this study would change overall Medicaid spending. As West and Reich (2014b) explain, for states that expanded Medicaid, higher wages among low-wage workers could lead to many traditional Medicaid beneficiaries moving into the expanded eligibility range where benefit costs are covered almost exclusively by the federal government. Similarly, workers in these states that moved entirely out of even the expanded Medicaid eligibility range would still likely qualify for subsidized health insurance premiums on the ACA's insurance exchange. In both cases, the result would be a shifting of costs from state budgets to the federal one.

However, in states that did not expand eligibility, and for workers moving off expanded eligibility and on to the health exchange in states that did, total public healthcare outlays from Medicaid or subsidized insurance premiums would certainly decline, and potentially by a lot. Young et al. (2015) at the Kaiser Family Foundation estimates that average Medicaid spending per enrollee in fiscal 2011 (the most recent available data year) was $5,790. Per-enrollee spending varies greatly across states and for different groups, but as a purely back-of-the-envelope calculation, consider the predicted effects from Table 3 on Medicaid enrollment for workers earning up through the third wage decile. The results indicate that if these 27.5 million workers received an average $1 increase in hourly wages, just over 1 percent-roughly 275,000 workers-would no longer use Medicaid. At a per-enrollee cost of $5,790, that translates to just less than $1.6 billion in savings. Again, these results do not account for state variation in costs, expansions to Medicaid, or healthcare exchange premium subsidies, but they do suggest considerable Medicaid savings are possible for state budgets, if not for the federal budget.

Still, even with these larger effects for the EITC and CTC, the aggregate effect on all means-tested programs is smaller among workers in these higher wage ranges than it is for lower-paid workers. A $1 average increase in hourly pay for workers in the fourth and fifth deciles (column five) is expected to reduce annual means-tested program expenditures by $155 per person, roughly three-fourths the magnitude of effect for workers in the bottom two deciles (column one).

Policy implications

Despite the relatively small average effects for individual programs, it is clear that broadly increasing wages among low-wage workers would lead to sizable declines in aggregate public assistance spending. For example, if a randomly selected 10 million workers with wages in the bottom four deciles-just less than a quarter of the 40.7 million workers earning up to $14.72 per hour-received a $1 increase in their hourly pay, 250,000 fewer workers would receive benefits, and annual public assistance outlays would fall by about $1.8 billion. If more workers received a pay raise or the wage increase were larger, the expected savings would be bigger. The exact mechanism used to spur higher wages-be it active policy interventions or market forces-could influence the particular subgroup of workers that would be affected, which could change the magnitude of the effects. Predictably, higher wages among the lowest-paid workers would produce the largest program savings. Yet even among more moderate-wage workers, lifting wages reduces the likelihood that a worker relies on public assistance, and is likely to free program dollars that could then be repurposed in any number of ways-including directing them to the neediest workers and families.

One obvious way to raise wages for low-wage workers is to increase the minimum wage at the federal and state levels. As explained in Cooper, Schmitt, and Mishel (2015), the federal minimum wage is far below historical levels according to every relevant benchmark. Raising the federal wage floor would provide a long-overdue boost to the pay of millions of working Americans and reduce the implicit subsidy that taxpayers are giving to employers who pay inadequately low wages. Conveniently, the 30th percentile wage cutoff discussed in this report aligns reasonably well with the minimum-wage level proposed in the Fair Minimum Wage Act of 2015, which would raise the federal minimum wage to $12 by 2020. 18 As discussed previously, among workers earning less than $12.16 per hour, every $1 increase in hourly wages is predicted to reduce the share of workers relying on public assistance by 3.1 percentage points, and provide average annual savings to government programs of $190 per worker. Cooper (2015a) estimates that increasing the federal minimum wage to $12 by 2020 would directly raise the wages of 28 million workers, giving affected workers an average pay increase of $3.16 per hour. Multiplying this average raise by the total number of affected workers and the measured effects in the second column of Table 3 indicates that such a raise would reduce the number of Americans relying on public assistance by 2.7 million workers. The estimates on benefit amounts indicate that raising the minimum wage to $12 by 2020 would generate $17 billion in annual savings to means-tested government assistance programs. Again, this savings estimate is conservative because it does not include savings from Medicaid, nor does it account for workers earning wages above the $12 minimum wage who might also get a raise as employers adjusted overall pay scales.

Whatever the mechanism used to achieve higher wages, the potential for substantial savings to government assistance programs should motivate policymakers in both parties to prioritize raising wages for low-wage workers. In fiscal 2014, the seven programs studied in this report distributed roughly $190 billion in benefits to workers and families needing help to get by. 19 Thus, annual savings of $17 billion, as predicted from a $12 minimum wage, would equal about 9 percent of total benefit outlays. Clearly, raising the minimum wage would not eliminate the need for these programs, nor would it dramatically change their combined overall cost. Yet $17 billion in annual savings is more than enough to significantly improve or expand upon existing assistance programs or fund new tools amplifying government's capacity to improve people's lives. For example, both the president and congressional leaders have proposed expanding the EITC to provide greater benefits to childless adult workers, who currently are largely excluded from the program. 20 The president's proposal is estimated to cost roughly $6 billion a year. If enacted in tandem with a minimum-wage increase, the cost would be somewhat higher because some workers would receive larger benefits from their higher wages, yet it would still be well below the savings in other programs resulting from the higher wage floor. 21

There are numerous other ways such savings could strengthen the safety net, fund new priorities, or make job-creating investments. Savings of $17 billion are enough to double housing assistance benefits-either increasing benefits to current recipients or expanding eligibility. It is enough to triple TANF benefits or quadruple WIC or LIHEAP benefits. It is enough to fund new education proposals from the president's budget, such as the "Preschool for All" initiative that would provide 4-year-olds in low- and moderate-income families with access to preschool, or the federal component of the president's proposal for tuition-free community college (OMB 2015a; OMB 2015b). By raising the minimum wage to $12 by 2020, Congress could generate the funding required to support these worthwhile programs, and potentially still have savings left over.

Conclusion

Raising wages among low- and middle-wage workers would simultaneously lift incomes and reduce spending on public assistance programs. The government could then use these savings to bolster anti-poverty efforts or make new job-creating investments. Increasing the federal minimum wage is one simple way this could be achieved-though it is not the only way. As explained in EPI's Agenda to Raise America's Pay, we can raise wages by eliminating the lower subminimum wage for tipped workers, updating overtime protections, strengthening workers' ability to organize and negotiate with employers collectively, improving enforcement of labor laws, providing undocumented immigrant workers a path to citizenship, and ensuring monetary policy prioritizes full employment. These policies would help undo decades of wage stagnation that have prevented greater improvement in living standards for the vast majority of American households. They would also bring greater balance to the roles that the private and public sectors play in improving American workers' quality of life.
- This research is supported by contributions from The Nick and Leslie Hanauer Foundation.
About the author

David Cooper is an economic analyst with the Economic Policy Institute. He conducts national and state-level research on a variety of issues, including the minimum wage, employment and unemployment, poverty, and wage and income trends. He also provides support to the Economic Analysis and Research Network (EARN) on data-related inquiries and quantitative analyses. David has been interviewed and cited by numerous local and national media for his research on the minimum wage, poverty, and U.S. economic trends. He holds a Master of Public Policy degree from Georgetown University.

Appendix A: Methodology and data sources

This study uses three years of microdata from the Current Population Survey Annual Social and Economic Supplement (CPS-ASEC), describing respondents' economic conditions in calendar years 2012-2014. The CPS is the monthly survey used by the Census Bureau to track a variety of labor market indicators, including the unemployment rate. The ASEC is a set of additional questions asked each March about respondents' economic status in the preceding year. It is used to calculate the government's official measures of family income, assess sources of income, and determine poverty rates.

In addition to the ASEC data, this paper also incorporates microdata from the Census Bureau's Supplemental Poverty Measure (SPM) public-use research files. The SPM is an alternative poverty measure developed by the Census Bureau that takes a more holistic appraisal of both family income sources and family expenses. The CPS-ASEC files contain information on most earned and some unearned income. The SPM data adds information on several means-tested public assistance programs, such as income from the Earned Income Tax Credit (EITC), the refundable portion of the Child Tax Credit (CTC), the Low-Income Home Energy Assistance Program (LIHEAP), and the Supplementary Nutrition Program for Women, Infants, and Children (WIC).

While the CPS-ASEC and SPM data provide excellent information on annual incomes-including income from wages-the survey's focus on annual income creates challenges for assessing how increases to hourly wages might affect public assistance levels. Low annual incomes could be the result of low hourly wages, inadequate annual hours of work, or some combination of the two. While a thorough examination of these influences is beyond the scope of this paper, this issue is discussed in Appendix C.

The hourly wage information used in this report is developed as follows: The CPS-ASEC survey asks respondents to describe their annual income and sources of income over the preceding year. Respondents also report the number of weeks they worked during that year, and the usual number of hours they worked in the weeks that they worked. With these three pieces of information, one can impute each individual's implied hourly wage for the time they were working.

