As states across the country work to boost their minimum wages, the policies could have an unintended side effect: Helping turn people away from a life of crime.
A new working paper from researchers at Rutgers University in New Jersey and Clemson University in South Carolina examined how higher minimum wages and the availability of state-based Earned Income Tax Credits influence recently released prisoners. Their findings point to how instrumental economic policies can be in reducing the rates of recidivism — that is, the likelihood of reoffending.
The average minimum wage increase of 50 cents reduced the probability that men and women would return to prison within a year by 2.8 percent, the paper found. The researchers further argued that drawing former criminals toward legal employment helped offset potential reductions in hiring caused by a higher minimum wage.
Here were some of the reports other findings:
- The average minimum wage hike decreased the probability of someone returning to prison within three years by 2.25 percent.
- A higher minimum wage did not reduce recidivism rates for all types of crimes. The researchers found that higher wages reduced the number of property and drug crimes — the crimes most commonly associated with people returning to prison.
- Increasing the minimum wage had no effect, however, on violent crimes. “High minimum wages do not reduce ‘crimes of passion,’ but do reduce potentially income-generating crimes,” the researchers wrote.
- A 5-percentage-point increase to state versions of the EITC was as effective at reducing three-year recidivism rates for women as a 50-cent increase in the minimum wage. Changes to that tax credit did not reduce the likelihood that men would return to prison.
Because the researchers only analyzed data from 2000 to 2014, they did not capture the effect of the $15-an-hour minimum wages that have gone into effect in recent years. Those much-higher minimum wages have prompted concerns that they’ll lead to companies automating more jobs.