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LA's higher minimum wage could reduce reliance on social programs, study finds
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A UC-Berkeley study found that when the minimum wage goes up, food stamp participation rates go down.
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The L.A. City Council has voted to increase the minimum wage to $15 an hour in Los Angeles by 2020 — a move that could reduce reliance on social safety net institutions.
Researchers from UC Berkeley looked at past instances of minimum wage increases at the state level. Here's what they found:
- Food stamp benefits go down when the minimum wage goes up. "For each dollar increase in workers' wages, they see a 30 percent decrease in the value of food stamps that they receive," said Rachel Walker, an analyst at the left-leaning Center for American Progress, who helped on the study.
- State spending on food stamps also went down about 2 percent for every 10 percent increase in the minimum wage.
- With medical insurance programs, they found people may shift from one program to another, but don't see a change in their care. "So it's a clear win for the worker," Walker said.
- The group did not look at housing assistance programs like Section 8 and public housing. Walker said those programs are so over-taxed — with only a fraction of those eligible actually receiving assistance — that they're unlikely to see any real impact.
Food stamp program participation in California has climbed steadily over the past 10 years. As of February, about 4.4 million Californians were participating in the Supplemental Nutrition Assistance Program.
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