Admittedly, these implied hourly wages from the ASEC data are less robust than other sources of hourly wage information, such as the wage data from the Current Population Survey Outgoing Rotation Group. As Giannarelli, Morton, and Wheaton (2007) note, imputing hourly wages compounds measurement error from the three variables used in the imputation process, and can produce hourly wage values that fall below the statutory minimum wage of $7.25. However, as explained in Appendix C, these implied subminimum values, while certainly the product of error in many cases, may be indicative of troubling labor practices in others-and may even be accurate in others still. In any case, the ASEC data is one of the only public datasets with information on income from means-tested public assistance programs, and while not ideal, the imputed hourly wages provide adequate measures with which to assess utilization of these programs by relative levels of imputed hourly wages.

Another potential source of error comes from the fact that in the CPS data, receipt of income from public assistance is recorded as the total income received by all members of the family-meaning that each individual observation carries the family's total income from public assistance. In order to assess the relationship between individual hourly wages and public benefit receipt, in this analysis, for families with multiple workers, income from public assistance programs is divided evenly among all workers. In a limited number of cases, this may create instances where the data report benefits received by individuals of the same family, when in actuality the individuals are separate tax units-such as adult siblings living together-where one of the respondents is not actually receiving benefits. Nevertheless, these are likely a small number of cases, and even in such cases, some portion of income may still be shared across tax units.

Finally, it is well known that the CPS-ASEC data significantly understate actual participation in, and income received from, public assistance programs. See Wheaton (n.d.) or Meyer, Mok, and Sullivan (2009) for details. Consequently, the CPS-ASEC data in this report have been adjusted to be consistent with administrative data that show actual program enrollment and expenditures for all programs except LIHEAP. 22 The adjustments are made using the same method of reweighting recipient observations, non-recipient observations, and reported benefit amounts as in Zabin, Dube, and Jacobs (2004) and Allegretto et al. (2013). Still, because of changes in Medicaid resulting from the Affordable Care Act, data from the period in this study may not have good predictive value in estimating effects on the value of Medicaid benefits. For this reason, the fungible value of Medicaid benefits is not included in any calculations throughout this study. Consequently, these results understate the true total public costs of public assistance received by workers and their families.

The sample for the descriptive statistics and regression analysis consists of the three years of CPS-ASEC data from March 2013, 2014, and 2015, reflecting respondents' economic conditions from 2012 to 2014. The sample is restricted to individuals age 16 and older who worked for some portion of the year, and for whom a valid hourly wage value can be determined.

The regression analysis uses two sets of regressions for each subsample of wage earners. One set of regressions has binary dependent variables indicating whether the respondent or a family member in the household reported participation in, or positive income from, any of the eight public assistance programs under study. In the second set, the dependent variables are the total dollar value-in level terms-of benefits received from each program, and the sum of all benefits from all programs. For both sets of regressions, the explanatory variable of interest is the coefficient on real hourly wages. Models were also estimated for total benefits, the EITC, and the CTC containing real hourly wages in quadratic form in order to capture likely changes in the direction of the effect. These results are discussed in the text, and a full listing of these results is available upon request. All models employ a standard set of demographic controls (age, age-squared, age-cubed, gender, race, citizenship, marital status, and metropolitan status), as well as controls for industry, major occupation group, state, family size, number of children in the family, the number of wage earners in the family, whether the individual worked part time at any point during the year, and the presence of any disabled persons in the household.

Appendix B: Additional tables and figures

Appendix C: Discussion of imputed subminimum hourly wage values in the CPS-ASEC

For the vast majority of observations within the ASEC sample, imputing an hourly wage from the respondent's reported annual wage income, weeks worked per year, and usual hours worked per week yields a plausible hourly wage value. However, for a small but not insignificant portion of the sample-9.9 percent-imputed wage values fall below the federally mandated minimum wage of $7.25 per hour. Some of these values fall below the wage floor almost certainly due to measurement error compounded by the imputation process. It is understandably difficult for some individuals to recount accurately their total wage income and total time in the workforce for a 12-month period three months removed-especially if they changed jobs, worked only a portion of the year, or worked inconsistent hours.

Appendix Figure CA shows the distribution of all imputed wage values below the federal minimum wage (hereafter referred to as "subminimum wage values") and the distribution of all imputed wage values, both as shares of their respective totals, by respondents' reported usual hours worked per week. The distribution shows that subminimum wage values disproportionately occur among individuals who worked less than 35 hours per week. Appendix Figures CB1 and CB2 show the distribution of subminimum wage values and total wage values by respondents' reported weeks worked in the previous year. As expected, subminimum wage values disproportionately appear among part-year workers.

The Census Bureau takes steps to validate responses, and reduce potentially invalid data, but unfortunately, the low-wage labor market is prone to characteristics that can aggravate measurement error: Turnover is high, work is more likely to be seasonal or part time, and many low-wage jobs suffer from inconsistent hours (CBO 2006). This means that workers whose actual hourly wage was above yet close to the minimum wage may be particularly prone to err in their reporting of any of the three data points needed to impute hourly wages.

Given these challenges, some researchers have been wary of using these implied hourly wages (see Giannarelli, Morton, and Wheaton 2007). Yet rather than simply dismissing these questionable values outright, a more thorough examination suggests that perhaps not all these subminimum wage values are the result of measurement error. In fact, some may be indicative of significant gaps in legal protections, and troubling real-world labor practices.

For example, certain groups of workers are exempt from the minimum-wage provisions of the Fair Labor Standards Act (FLSA), such as farmworkers on small farms, employees of some seasonal and recreational establishments, fishermen, newspaper delivery workers, and anyone employed by a business with less than $500,000 in annual revenue that does not engage in interstate commerce (U.S. Department of Labor 2014). For workers that fall into these categories, their low imputed hourly wage values may be entirely correct and legal.

For others, however, implied hourly wages below the minimum wage may indicate greater incidence of wage theft. As explained in Meixell and Eisenbrey (2014), wage theft-the practice of employers not paying workers the full wages that they are owed-is a significant problem, particularly in low-wage jobs, that costs American workers hundreds of millions, if not billions, of dollars each year. 23

Appendix Tables C1 and C2 show the occupations with the highest shares and highest incidence, respectively, of subminimum imputed wage values. Bolded occupations are those that appear in both tables. Many of the listed jobs represent the lowest-paying jobs in the economy, and indeed, several occupations that appear in this list may not be covered by the FLSA or other federal labor and employment laws, such as home health aides, personal and home care aides, and agricultural workers. 24

Several other listed occupations are occupations where workers customarily receive tips as a portion of their wages: waiters and waitresses; counter attendants, cafeteria, food concession, and coffee shop workers; non-restaurant food servers; bartenders; bartender helpers; and hairdressers, hairstylists, and cosmetologists. Allegretto and Cooper (2014) explain how problems of wage theft and workers receiving wages below the prevailing minimum wage are particularly acute among tipped workers due to "tip credit" provisions in minimum-wage laws that allow employers of tipped workers to pay them a base wage as low as $2.13 per hour. While these employers are legally required to make up any shortfalls between the effective hourly rate earned by tipped workers from their tips and the prevailing minimum wage, enforcement of this requirement is highly problematic, and there is evidence of considerable abuse. Indeed, these data suggest that when workers in these occupations are asked to tally their total annual earnings, weeks of work, and usual hours, a high percentage report figures that imply hourly pay below the minimum wage.

Finally, immigrants comprise many of the workers in these occupations. In fact, of the 15 occupations most commonly held by immigrants, 10 appear in Appendix Table C2: cooks; housekeepers, maids, and butlers; nursing aides; janitors; truck, delivery, and tractor drivers; construction laborers; cashiers; gardeners and groundskeepers; retail sales clerks; and farm workers. 25 Some of these immigrant workers may be undocumented, while others may be working on temporary work visas that restrict their ability to change jobs-both scenarios that can leave these workers powerless against exploitive employers. Such practices are damaging not just for the immigrants themselves, but for all other workers (immigrant and non-immigrant) in the same occupations. Any time an employer can exploit certain groups of workers and pay wages lower than would otherwise be possible, it places downward pressure on the wages of other workers with the same jobs. For this reason, the high prevalence of subminimum wages in occupations common to immigrants need not be instances of wage theft solely among immigrant workers.

