Higher wages could make low-wage earners less reliant on government help

If it’s not painfully clear yet, the battle over raising the minimum wage — in Missouri and nationally — is long from over.

On the same day that the Kansas City Council voted to incrementally increase the minimum wage, Hillary Clinton told BuzzFeed that she would not back efforts to raise the federal minimum to $15 an hour while also saying that she supported such city-by-city efforts. A rival seeking the Democratic nomination for president, Bernie Sanders, seized on Clinton’s waffling to state his full support for a $15 federal minimum.

One fear of raising the minimum wage is that it would inadvertently harm a family’s eligibility for state benefits because so many low-wage earners currently subsidize their budgets this way.

By keeping wages low, some businesses operate on a model that expects taxpayers to pick up the slack. Income guidelines for such programs need to be modernized and restructured.

Self-sufficiency for those families is the goal. The fear is of trapping people in a no man’s land where they earn too much to qualify but not enough to meet household needs.

For Missouri, those questions have been answered, at least from one view. “Pathways Out of Poverty: Higher Wages and Targeted Benefits Create Needed Opportunities” is a joint report by Empower Missouri and Vision for Children at Risk.

The main findings:

▪ Even if the minimum wage is raised to $15, an adult with one child would continue to be eligible for the earned income tax credit.

▪ Families will not lose the benefit of the child tax credit, even if the minimum wage is raised as high as $15 an hour.

▪ Missouri’s MO HealthNet for Kids program protects children if the minimum wage is raised.

▪ Boosting the minimum wage would mean that many currently uninsured adults would become eligible for insurance subsidies.

▪ Missouri’s public health insurance program generally assures pregnant women health coverage. Raising the minimum wage does not change this.

▪ Supplemental Nutrition Assistance Program benefits, or food stamps, are an incentive to earn more because increased earnings more than offset the loss of SNAP benefits.

▪ An increase in Kansas City and St. Louis will not deny children the benefit of free and reduced price lunches. Both public school systems feed all students without regard to income.

▪ Families receiving benefits through federal Women, Infants and Children programs won’t be affected by raising the minimum wage to $15 an hour unless the federal poverty level declines by 2020.

The report also says that Missouri’s inadequate, unrealistic child care subsidies can be — and should be — fixed and that reimbursement rates to child care providers should also be modernized so parents aren’t punished for improving their wages.

This story was originally published July 16, 2015 at 8:30 PM with the headline "Higher wages could make low-wage earners less reliant on government help."