According to the CEC’s analysis, based on stats from the FBI, the Bureau of Justice Statistics and others, raising the minimum wage to $12 by 2020 would lead to a three to five-percent reduction in the crime rate. (Currently, the federal minimum wage is $7.25.) By contrast, dumping $10 billion into funding for incarceration would only cut the crime rate by one to four percent.
It isn’t exactly clear how the CEC arrived at its percentage points, but common sense supports the theory. Poor people have less money and fewer resources than rich people, and fewer opportunities to obtain money and resources. There is a well-established relationship between poverty and crime. A higher minimum wage would help more poor people get by without resorting to drug sales, theft, sex work, et cetera. Crime goes down.
The statistic comes from a larger report about criminal justice reform. Because these are the president’s economic advisors, they were focused on cost-benefit analyses of mass incarceration versus other, potentially more productive uses of the public money. Aside from the minimum wage statistic, they also found that spending more on education and hiring more police were both more effective on the whole at reducing crime than putting more people in jail for longer times.
America’s prison population rate is the highest of any country on Earth. That is a national failure and shame from an ethical standpoint, and according to this analysis, it is from an economic one, too. It’s expensive, and it isn’t even very good at keeping America safe. Stop punishing so many poor people. Give them more money instead.