Appendix Tables C3 and C4 examine the prevalence of subminimum-wage values by industry, showing the industries with the highest share and highest incidence, respectively, of wage values below the federal minimum. Once again, bolded industries are those that appear in both tables. As with the distribution by occupation, one can surmise plausible reasons for why workers in many of these industries may be underpaid for the total hours they worked in a given year, thus bringing their implied hourly wage below the federal minimum. Subminimum wages could be the result of unscrupulous employers or gaps in labor protections. For example, restaurants again appear prominently in both lists, which is expected given the high incidence of subminimum values for waiters and waitresses, cooks, and other food service occupations. Workers in recreational parks and camps (e.g., campgrounds) have the highest rate of imputed subminimum values, likely because many such facilities are seasonal and not covered by the FLSA. Similarly, some workers in animal production facilities, crop production facilities, and home health care services industries also lack FLSA protections. Workers in private households also show high incidence of subminimum imputed wage values, which could be the result of informal or "under the table" arrangements, which Shierholz (2013) notes leave workers particularly vulnerable to violations of labor standards. Finally, as with the top occupations with the highest incidence of subminimum-wage values, many of these industries are also disproportionately staffed by immigrants, some of whom may be vulnerable to exploitation due to their immigration status.

To be clear, these data cannot and should not be viewed as conclusive evidence of wage theft or labor abuses in any particular occupation or industry. However, the high prevalence of what should, in many cases, be impossibly low imputed wage values should raise questions about how workers are being paid and the hours they are expected to work in many of these jobs.

To the extent that these subminimum-wage values represent instances of wage theft or gaps in labor standards, better enforcement of labor law or expansions in coverage to workers either outright excluded from the FLSA (such as seasonal farm workers) or treated as a separate class of workers (such as tipped workers) would yield additional public savings.

Appendix Table C5 shows rates of receipt and the total value of benefits paid out to workers with imputed hourly wages below $7.25. Among these workers, 59.8 percent report receiving some form of public assistance, with total benefits from all programs totaling nearly $29 billion. Again, the program with the highest participation rate is the EITC-60.4 percent of workers in this wage range receive roughly $12.8 billion in benefits. Participation in SNAP is also common, with 26.2 percent of workers in this group receiving $12.1 billion in benefits. Participation rates for the other programs are 21.0 percent for Medicaid, 3.7 percent for WIC, 4.3 percent for LIHEAP, 4.4 percent for housing assistance, and 3.1 percent for TANF. The average total amount of benefits received among beneficiaries of any program is about $3,500, while the largest average benefit among the individual programs is for recipients of Section 8 housing vouchers, who receive an average benefit worth $3,900.

The regression results for this group are presented in Appendix Table C6. As with the results for workers with wage values in the valid range, increasing wages for this group is predicted to reduce the share receiving public assistance-in this case, by 2.0 percentage points from every $1 increase in average hourly wages. For the EITC, participation declines significantly, by 1.8 percentage points for every $1 increase in wages; for SNAP, the decline is 1.2 percentage points, and for Medicaid, the decline is 0.7 percentage points. The coefficients values for the other programs are either statistically insignificant or not economically meaningful.

In the regressions on the value of benefits, the results are mixed. The coefficient on the value of all benefits is positive, suggesting that benefits for workers in this group could increase in aggregate on average if their wages rose, although this result is not statistically significant. We can see, however, that this positive value is driven, as expected, by the EITC and CTC. The results for these programs show that for every additional dollar in hourly wages, aggregate EITC and CTC dollars for workers in this group would increase by an average of approximately $89 and $47 per worker, respectively. At the same time, the value of benefits from SNAP and housing assistance would decrease by an average of about $75 and $24 per worker, respectively. Values for the other programs are not statistically distinguishable from zero.

In light of the fact that these workers' imputed hourly wages are subject to considerable error, it is not clear whether we can draw any strong conclusions from these results. Nevertheless, the regression results do suggest that in cases where reported subminimum values are the result of wage theft or gaps in FLSA coverage, workers may be entitled to greater income both from their employer and from the tax-and-transfer system.

Endnotes

1. Costs of basic necessities and the levels of income required to achieve a modest but adequate standard of living are discussed in detail in Gould, Cooke, and Kimball (2015).

3. In an update to this report, West (2015) estimates that increasing the federal minimum wage to $12 by 2020 would reduce SNAP expenditures by $5.3 billion annually, or $53 billion over 10 years.

4. This report does not include any data on participation or costs in the National School Lunch Program, the only other large national means-tested public assistance program that does not specifically target the elderly or disabled.

5. This threshold is significantly higher in states that expanded Medicaid through the Affordable Care Act. In fact, because Medicaid costs for participants who gained eligibility from the Affordable Care Act's expansion are covered almost entirely by the federal government, states that expanded Medicaid stand to achieve considerable state government savings in Medicaid if existing participants' incomes are raised. West and Reich (2014b) describe these effects in detail.

6. For more information on the structure or function of the EITC or CTC, see Marr et al. (2015) or Center on Budget and Policy Priorities (2015).

7. This report focuses on utilization of means-tested public assistance; thus, it does not include Social Security or Medicaid, as they are programs available specifically and universally for retired or elderly people.

8. Wage decile information is presented in Appendix Table B1.

9. Note that throughout this report, Medicaid is included for all calculations of participation in assistance programs; however, the fungible value of Medicare benefits are not included in any estimates of program costs or value of benefits.

10. This finding is consistent with Shierholz (2014), which finds particularly high poverty rates among restaurant workers, and Allegretto et al. (2014), which finds that more than half of full-time fast food workers were enrolled in some public assistance program.

11. See Cooper, Schmitt, and Mishel (2015).

12. For example, from 2012 to 2014, Georgia's employment-to-population ratio was 57.8 percent, Louisiana's was 55.8 percent, and Mississippi's was 51.5 percent. The national average for this period was 58.7 percent.

13. The results in Table 3 are all produced using a linear estimation model, meaning that the effects only describe average effects across the range of wages in each group. This provides suitable results for predicting overall changes in participation rates and benefit amounts. However, because the EITC and CTC have non-linear benefit structures, more precise effects at particular wage levels can be better estimated using nonlinear models. For this study, we did produce estimations with a quadratic form of the hourly wage variable. The results showed no meaningful difference in effects from the linear models at the average of each wage range; thus, we only report the linear results. However, we are happy to provide the quadratic regression results upon request.

14. The effects for WIC and TANF in this wage group are not statistically distinguishable from zero. This is likely because of the relatively small number of workers participating in these programs captured in this wage range, but it may also be that other factors-e.g., the recent birth of a child-are far more significant in determining participation in these programs.

15. The Child Tax Credit is structured so that workers may receive 15 percent of their earnings after the first $3,000 back as a credit to their tax liability, with a maximum credit of $1,000 per dependent child below age 17. They will only receive the refundable portion of the credit if their tax liability does not exceed the value of their credit. See Marr et al. (2015) for further detail.

16. Because the hourly wages in this study were constructed using reported annual wages and hours worked, it is impossible to isolate effects from changes in work hours from changes in wages. Workers at the lowest wages are also the most likely to work limited hours. TANF participation requirements vary across states, although income limits tend to be very low. Thus, it is likely that factors beyond hourly wage rates that limit workers' annual income, such as a lack of adequate hours, may be confounding the results for this program. This is also true for the CTC; however, the program's unique structure, in which workers' first $3,000 in earnings are excluded from eligibility, may also play a role.

17. This finding is similar to that of West and Reich (2014a), who estimated that for every 10 percent increase in the minimum wage, SNAP expenditures fall by 1.9 percent. They estimate that increasing the minimum wage to $10.10 would reduce program outlays by nearly $4.6 billion. By the estimates in this report, if workers in the range likely to benefit from a $10.10 minimum wage received an average hourly wage increase of $1.61-as calculated in Cooper (2014)-it would reduce SNAP expenditures by $4.1 billion.

18. Adjusting the proposed $12 in 2020 minimum wage for expected inflation back to 2014 dollars would likely place it closer to the 25th percentile rather than the 30th percentile value of $12.16 measured in this report's data. However, this does not include potential spillover effects above the $12 minimum. Moreover, these figures do not include the fungible value of Medicaid benefits and do not account for underreporting in LIHEAP participation, meaning that this estimate is still arguably conservative.

19. Author's analysis of administrative data for each program. For the EITC and CTC, fiscal 2014 data were not available at the time of publication, so fiscal 2013 data were used as a substitute.

20. See Council of Economic Advisers et al. (2014) or Reeves and Venator (2014) for details on the proposal.

21. Sawhill and Karpilow (2014) estimate that the EITC expansion coupled with a federal minimum-wage increase to $10.10 would cost $10 billion annually, with savings in other means-tested programs equaling $11 billion. With the increasingly negative effects on aggregate EITC spending observed in this report, one can assume that adopting the EITC expansion with a higher minimum wage would result in even greater net savings.

22. Comprehensive administrative data for LIHEAP are not available; thus, no adjustment was made to reported LIHEAP participation rates and benefits amounts.

23. See also Greenhouse (2014).

24. These data are from 2010 to 2012. Home health care workers and aides were brought under the FLSA in 2014; however, farm workers on small farms remain exempt from the FLSA's wage protections.

25. Author's analysis of American Community Survey microdata, pooled sample 2007-2011. Data compiled by Ruggles et al. (2010).

References

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Balancing paychecks and public assistance: How higher wages would strengthen what government can do

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Higher hourly wages for low- and middle-wage workers, achievable through a variety of labor-market policies, would unambiguously generate savings in government safety-net and income-support programs-savings that could be used to strengthen and expand anti-poverty programs or make critical public investments to boost productivity and grow the economy.

