The Minimum Wage and Crime Reduction

What happens when you ask the White House Council of Economic Advisors to study the cost/benefit of various crime reduction policies? You get data like this:

The authors consider a few ways of reducing crime. They forecast that hiking the federal minimum hourly wage from $7.25 to $12 would reduce crime by 3 percent to 5 percent, as fewer people would be forced to turn to illegal activity to make ends meet. By contrast, spending an additional $10 billion on incarceration — a massive increase — would reduce crime by only 1 percent to 4 percent, according to the report.

But wait…that’s not the end of the story. They also calculated the true social costs of crime. It totaled almost $308 billion in 2014. So a simple move like raising the minimum wage to $12 doesn’t only reduce crime by 3%-5%, it would save $8 to $17 billion a year.

I remember when part of my job was to try to convince legislators to invest in juvenile crime prevention. There were some who were easily convinced to do the right thing for fellow human beings. Others were moved by the economic argument. If you know anyone who needs the latter…there you have it.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly.