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A Higher Minimum Wage Could Mean Fewer People in Jail

The easier it is for those released from jail in Indiana to support themselves legitimately, the less likely it is that they will return to committing crime and end up back in jail. Part of that could be a higher minimum wage and increased earned income tax credits (EITCs), according to a recent study by Clemson University economics professor Michael Makowsky and Amanda Agan, an economics professor at Rutgers University.

They estimate that for every dollar the minimum wage increases, there is a one percent decrease in those going back to crime after being released from incarceration. There’s a bigger impact in states where earned income tax credits wage subsidies are available, though only for women.

Most of the discussion on the minimum wage and whether or not it should increase focuses on whether the economic benefits outweigh the probable decrease in jobs due to higher costs. Makowsky looked at the issue and its impact on crime and the recidivism rate. The study included a review of records of almost six million criminal offenders released from prison between 2000 and 2014, as well as the more than 200 state and federal minimum wage increases and earned income tax credit programs in 21 states.

Those who were released where the minimum wage was raised had a lower recidivism rate. In states that subsidize wages of adults with custody of dependents with tax credits, women experienced an 11.4% decrease in recidivism. An estimated 600,000 men and women end their incarceration each year nationwide. About 17% of them come back to prison in a year, and 35% return within three years.

Makowsky says having a criminal record can be a significant problem for someone seeking a job, which impacts their lifetime earnings. That record can be the difference between trying to make money through a legitimate job or by committing crime.

The decreases in recidivism were just for those involved in property or drug-related crimes. Violent crime remained largely unchanged no matter the minimum wage or tax credits. Makowsky stated these economic issues don’t appear to impact a person’s tendency to be violent.

The study shows recidivism is impacted by small boosts in the minimum wage, but it’s not clear what effect, if any, larger increases would have on the number of those staying out or returning to prison. Makowsky says with large minimum wage increases the labor market changes fundamentally, because if an employer needs to pay something like $15 an hour, those with a criminal record will find it harder to get hired or be more likely to be one of the first ones laid off. In this situation there may be fewer options to earn an income legally, and taking a risk on returning to crime may look more attractive.

Church, Langdon, Lopp, Banet Law has faithfully served the people and communities of Indiana for several years in a variety of criminal defense cases and will help you create a strategy that gives you the chance for the best possible outcome. With offices in New Albany and attorneys who are licensed to serve the Kentuckiana area, we have the knowledge, experience and resources to help. To ask a question or set up a consultation, call our office at 812-725-8224.

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