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Joshua Tucker: The following is a guest post from political scientists Michael Krassa of the University of Illinois and Benjamin Radcliff of the University of Notre Dame.
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The minimum wage promises to remain one of the most hotly contested political issues in American politics. The Congressional Budget Office recently provided its nonpartisan judgment of the consequences of the Obama administration's proposed increase. Their analysis suggests that a hike would do what both liberals and conservatives suggest: A higher minimum wage will cost some jobs but will also raise the standard of living for many millions of people. Such information is surely important, but it hardly answers the question that we should ask of all changes in public policy: Do they make the world a better place when both costs and benefits are considered?

What is needed is a single metric by which to make such an evaluation. Albert Einstein, in a famous essay from 1949, suggests that we consider changes in social and political practices in accord with the degree to which they contribute to making "human life as satisfying as possible." Thus, why not judge the minimum wage, and by extension other regulations that affect the relationship between worker and employer, by this criterion: how do such policies affect the degree to which people actually enjoy their lives?

Arguments about the minimum wage reflect the fundamental ideological divide over how to maximize human well-being within the context of market democracy. The first approach suggests minimizing the role of government, leaving the market economy alone to produce the optimal outcomes that many believe it naturally creates if allowed to do so. This strategy, favored by conservatives, and especially by the "market fundamentalists" of the Tea Party, follows Ronald Reagan's judgment that "government is not a solution to our problems, government is the problem." Hence, if we resist popular demands for more government services and protections - if we really do "free the market" - it will produce von Hayek's vision of a " spontaneous order " that promises to create an efficient and just world.

Progressives, in contrast, focus on Franklin Roosevelt's contention that if left to itself, the market creates so much want, insecurity and "economic tyranny" that the "pursuit of happiness" is really only possible when "the American citizen can ... appeal to the organized power of the government." This is, after all, what Thomas Jefferson famously claimed was a central purpose of government - to protect our right to pursue happiness. In this view, we need the "organized power of the government" as a necessary complement to efficient but pitiless market forces.

Can one approach be empirically demonstrated to contribute to greater levels of human well-being? The following graph is at least highly suggestive of an answer. It plots the mean level of life satisfaction in a nation against its minimum wage (for those industrial democracies that have a minimum wage). As is apparent, the slope relating wages to satisfaction is positive (and statistically significant at the .01 level), meaning that average levels of life satisfaction increase as minimum wage increases.

Wages are expressed in real 2012 U.S. dollars normalized for purchasing power parity (to adjust for the fact that the dollar buys more in some places than others, reflecting the cost of living). Satisfaction is the mean response (on a 1-10 scale) to the standard question "Taking all together, how satisfied or dissatisfied are you with your life as a whole these days?" with higher values representing greater satisfaction. The minimum wage data are from the OECD for the year 2005 (chosen to avoid the disruptions of the Great Recession). Satisfaction data are for the same year (or the closest for which data exist), using the massive collection of survey data at the World Database of Happiness (using question type 122f).

The relationship is dramatic and clear: As the minimum wage increases, people are in general more satisfied with their lives. To be sure that this result is not an artifact of failing to consider alternative explanations, we note that the same positive relationship continues to obtain if we add statistical controls for other factors, including as a country's level of economic development (GDP per capita, again in purchasing power parity), which may affect both its level of happiness and the level of its minimum wage, and (simultaneously) short-term economic performance (the unemployment rate). Data are from the Penn World Table version 7.0 and the OECD Main Economic Indicators (2012), respectively. With these controls, the minimum wage is still positively associated with satisfaction in statistically significant terms.

Substantively identical results are also found if we use the average value of life satisfaction from 2000 to 2009 (rather than just the single year analysis noted above) compared to the mean value of the minimum wage for the same time period. Also as before, the relationship holds if we add statistical controls for GDP and the mean level of unemployment over the same period.

In sum: regardless of the size of the economy, immediate economic conditions or the time frame chosen, life satisfaction increases as the minimum wage increases.

This analysis includes only those Western industrial democracies that have a statutory minimum wage. What about those few that do not? In those countries - as in Scandinavia - labor unions typically represent such a large portion of workers that the setting of a minimum earnings rate is left by the government for the unions to negotiate with business. The result of this negotiation, of course, is almost always higher minimum wages than are found in countries with statutory minimum wages (such laws generally existing as a necessary complement to labor markets precisely because union coverage rates are low). Not coincidentally, the countries with strong labor movements also tend to be the happiest countries in the world. Thus, the UN 2013 World Happiness Report lists Denmark as the happiest country in the world (with Norway and Sweden not far behind). Denmark's effective minimum wage is $20 per hour, thanks to its strong labor unions (with Norway and Sweden also having high de facto minimum earnings).

More detailed research, such as Radcliff's " The Political Economy of Human Happiness " (Cambridge University Press, 2013), employing more elaborate econometric models, indicates that pro-worker labor market regulations are associated with higher levels of life satisfaction. Importantly, this relationship is found whether we consider variation across the industrial democracies or across the American states.

There is thus both theoretical and statistical evidence showing that political intervention in the labor market is associated with greater human happiness. Other things being equal, people are happier in countries - and states - that actively protect workers. While there are naturally some negative economic consequences of regulation, the net effects of these policies seem to be demonstrably positive, insofar as we are concerned with the degree to which people find their lives to be satisfying.

Equally telling is the fact that the research finds this "happiness benefit" applies to everyone in society: the affluent and the poor, men and women, liberals and conservatives, people who belong to unions and those who do not.

While we know that correlation is not causation (some of the relationship between minimum wage levels and societal happiness may be confounded by unobserved factors), the evidence suggests that certain labor market regulations indeed work to better the happiness of all.

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Does a higher minimum wage make people happier?

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Joshua Tucker: The following is a guest post from political scientists Michael Krassa of the University of Illinois and Benjamin Radcliff of the University of Notre Dame. ***** The minimum wage promises to remain one of the most hotly contested political issues in American politics.

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The California Labor Code requires an increase to the state minimum wage each year. Effective Jan. 1, 2019, the statewide minimum wage will increase from $11 to $12 per hour for employers with more than 25 employees. This also impacts other wage and hour obligations, such as the minimum salary requirement for exempt employees, which will increase to $49,920.

In addition to the statewide minimum wage, several cities and counties have adopted their own minimum wage requirements; more information is available on the University of California, Berkeley Labor Center website. In several areas, the minimum wage will increase beginning Jan. 1, 2019 - such as San Jose, where the minimum wage will increase from $13.50 to $15 per hour. In other areas the increase becomes effective July 1, 2019 - such as in the city and county of Los Angeles, where the minimum wage increases from $13.25 to $14.25 per hour. Like the statewide minimum wage, the rates may differ for small employers. Under California law, employers must comply with the highest applicable minimum wage.

Further, California Labor Code sections 515.5 and 515.6 provide overtime exemptions for certain computer professionals and licensed physicians. One aspect of the exemption requires a minimum rate of pay, which is subject to an annual adjustment by Department of Industrial Relations () when there is an increase in the Consumer Price Index. Effective Jan. 1, 2019, the licensed physician or surgeon minimum hourly rate of pay to qualify as exempt from overtime will increase from $79.39 to $82.72.

The computer software professional minimum hourly rate of pay will increase from $38.89 to $39.90 beginning Jan. 1, 2019. The minimum monthly salary will increase from $6,752.19 to $6,927.75, and the minimum annual salary will increase from $81,026.25 to $83,132.93.

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California's Minimum Wage, Other Pay Rates Increase Jan. 1, 2019 - California Hospital Association

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The California Labor Code requires an increase to the state minimum wage each year. Effective Jan. 1, 2019, the statewide minimum wage will increase from $11 to $12 per hour for employers with more than 25 employees. This also impacts other wage and hour obligations, such as the minimum salary requirement for exempt employees, which will increase to $49,920.

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In April, 2016, California Gov. Jerry Brown signed the state's $15-an-hour minimum wage law into effect.

As a consequence, the minimum wage went from $10 an hour to $10.50 an hour for businesses with 26 or more employees on January 1, 2017. On January 1 of this year, the minimum wage was hiked again to $11.00 an hour for larger employers and $10.50 for businesses with 25 or fewer employees.

Federal jobs data for 2018 suggests that California's rural manufacturing base might be getting hammered by the higher mandated minimum wage.

Unless a future governor waives the scheduled increases due to economic weakness, the government mandated hourly wage hikes will keep coming-$1 per hour every year-until they reach $15 an hour four years from now for large employers with smaller employers hitting $15 in 2023. After that, future increases are pegged to national consumer price index for urban wage earners and clerical workers.

Many factors affect regional job creation and wage growth. Availability of suitable labor, energy and land costs, infrastructure, including access to clean water and well-maintained roads, as well as state and local taxes, the regulatory burden and the lawsuit environment. Measured against these factors, California has significant challenges.

