Low-Wage Employers Are the Real ‘Welfare Queens’

The federal minimum wage of $7.25 is now worth 30 percent less than it was in the 1960s, after adjusting for inflation. It is quite literally a poverty wage — if you support a child, working full-time at the federal minimum will land you $650 below the federal poverty line; supporting two kids will put you more than $4,000 beneath it.

We’ve noted before that low-wage employers shift some of their labor costs onto the backs of taxpayers by encouraging their workers to apply for public benefits. These employers are the true “welfare queens,” their profits indirectly subsidized by the public, which allows them to keep prices artificially low. We’ve argued in the past that this is one of several reasons why conservatives who oppose spending on the social safety net should favor raising the minimum to a point where workers can get by on their own labor.

A report released this week by the Economic Policy Institute quantifies just how much taxpayers would save by raising the minimum wage to $10.10 per hour, as Barack Obama has proposed. The full report can be downloaded at the Economic Policy Institute’s website. Here’s an infographic that summarizes its findings..