A new report makes the case that greater purchasing power could go a long way toward alleviating hunger in the U.S.
For American families earning less than $40,000 per year, consistent access to food is far from a given. Food is a necessary expense, of course, but compared to housing and utilities, it’s a flexible one. On average, food comprises between 13.7 and 15.3 percent of a family’s annual expenditures in the U.S. But when budgets tighten for low-income families, hunger often follows. Around 17.4 million American families report inadequate resources to provide enough food to keep all members healthy and active. Rates of food insecurity skyrocketed during the Great Recession, and the economy’s slow climb back toward health has barely alleviated this concern.
While 15 domestic food and nutrition assistance programs currently exist to aid food-insecure families, a new report from The Century Foundation proposes a stronger foundation for that safety net: raising the federal minimum wage to $15.
For the past seven years, the federal minimum wage has held constant at $7.25 per hour. Following the model proposed earlier this year by David Norcross, a congressman from New Jersey, William Rodgers, the author of The Century Foundation report, examines the effects of incrementally increasing the minimum wage to $15 by 2023.
Rodgers’s analysis found that with the wage increase, approximately 1.2 million households could achieve food security between now and 2023. Those headed by single parents, minorities, and people with no more than a high-school degree—who make up the bulk of minimum-wage workers—would comprise the largest share of the 6.5 percent reduction in food-insecure households. As shown in the map below, the effects of the minimum-wage hike would be felt across all states.
To arrive at this conclusion, Rodgers pooled Current Population Survey Food Security supplement (CPS-FSS) data from 1995 to 2014 on two categories of states: those where the minimum wage matched the federal floor, and those where the minimum wage was just slightly above the federal figure—around $7.50 per hour. The states’ demographic profiles were very similar: the share of women and minorities was the same, as was the breakdown of educational attainment. The only substantial difference, Rodgers says, was the minimum wage policy—and those states where the minimum wage even just slightly exceeded the federal floor reported higher food security.
“The reasonable conclusion is that if the economy is the same and the worker characteristics are the same, higher food security is due to the additional purchasing power that these families have,” Rodgers says.
Rodgers’s predictive model for future wage increases reflects a similar trend. The CPS-FSS ascertains households’ food insecurity through a series of questions that ask residents to respond to statements like whether they “worried food would run out before we got the money to buy more.” The chart below shows the effects of a 10 percent increase in the minimum wage. Under these conditions, a household’s odds of never running out of food before earning more money go up by 0.773 of a percentage point.
According to the report, “the minimum wage increases can greatly reduce the plight of families who remain food insecure despite working significant hours.” Rodgers’s model indicates that even slight increases in purchasing power reduce the burden on families sometimes forced to make trade-offs between food expenditures and other necessities.
Moving these families from food-insecure to food-secure, the report added, will allow for a more efficient deployment of national food-assistance programs. Those could help meet the needs of food-insecure families working fewer hours, who would be “less likely to benefit from a minimum wage increase,” the authors wrote.
The $15 minimum wage is a hotly debated concept; a handful of states like New York and California have already enacted legislation in favor of it, and Arizona, Colorado, Maine, and Washington will vote on similar bills this November, The Atlantic reports.
In a sense, Rodgers says, the report is stepping into “uncharted waters” by re-examining a federal minimum wage untouched since 2009. But for the households that stand to benefit, he adds, “there’s an obvious payoff.”