Increasing the minimum wage will decrease enrollment and costs associated with programs like the Supplemental Nutrition Assistance Program (or SNAP, commonly referred to as food stamps) for Arkansas taxpayers. Two proposed minimum wage increases, a state increase to $8.50 and a federal increase to $10.10, could both trigger savings. Recent research indicates that even a modest increase in the minimum wage could decrease national SNAP expenditures, and an increase to $10.10 would save taxpayers $4.6 billion a year nationally.[i]
Last year over half a million people in Arkansas participated in the SNAP program, or about 17 percent of Arkansans.[ii] The Institute for Research on Labor and Employment estimates that Arkansas enrollment in the program would fall by about 35,000 people if the federal minimum wage is increased to $10.10. This would save around $55 million dollars in SNAP expenditures in our state each year.[iii] In fact, recent research indicates that raising the federal minimum wage to $10.10 would cut SNAP enrollment and costs in all states.[iv]
Except for some very small businesses, employers in Arkansas are required to pay the federal minimum wage of $7.25 instead of the state minimum.[v] Because Arkansas’ minimum is currently below the federal line, a federal minimum wage increase to $10.10 would essentially increase Arkansas’s minimum wage by about 40 percent. To qualify for SNAP in Arkansas a family of four must have a combined household income of less than $31,005 per year, and in 2013, the average benefit for Arkansas households participating in SNAP was $3,260 for the year.[vi] ,[vii] A significant increase in the minimum wage means that hard working families would have a realistic chance at making ends meet without relying on programs like SNAP to keep their families from going hungry.