Before listing the negative pressures on California's business climate, it is important to note that the state has tremendous assets: Hollywood, Silicon Valley, a mild climate, and access to capital as well as to dynamic Pacific Rim trading partners. These assets have combined to make California America's idea engine, boosting incomes at the high-end even while California's middle class and entrepreneurs have continued to move out of state.

While California's state college and university system are highly regarded nationally, its public K-12 system is at the bottom of most surveys.

California's 2017 retail electric prices were 89% higher than in its peer competitor, Texas. California's gasoline prices remain the highest in the contiguous 48 states, at $3.619 per gallon of unleaded, some 26% higher than the national average of $2.865.

California's once-vaunted water storage and conveyance system have been essentially frozen in time for decades, as the state's politicians spend billions on environmental programs and studies and precious little on expanding and securing California's water supply.

California's highway system, once the envy of the world, has similarly been put at the bottom of the priority list, regularly being ranked at the tail end of national surveys. Further, the state's union labor agreements and environmental approval maze contribute to the state's road maintenance costs being almost 40% higher than the national average.

As for state and local taxes, Forbes ranked California as 45 th-worst in 2016.

The U.S. Chamber of Commerce, meanwhile rated California as having the 47th-worst lawsuit climate in the nation last year.

The regulatory burden on small business was studied in a report authorized by the California legislature 10 years ago which found that small businesses faced a complex puzzle of state and local rules that cost about $134,000 per year in compliance costs.

And now the ongoing yearly rise in the minimum wage adds one more key inhibitor to California's economic growth, the effect of which will be most heavily felt in the approximately one-third of the state where the cost of living and wages are closer to the national average than are California's metropolitan areas.

According to the U.S. Bureau of Economic Analysis, in 2016, the cost of housing in California's metropolitan areas was 60% higher than in its small towns and rural areas. Including all goods and services, California's cities were about 16 percent more costly than in the surrounding small town and rural areas.

California's minimum wage law does not take this metro/rural cost difference into account, treating a state with the nation's greatest population and third-largest land mass as if it was a solitary urban county.

By way of example, the U.S. Bureau of Labor Statistics reports that in May 2017, the median wage for 4.4 million hourly-wage workers in California was $19.04 per hour. In Fresno, California's 5 th-most-populous city, the median wage for the 373,000 workers there was $15.80 per hour, 17% below the state average.

Yet, the new minimum wage in Fresno for a larger employer is $11 an hour, the same as it is in Los Angeles or Silicon Valley. This betrays an economic illiteracy bordering on the insane.

Even New York's legislature, when it passed a similar minimum wage hike over several years, thought to include regional variations that account for the huge differences in the cost of living between New York City and other regions of the Empire State.

Rural areas across America are frequently home to manufacturing facilities, sited to take advantage of lower land and labor costs. California's aggressive minimum wage hike schedule is likely hitting its remaining rural manufacturing base hard. Since the end of the Great Recession in 2009, California manufacturing employment has seen a modest, but steady recovery, adding jobs every year through 2017. But, so far in 2018, California manufacturing has started to lose jobs and, if the trend continues, it will see its first loss in employment in nine years. By comparison, the U.S. has added 193,000 manufacturing jobs through July 2018.

Many politicians seek to win votes by giving stuff away. In the case of minimum wage laws, they are substituting political judgment for the considered calculations of both employer and employee operating in a freely decided transaction of money for labor.

But, California's minimum wage hike has as much or more to do with powerful government labor unions than it does with the young workers starting out on their first job at minimum wage. This is because a large number of state and local government union contracts are linked to the minimum wage. This is why the California Department of Finance estimated that the minimum wage law would end up costing state government an additional $3.6 billion annually. In addition, the minimum wage law will also ripple into the cost to employ the state's 300,000 K-12 public school teachers, with the added cost to the beleaguered California taxpayer ranging from $6 to $10 billion.

Thus, California's $15 minimum wage law will have two big effects: it will greatly increase labor costs in small town and rural California while hitting taxpayers for as much as almost $14 billion a year for public school teachers and other government employees.

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California Passed $15 An Hour Two Years Ago -- How's It Working?

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In April, 2016, California Gov. Jerry Brown signed the state's $15-an-hour minimum wage law into effect. As a consequence, the minimum wage went from $10 an hour to $10.50 an hour for businesses with 26 or more employees on January 1, 2017.

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Higher minimum wage in California feels like a win for retail workers, and maybe for the state in general, but the picture isn't so clear when you take a closer look.

Earlier this week, California Governor Jerry Brown signed a law raising the state's minimum wage to $15 by 2022. Specifically, the statewide minimum wage will increase from $10 an hour to $10.50 an hour on Jan. 1, 2017, then up to $11 an hour on Jan. 1, 2018. From there it will increase by $1 annually until reaching $15 an hour on Jan. 1, 2022. At the signing ceremony, Brown explained that while the minimum wage increase might not make sense economically, it is necessary from a moral and political standpoint, as it "binds the community together and makes sure that parents can take care of their kids in a much more satisfactory way."

The retail industry relies heavily on hourly workers, and as such it will certainly be impacted by the wage increase. For retail employees in California this likely feels like a win, but if you dig a little deeper and consider the potential impact on the California retail industry as a whole, you'll find that it's not so cut and dry.

Fighting to provide all Californians with livable wages is a noble concept. This increase could very well mean that a single parent can work one job instead of two and have more time to spend with his or her children -- and that's an undeniably good thing. It's also possible that higher wages will drive spending and put more money back into the economy, which would also be a positive outcome. Finally, the wage increase could lead to a happier workforce, less turnover, better efficiency and lower onboarding costs for employers.

On the other hand, we can't ignore the fact that this change presents a serious increase in operational costs for business owners. The first annual increase -- going from $10 to $10.50 starting Jan. 1, 2017 -- will tack on an extra $1,040 per year to maintain an hourly worker putting in 40 hours per week. Let's say a small apparel contractor in Los Angeles has a shop with 15 hourly workers. If that business owner wants to keep the existing staff at full capacity for the year, he or she needs to commit an additional $15,600 to labor. By 2020 that number will jump to $156,000.

There are a few ways in which business owners can work to absorb these costs.

One way is to cut jobs and require increased output from the remaining workforce. While an employer could opt to decrease the number of hours for each worker, the more logical approach would be to keep the most experienced and productive workers at their current schedules. This creates increased competition for fewer jobs, albeit higher-skilled jobs.

Another likely option is that prices will rise. Let's go back to that hypothetical apparel contractor -- in this instance, the business owner would charge its retail partners more for its services, and in turn that retailer would likely pass the increase down to the consumer, in some cases negating their higher income. And of course, there's always the option for California apparel manufacturers to increase production overseas, something that's already increasingly appealing because of the looming Trans Pacific Partnership.

One potentially neutral result that often accompanies increases in labor costs is innovation to improve efficiency and reduce headcount. For example, with more consumers using smartphones as a research tool while shopping in stores, retailers can leverage mobile technology to optimize in-store experiences while reducing the number of sales associates. Eventually we may soon see customers make in-store purchases by scanning a QR code on their smartphones, having been assisted by a virtual sales associate.

Additionally, with more customers buying online, we'll see increased adoption of technologies that expedite the supply chain and improve margins. For example, Hudson's Bay Co. recently announced plans to implement a new robot system in its Toronto distribution center called Perfect Pick, which CEO Jerry Storch says will operate six-to-10 times faster than human stock pickers.

The truth is, nobody knows exactly how everything will unfold for California's retail industry. It is possible that the increased minimum wage will result in less employee turnover and increased consumer spending, which could help to offset the higher operational costs. It is also possible that a significant number of retail jobs will be cut, and some entire companies will have to close because they can't keep up with overhead. It's too soon to tell exactly what impact the wage increase will have, but companies that are agile and effectively balance fewer but higher-skilled labor costs are most likely to prevail long-term.

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Here's how California's minimum wage increase will impact the retail industry

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Higher minimum wage in California feels like a win for retail workers, and maybe for the state in general, but the picture isn't so clear when you take a closer look. Earlier this week, California Governor Jerry Brown signed a law raising the state's minimum wage to $15 by 2022.

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Stop the minimum wage increase to $15 per hour and do something about the rising costs of living!

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Since 1938, when the minimum wage was first introduced (at a rate of $0.25 an hour), the federal minimum wage has increased 22 times. The minimum wage is the salary floor or the lowest possible rate that employers can pay employees.

The most recent update to the federal minimum wage was in 2009, when it was raised to $7.25 an hour. Currently, 29 states and the District of Columbia have a higher minimum wage than the federal rate. As of July 2019, 44 cities had also passed laws raising the minimum wage.

When the state and federal minimum wage are different amounts, employees are entitled to the higher rate of the two. The question is whether the federal minimum wage should be raised again - and if so, to what hourly rate?

Should the Minimum Wage Be Raised?

