White House economists said that raising the minimum wage to $12 an hour by 2020 would reduce crime by 3-5 percent, saving US taxpayers up to $17 billion.
President Obama’s Council of Economic Advisers (CEA) made the declaration in a report on criminal justice reform published this weekend. Jason Furman, the CEA chair, said Monday that reductions to crime would still occur even if a higher wage floor were to impact the unemployment rate.
“Labor market conditions and increased educational attainment can have large impacts on crime reduction by providing meaningful alternatives to criminal activity,” the CEA report stated.
The analysis was published to explore “economic perspectives” on the United States’ world-beating incarceration rates.
Alongside its labor market analysis, the CEA concluded that increased expenditures on law enforcement would reduce more crime with more “net social benefit” than Drug War-era sentencing.
In that vein, Furman said more outlays on policing should not result in more cops being ordered to enforce “tough on crime” laws–those that carry high sentences for violations. He said the prison population has sharply increased over the past few decades despite—and not because of—a simultaneous reduction in crime rates.
“There’s lots of debate among economists on exactly what it was,” Furman said, referring to causes of lower crime rates. “The one thing that pretty much all the evidence agrees on is what it wasn’t. And that is the increase in incarceration.”
Furman noted that the US spends $80 billion per year keeping people behind bars, and that “there are 11 states that spend more on corrections than on higher education.”
Congress last considered raising the minimum wage in 2014. Senate Republicans, then in the minority, were able to block legislation that would have increased the wage to $10.10, from $7.25 an hour.
