David Dayen flags a paper by UC-Berkeley economist Michael Reich that finds a budget impact from raising the minimum wage (which should render eligible for the reconciliation bill). The paper
found $65.4 billion per year in savings, through a combination of increased tax revenues on higher wages and reduced federal expenditures on safety net programs due to eligibility thresholds.
As Dayen points out, the federal savings are not in themselves something to cheer about:
Increased taxes on higher wages still put a worker out ahead, to be sure. But reductions in federal benefits could create a treadmill effect, with the government taking away what the private sector is forced to pay out. As $15 an hour isn’t really a living wage in much of the country, clawing back benefits isn’t a perfect scenario.
One of the benefits that some people will earn themselves out of as the minimum wage rises is Medicaid. Eligibility for Medicaid as expanded by the ACA is offered to adults with incomes up to 138% of the Federal Poverty Level ($1,468 per month for an individual, $1,303/month for a family of four). To date, 38 states plus D.C. have enacted or will soon enact the expansion, with the last two of those, Oklahoma and Missouri, scheduled to expand eligibility in July of this year.)