Opponents believe that increases to the minimum wage will place a burden on employers, especially small companies, resulting in slower growth and decreased levels of employment. Proponents of an increase in the rate say that the minimum wage has not kept up with inflation and that many minimum wage workers are impoverished.

People on both sides of the issue point to economic studies and data to back up their viewpoint. Many Americans, however, have already made up their minds on the issue: A 2019 CNBC survey showed that 60% of respondents favored raising the federal minimum wage to $15 per hour.

Here is a summary of the pros and cons of raising the minimum wage.

Why the Minimum Wage Should Be Raised

An increase in the minimum wage raises the standard of living for impoverished workers.

The minimum wage hasn't kept up with inflation. As a result, the pay of many workers, particularly those with families of three or more people, are now well below the poverty level.

Studies show graduated increases in the minimum wage have a low impact on unemployment.

Consumers would spend more money if they earned more money, meaning that an increase to the minimum wage would have positive effects on the economy.

Increasing the minimum wage could help reduce gender- and race-based income inequality.

Government expenses for social programs aimed at the poor would potentially be reduced. This might result in slightly lower taxes for other Americans.

Slightly more revenue for the government would be generated from payroll taxes for social security.

Why the Minimum Wage Should Not Be Raised

In companies with a fixed compensation budget, an increase to the minimum wage could result in layoffs or slower hiring.

Employers might hire fewer workers in entry-level jobs, which might make it harder for workers to begin their careers.

An increase to the minimum wage would provide an incentive for employers to invest in automated processes, technology, and machinery to increase productivity rather than human resources.

Raises the incentive for companies to outsource labor to countries where minimum wage rates are lower.

A higher minimum wage could result in an increase of the high school dropout rate.

Prices might be increased to offset higher labor costs.

For small companies, already stressed owner/operators might take on more responsibility.

Wages for higher paid workers might be suppressed, and salary increases might be lower for those not impacted by a higher minimum wage.

State and Local Initiatives to Raise Minimum Wage

Even though the federal minimum wage hasn't increased since 2009, the majority of states have a higher minimum wage than required by the federal government. In addition, some local municipalities have initiated minimum wage increases for their location. For instance, San Francisco's minimum wage is higher than the state of California's minimum wage. (And, in turn, California's minimum wage is higher than the federal minimum wage).

Twenty-two states and the District of Columbia increased their minimum wage during 2017, mostly due to previously passed legislation.

In 2018, the highest state minimum wage was $11.50/hour, in Washington state, followed by Massachusetts and California at $11/hour. Many cities also increased the minimum wage rate as well - as of Jan. 1, 2018, it was $14/hour in Seattle, Washington (or $11.50/hour, plus at least $2.50/hour in tips and benefits) and $15/hour in Sunnyvale, California, for instance.

The Bottom Line

The Federal Minimum Wage is $7.25 per Hour: It was last raised in 2009.

Many States and Localities Set a Higher Minimum Than the Federal Mandate: As of 2019, 29 states and 44 cities have a higher minimum wage.

A Recent Survey Showed That Many Americans Favor an Increase: 60% want a $15 per hour minimum wage, according to a CNBC poll.

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Since 1938, when the minimum wage was first introduced (at a rate of $0.25 an hour), the federal minimum wage has increased 22 times. The minimum wage is the salary floor or the lowest possible rate that employers can pay employees.

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A minimum wage increase affecting 21 states nationwide will, to varying degrees, impact several onion-growing regions in the United States this year and in coming seasons.

The increases, some of which went into full effect on Jan. 1, some of which will kick in during the year and some that are written to increase annually over the next several years, range from a few cents per hour to nearly $2 per hour.

Proponents of the raise pointed out living expenses have risen; opponents countered with the cost to businesses the increase will have and the likely higher cost in products/services to counter that.

In the onion industry, minimum wage increases in Oregon, Washington, Arizona, Colorado, California and New York are of particular note.

In Arizona, the minimum wage increased from $8.05 to $10 on Jan. 1 and will continue to increase annually until it reaches $12 in 2020; in California, the minimum wage increased from $10 to $10.50 on Jan. 1 and will eventually hit $15 in 2022; in Washington the minimum wage increased from $9.47 to $11 on Jan. 1; in Colorado, the minimum wage increased from $8.31 to $9.30 on Jan. 1 and will increase 90 cents each year until it hits $12 in 2020; in New York, the minimum wage increased from $9 to $9.70 on Jan. 1 and will hit $12.50 after another four increases over the next several years; and in rural Oregon, the minimum wage will increase from $9.50 to $10.00 on July 1, and up $.50 per year to $12.50 in 5 years. In urban Oregon, increases are higher.

According to a Jan. 5 online New York Times post at https://www.nytimes.com/interactive/2017/01/05/business/economy/state-minimum-wages.html?_r=0, "In states with higher proportions of workers in low-wage jobs, the minimum-wage increase will have an effect." The post goes on to provide a map showing the states' raises and the "[d]irectly affected workers as a share of state's wage-earning workforce."

Five states in the nation have no minimum wage laws, using instead the federal minimum wage of $7.25 per hour. Fifteen states have minimum wages lower than or equal to the federal

In his post on Dec. 22, 2016, as The Motley Fool at http://www.fool.com/retirement/2016/12/22/2017-minimum-wage-increases-these-21-states-are-pa.aspx, analyst Dan Caplinger examined the issue in depth and concluded, "For those who earn the minimum wage, any boost to pay can be a game-changer, and those who live in the states listed above will celebrate the pay raises they get. Nevertheless, the debate over whether minimum-wage increases are positive or negative for the economy as a whole is likely to continue not just in 2017 but for years to come."

When OnionBusiness.com asked for comments from the onion industry, Paul Reeping with G Farms in Litchfield Park, AZ, responded, "On Jan. 1 Arizona experienced the largest single increase in the minimum wage of all states affected this year. This will no doubt impact our cost of doing business. Basically, we are going to have to assess the way we address labor and where we can save in order to stay competitive and maintain the high quality we're known for. Obviously, our onion operation will feel the hit, but it's going to be a real eye-opener in general for the state of Arizona since it's a big tourism state with a lot of service industry businesses that are going to have to raise prices to keep viable."

In Northern Colorado, longtime grower/shipper Bob Sakata of Sakata Farms in Brighton, CO, said, "I voted no on it. But I respect the majority that voted yes. It's close to a 7 percent increase. If you look at the fast-food industry, they'll raise their end prices, which could harm society in the long run. But in agriculture we can't raise our end prices. When we get an increase in minimum wage mandated by the government, we have to eat it. It hurts us in ag. The key thing is we in this industry have no control on the price of our end product."

Also speaking about the impact in Colorado, where he handles onions for Western Slope growers, Don Ed Holmes of The Onion House in Weslaco, TX, said, "I don't know what the answer is. I am sure the wage will go up here in Texas at some point. But I do know big increases in the minimum age are not pro-business. We have one McDonald's here in this area that doesn't have a person you talk to. You talk to a machine. And that's what it's doing - it's bringing on more automation."

In Nyssa, OR, Kay Riley at Snake River Produce weighed in. Kay was among a group that "worked hard to make this as palatable as it is," he said on Jan. 18. He explained that Oregon's minimum wage is three-tiered depending on location, with urban wages higher than outlying regions. In Nyssa, he said, "We're at $9.50 and will go up in July. We got hit twice last year, and from our [cost of doing business in the industry] perspective, it's difficult because we're within 500 yards of Idaho where the minimum wage is $7.25."

On one hand, Kay said, Oregon does have "first choice on employees, but right now on both sides of the river there's a labor shortage, and we desperately need labor. What we really need is a legal guest worker program."

Washington's minimum wage increase of more than $1.50 per hour prompted Larry Bauman at L&L Ag Produce in Connell to tell OnionBusiness.com, "The last election in Washington was a rough one for small businesses that do not have the ability to raise their prices to cover the laws that were passed. The new minimum wage law passed, which also contained mandatory sick leave for all. We were planning on a $9.63 per hour rate until the new law changed that to $11 on Jan. 1 with a cap of $13.50 by 2020. After that the rate will be tied to the cost of living scale."

Larry continued, "What happened at our facility was that almost all of our employees were over the $11 already. Our concern is that many people want the same percentage increase applied to their wage rate. The sick leave deal does not start until next year and may have some legal challenges before it is in acted."

He said, "The federal change in the base rate of people paid as managers is a real issue also, although it is on hold now. The changes on the managers' duties will cause many problems. All this filters down to the farms and to the labor contractors that provide needed workers in the production areas."

What's more, "In our operation there isn't a lot we can change, as we have already added internal camera systems on our line and upgraded our facilities. One thing for sure is that the onion business can not survive with the prices that have been going on this season combined with these new laws."

Brenden Kent at Sunset Onions in Prosser, WA, added, "What some seem to forget is that the people that have been with us for five years that are making $11 now. They are going to want increase, and they deserve it. So the impact is not only going to be felt from increasing pay for entry level workers, but adjusting the wages for those that have been loyal and steady employees."

