A Win-Win for Working Families and State Budgets: Pairing Medicaid Expension and a $10.10 Minimum Wage

Rachel West and Michael Reich

Chapter Chapter 11 in The Unexpected Economics of Minimum Wages, 2025, pp 283-316 from Edward Elgar Publishing

Abstract: How do minimum wage increases affect expenditures on means-tested public assistance programs? At a time when concern over income inequality is growing - and there is contentious debate about government deficit spending - the possibility that a higher minimum wage may affect public assistance spending holds great relevance for both the public and policymakers. This possibility is particularly salient in the 24 states that have not expanded Medicaid under the Affordable Care Act, or ACA, as of January 2014. In this paper, we suggest a strategy whereby states can simultaneously expand health care, boost the income of working families, and generate savings in their state budget by raising the minimum wage in conjunction with expanding Medicaid. Higher minimum wages will boost income among struggling working families. Medicaid expansion will lead to wider health care coverage, as well as a reduction in the number of uninsured and the significant public costs associated with the care of the uninsured.

Date: 2025
ISBN: 9781035358878
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