Don Ed Holmes said, "If they let supply and demand take care of the situation, it would."

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Minimum wage increase impacts onion-growing areas

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A minimum wage increase affecting 21 states nationwide will, to varying degrees, impact several onion-growing regions in the United States this year and in coming seasons. The increases, some of which went into full effect on Jan.

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On the anniversary of the last time the federal minimum wage was increased to $7.25, it's timely to go over some basic facts on the minimum wage. Here are 10...

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Technology replacing people

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Production cost increase

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Higher minimum wage in California feels like a win for retail workers, and maybe for the state in general, but the picture isn't so clear when you take a closer look.

Earlier this week, California Governor Jerry Brown signed a law raising the state's minimum wage to $15 by 2022. Specifically, the statewide minimum wage will increase from $10 an hour to $10.50 an hour on Jan. 1, 2017, then up to $11 an hour on Jan. 1, 2018. From there it will increase by $1 annually until reaching $15 an hour on Jan. 1, 2022. At the signing ceremony, Brown explained that while the minimum wage increase might not make sense economically, it is necessary from a moral and political standpoint, as it "binds the community together and makes sure that parents can take care of their kids in a much more satisfactory way."

The retail industry relies heavily on hourly workers, and as such it will certainly be impacted by the wage increase. For retail employees in California this likely feels like a win, but if you dig a little deeper and consider the potential impact on the California retail industry as a whole, you'll find that it's not so cut and dry.

Fighting to provide all Californians with livable wages is a noble concept. This increase could very well mean that a single parent can work one job instead of two and have more time to spend with his or her children -- and that's an undeniably good thing. It's also possible that higher wages will drive spending and put more money back into the economy, which would also be a positive outcome. Finally, the wage increase could lead to a happier workforce, less turnover, better efficiency and lower onboarding costs for employers.

On the other hand, we can't ignore the fact that this change presents a serious increase in operational costs for business owners. The first annual increase -- going from $10 to $10.50 starting Jan. 1, 2017 -- will tack on an extra $1,040 per year to maintain an hourly worker putting in 40 hours per week. Let's say a small apparel contractor in Los Angeles has a shop with 15 hourly workers. If that business owner wants to keep the existing staff at full capacity for the year, he or she needs to commit an additional $15,600 to labor. By 2020 that number will jump to $156,000.

There are a few ways in which business owners can work to absorb these costs.

One way is to cut jobs and require increased output from the remaining workforce. While an employer could opt to decrease the number of hours for each worker, the more logical approach would be to keep the most experienced and productive workers at their current schedules. This creates increased competition for fewer jobs, albeit higher-skilled jobs.

Another likely option is that prices will rise. Let's go back to that hypothetical apparel contractor -- in this instance, the business owner would charge its retail partners more for its services, and in turn that retailer would likely pass the increase down to the consumer, in some cases negating their higher income. And of course, there's always the option for California apparel manufacturers to increase production overseas, something that's already increasingly appealing because of the looming Trans Pacific Partnership.

One potentially neutral result that often accompanies increases in labor costs is innovation to improve efficiency and reduce headcount. For example, with more consumers using smartphones as a research tool while shopping in stores, retailers can leverage mobile technology to optimize in-store experiences while reducing the number of sales associates. Eventually we may soon see customers make in-store purchases by scanning a QR code on their smartphones, having been assisted by a virtual sales associate.

Additionally, with more customers buying online, we'll see increased adoption of technologies that expedite the supply chain and improve margins. For example, Hudson's Bay Co. recently announced plans to implement a new robot system in its Toronto distribution center called Perfect Pick, which CEO Jerry Storch says will operate six-to-10 times faster than human stock pickers.

The truth is, nobody knows exactly how everything will unfold for California's retail industry. It is possible that the increased minimum wage will result in less employee turnover and increased consumer spending, which could help to offset the higher operational costs. It is also possible that a significant number of retail jobs will be cut, and some entire companies will have to close because they can't keep up with overhead. It's too soon to tell exactly what impact the wage increase will have, but companies that are agile and effectively balance fewer but higher-skilled labor costs are most likely to prevail long-term.

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Here's how California's minimum wage increase will impact the retail industry

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Higher minimum wage in California feels like a win for retail workers, and maybe for the state in general, but the picture isn't so clear when you take a closer look. Earlier this week, California Governor Jerry Brown signed a law raising the state's minimum wage to $15 by 2022.

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Wage increase

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The California Labor Code requires an increase to the state minimum wage each year. Effective Jan. 1, 2019, the statewide minimum wage will increase from $11 to $12 per hour for employers with more than 25 employees. This also impacts other wage and hour obligations, such as the minimum salary requirement for exempt employees, which will increase to $49,920.

In addition to the statewide minimum wage, several cities and counties have adopted their own minimum wage requirements; more information is available on the University of California, Berkeley Labor Center website. In several areas, the minimum wage will increase beginning Jan. 1, 2019 - such as San Jose, where the minimum wage will increase from $13.50 to $15 per hour. In other areas the increase becomes effective July 1, 2019 - such as in the city and county of Los Angeles, where the minimum wage increases from $13.25 to $14.25 per hour. Like the statewide minimum wage, the rates may differ for small employers. Under California law, employers must comply with the highest applicable minimum wage.

Further, California Labor Code sections 515.5 and 515.6 provide overtime exemptions for certain computer professionals and licensed physicians. One aspect of the exemption requires a minimum rate of pay, which is subject to an annual adjustment by Department of Industrial Relations () when there is an increase in the Consumer Price Index. Effective Jan. 1, 2019, the licensed physician or surgeon minimum hourly rate of pay to qualify as exempt from overtime will increase from $79.39 to $82.72.

The computer software professional minimum hourly rate of pay will increase from $38.89 to $39.90 beginning Jan. 1, 2019. The minimum monthly salary will increase from $6,752.19 to $6,927.75, and the minimum annual salary will increase from $81,026.25 to $83,132.93.

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California's Minimum Wage, Other Pay Rates Increase Jan. 1, 2019 - California Hospital Association

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The California Labor Code requires an increase to the state minimum wage each year. Effective Jan. 1, 2019, the statewide minimum wage will increase from $11 to $12 per hour for employers with more than 25 employees. This also impacts other wage and hour obligations, such as the minimum salary requirement for exempt employees, which will increase to $49,920.

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The downside is very, very small

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As the largest city in the Bay Area, San Jose recognizes the impact it could make if it joins several neighboring cities by raising the minimum wage to $15 in 2019 - three years ahead of the recently signed state law.

Pablo Narvaez toils for $10 an hour at Mcdonald's and sends money twice a month to Mexico to support his wife Dolores and daughter Cinthia. The prospect of earning $15 an hour gives him hope.

READ STORY: California enacts highest statewide minimum wage in US

He said the higher wage will help him pay rent, support his daughter's education and pay for food. He also said it will impact all workers.

San Jose's city council is pouring over a 45-page study on the impact of going from $10.30 to $15. The study indicates 49 percent of minimum wage earners are Latino. It would give them a $3,000 raise or $345 million collectively. Restaurants would bear a 10 percent increase in labor costs, while retailers would see a 2 percent increase. "We think the study shows that the benefits of doing that are very widespread and the downside is very, very small," South Bay Labor Council Executive Ofc. Ben Field said.

While there seems to be widespread community support for a $15 minimum wage, some business owners disagree.

WATCH VIDEO: Some South Bay business owners oppose minimum wage hike

When Santa Clara raised its minimum wage this year from $9 to $11, the owner of By the Bucket said he took a hit of over $75,000. Non-tipped workers already above minimum wage, demanded a raise like tipped employees. "I don't think it's fair for tipped employees to make the same amount of money as a non-tipped employee. Now you're not making $40, $45 to $50, you're in the $60 to $70 an hour when it comes to tips," Bucket Bar & Grill owner Jim Furious said.

The restaurant laid off six employees. San Jose is projecting 1,000 jobs will be lost, but almost that many will be created in nearby cities from spending of higher pay.

RELATED: Economists weigh the pros and cons of a $15 minimum-wage

WATCH VIDEO: California's $15/hour wage could help workers, cost jobs

Click here for full coverage on minimum wage.

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study shows benefits to raising minimum wage in san jose

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some south bay shop owners say $15 minimum wage hike is too much

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Study shows benefits to raising minimum wage in San Jose

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As the largest city in the Bay Area, San Jose recognizes the impact it could make if it joins several neighboring cities by raising the minimum wage to $15 in 2019 - three years ahead of the recently signed state law.

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On the anniversary of the last time the federal minimum wage was increased to $7.25, it's timely to go over some basic facts on the minimum wage. Here are 10...

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Smart essential move

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As a small-business owner and as a human being, I applaud Gov. Brown and the legislature for recognizing that wages must be high enough to allow working people and their families to live with dignity.

The landmark agreement to gradually raise the California minimum wage to $15 over the next six years is a smart and essential move. For my business and for our state's overall economic health, the future looks brighter with decent wages that allow families to pay their bills and make a few purchases. Our employees, collectively speaking, are our customers.

But the need for livable wages is more than a cold business calculation. As a small-business owner, it is very important to me to maintain a decent quality of life for my family and my employees. In my own past, I had to hold down four jobs to survive while raising my four children. Now as an entrepreneur and business owner, I will never cause that hardship for someone else.

By paying more than the minimum wage, I build the trust of my employees, and that is more than worth the cost. My employees are enthusiastic about their jobs, they are dedicated to doing things right, and they stay with me longer. Who wants a workplace where employees are stressed because they can't afford the light bill or clothes for their kids, and are constantly looking for better jobs?

Maybe a raise of 50 cents an hour doesn't seem like much. But for someone scraping by on minimum wage, that additional $4 a day can mean the difference between taking a bus home or walking an hour on tired feet. It could mean being able to add a glass of milk or green vegetables to the family meal. The small things many of us take for granted are not so small when they're out of reach.

The myth that only teenagers make minimum wage is way off. Most of the people who would benefit from raising the minimum wage are family breadwinners, according to economists at UC Berkeley. Only 4 percent are teens.

In San Diego, thanks to true leadership by the City Council, we also have the opportunity this June to enact a minimum-wage increase sooner for workers in our high-cost city.

If Proposition I is approved on the June 7 ballot in the City of San Diego, people making minimum wage in the city will get a 50-cent raise immediately. Then, in January 2017, the wage will rise again to $11.50. The proposed statewide wage starts then, at a dollar less, and catches up to the San Diego wage by 2019.

Especially because of high housing costs here, San Diego workers urgently needed this local increase back when it was approved by the City Council in the summer of 2014. Blocked by a petition drive requiring a referendum, the raise is long overdue.

I know some of my fellow business owners object to raising the wage floor, even forecasting doom for their companies. Past experience should ease their fears.

Opponents predicted a minimum-wage increase in San Jose would force businesses to close. But in one year after the increase was implemented, the city added a total of 9,000 new businesses. Scott Knies, head of the San Jose Downtown Association, has repeatedly acknowledged that the minimum wage increase did not hurt businesses. Likewise, business is booming in Seattle and in other cities and states that have recently raised their minimum wages.

Every business is part of a community, and paying a decent, livable wage should be a basic tenet of responsible business ownership.

It's unacceptable and un-American for working people to be paid so little that they live in poverty. Nobody - none of my neighbors or fellow Californians - should come home from a solid week of work with a paycheck too small to cover basic bills like rent, utilities and groceries.

The statewide increase to $15 puts California in the forefront of a movement whose time has come. We also need the San Diego increase to ease the struggles of more than 170,000 working people in our community over the next two and a half years. On June 7, San Diego voters have a unique opportunity to improve life for so many families in America's finest city. Vote yes on Proposition I.
Rodriguez is founder and owner of Queen Bee's Art & Cultural Center, a business in San Diego's North Park neighborhood.
Copyright © 2019, The San Diego Union-Tribune

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Minimum wage increase benefits all of us in California

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As a small-business owner and as a human being, I applaud Gov. Brown and the legislature for recognizing that wages must be high enough to allow working people and their families to live with dignity. The landmark agreement to gradually raise the California minimum wage to $15 over the next six years is a smart and essential move.

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Minimum wage increase schedule for Ca

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Labor Commissioner's Office

Effective January 1, 2023, the minimum wage is $15.50 per hour for all employers. Some cities and counties have higher minimum wages than the state's rate. There is a list of City and County minimum wages in California maintained by UC Berkeley.

The minimum wage rates applicable in recent years can be found in the IWC wage orders. Effective January 1, 2023, the minimum monthly salary for sheepherders and goat herders increases to $2,755.48 per month for all employers. The minimum monthly salary for sheepherders and goat herders is specially set under IWC Wage Order 14-2001. Wages paid to sheepherders and goat herders may not be offset by meals or lodging provided by the employer. Instead, there are provisions in IWC Order 14-2001, Sections 10(F), (G) and (H)) that apply to sheepherders and goat herders with respect to monthly meal and lodging benefits required to be provided by the employer.

Starting in 2017, California started a phase-in schedule to reach the $15 minimum wage for all employers. Read more about the $15 phase-in.

Minimum Wage for Employers with 25 Employees or Less

Minimum Wage for Employers with 26 Employees or More

Most employers in California are subject to both the federal and state minimum wage laws. Also, local entities (cities and counties) are allowed to enact minimum wage rates and several cities have recently adopted ordinances which establish a higher minimum wage rate for employees working within their local jurisdiction. See the list of City and County minimum wages in California maintained by UC Berkeley.

The effect of this multiple coverage by different government sources is that when there are conflicting requirements in the laws, the employer must follow the stricter standard; that is, the one that is the most beneficial to the employee. Thus, since California's current law requires a higher minimum wage rate than does the federal law, all employers in California who are subject to both laws must pay the state minimum wage rate unless their employees are exempt under California law. Similarly, if a local entity (city or county) has adopted a higher minimum wage, employees must be paid the local wage where it is higher than the state or federal minimum wage rates.

There are some employees who are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.

Minimum Wage Order (MW-2023)
There is an exception for learners, regardless of age, who may be paid not less than 85 percent of the minimum wage rounded to the nearest nickel during their first 160 hours of employment in occupations in which they have no previous similar or related experience.

There are also exceptions for employees who are mentally or physically disabled, or both, and for nonprofit organizations such as sheltered workshops or rehabilitation facilities that employ disabled workers. Such individuals with licenses may have their licenses renewed and organizations may be issued a special license by the Division of Labor Standards Enforcement authorizing employment at a wage less than the legal minimum wage but only until January 1, 2025. Labor Code Sections 1191 and 1191.5

No. The minimum wage is an obligation of the employer and cannot be waived by any agreement, including collective bargaining agreements. Any remedial legislation written for the protection of employees may not be violated by agreement between the employer and employee. Civil Code Sections 1668 and 3513

Yes. There is no distinction made between adults and minors when it comes to payment of the minimum wage.

Yes. Unless another exemption applies as detailed in question 4, employers must pay all employees at least the minimum wage per hour.

No. An employer may not use an employee's tips as a credit toward its obligation to pay the minimum wage per hour.

Workers can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner's Office), or file a lawsuit in court against the employer to recover the lost wages. Additionally, if they no longer work for this employer, workers can include in their claim waiting time penalties pursuant to Labor Code Section 203.

After a wage claim is completed and filed with a local office of the Division of Labor Standards Enforcement (DLSE), it will be assigned to a Deputy Labor Commissioner who will determine, based upon the circumstances of the claim and information presented, how best to proceed. Initial action taken regarding the claim can be referral to a conference or hearing, or dismissal of the claim.

If the decision is to hold a conference, the parties will be notified by mail of the date, time and place of the conference. The purpose of the conference is to determine the validity of the claim, and to see if the claim can be resolved without a hearing. If the claim is not resolved at the conference, the next step usually is to refer the matter to a hearing or dismiss it for lack of evidence.

At the hearing the parties and witnesses testify under oath, and the proceeding is recorded. After the hearing, an Order, Decision, or Award (ODA) of the Labor Commissioner will be served on the parties.

Either party may appeal the ODA to a civil court of competent jurisdiction. The court will set the matter for trial, with each party having the opportunity to present evidence and witnesses. The evidence and testimony presented at the Labor Commissioner's hearing will not be the basis for the court's decision. In the case of an appeal by the employer, DLSE may represent an employee who is financially unable to afford counsel in the court proceeding.

Read more about how to file a wage claim.

10.

What can a worker do if they prevail at the hearing and the employer does not pay or appeal the Order, Decision, or Award?

When the Order, Decision, or Award (ODA) is in the employee's favor and there is no appeal, and the employer does not pay the ODA, the Division of Labor Standards Enforcement (Labor Commissioner's Office) will have the court enter the ODA as a judgment against the employer. This judgment has the same force and effect as any other money judgment entered by the court. Consequently, workers may either try to collect the judgment themself or it can be assigned the Labor Commissioner's Office. Read more about the Judgment Enforcement Unit.

11.

What can a worker do if their employer retaliates against them because they asked about not being paid the minimum wage?

If an employer discriminates or retaliates against a worker in any manner whatsoever, for example, fires the worker because they asked why they were not being paid the minimum wage, or because they filed a claim or threaten to file a claim with the Labor Commissioner, the worker may have rights to protection from retaliation. Learn about filing a discrimination/retaliation complaint with the Labor Commissioner's Office. Alternatively, workers can file a lawsuit in court against their employer.

* The UC Berkeley Labor Center keeps a detailed national list of local minimum wage ordinances. The Department of Industrial Relations does not monitor or verify this list but includes it here as a reference for the public: UC Berkeley Labor Center Inventory of US City and County Minimum Wage Ordinances

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