Measure 25 and Food Stamps

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Measure 25 and Food Stamps

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Increasing the minimum wage will not reduce access to food stamps

Measure 25 and Food Stamps

Measure 25 would increase Oregon’s minimum wage from $6.50 per hour to $6.90 per hour as of January 1, 2003, and then adjust the wage annually to keep up with inflation. Some people have asked whether the increase will put food stamp benefits at risk and harm those the minimum wage increase is trying to help.

The concerns are unfounded. Measure 25 will not put food stamps at risk or harm those the measure is trying to help.

In response to Oregon’s rank as likely the hungriest state in the nation, and because of advocacy by anti-hunger and anti-poverty groups, Oregon expanded its definition of who is eligible for food stamps. Essentially, everyone in Oregon with incomes up to 185 percent of poverty (the federal poverty income guidelines) remains eligible. Federal rules generally limit eligibility to 130 percent of poverty.

If Measure 25 is enacted, even single people working full-time at minimum wage will be eligible for food stamps, just as they are today. The federal poverty guideline is based on total family income and family size, not hourly earnings (see table).

The poverty guidelines are adjusted each year for inflation. Because the food stamp income limits are tied to federal poverty guidelines, they too increase each year. Measure 25 would allow the minimum wage to increase with inflation, just like the food stamp income limits. Thus, as the minimum wage increases each year under Measure 25, the income limits for food stamps will increase, as well.

Measure 25 will undoubtedly increase the earnings of more than just minimum wage earners. Previous research by the Oregon Center for Public Policy showed that workers at the 10th and 15th percentile of the wage distribution experienced real wage gains, after adjusting for inflation, with each of the three phases of the minimum wage increase stemming from the 1996 initiative. As these workers’ incomes increase under Measure 25 some of them will see a decline in food stamp benefits, and some may even lose their eligibility for food stamp benefits altogether. However, even when food stamp benefits are reduced, raising a person’s income puts the person in equal or better standing. When people reach the cap on food stamp income eligibility their food stamp benefits are so low (the minimum food stamp benefit is $10 per month, which equals 6 cents an hour) that the “cliff” of lost benefits will easily be offset by the increased income.

Many low-income working Oregonians who will benefit from Measure 25 are not enrolled in the food stamp program. The most recent analysis from the U.S. Department of Agriculture (USDA), the federal agency responsible for the food stamp program, showed that only about two-thirds of eligible people (66%; error range was 59% to 72%) were enrolled in the food stamp program in Oregon, slightly better than the national average (57%; error range was 56% to 59%). The $10 per month minimum food stamp benefit level for those near the income limits deters some people from applying.

Finally, the Oregon Department of Human Services (DHS) was unable to calculate any significant “savings” in administrative costs (food stamp benefits are 100% federal funds; one-half of administrative costs for determining eligibility, etc., are paid for by the state) due to fewer families being eligible for food stamps. In fact, DHS was unable to calculate any savings in public assistance programs resulting from people losing public assistance benefits due to Ballot Measure 25.

2002 Federal Poverty Guidelines for the 48 Contiguous States and the District of Columbia

Number in Family

Gross Yearly Income

Gross Monthly Income*

Approximate
Hourly Income**

1 $8,860 $738 $4.26
2 $11,940 $995 $5.74
3 $15,020 $1,252 $7.22
4 $18,100 $1,508 $8.70
5 $21,180 $1,765 $10.18
6 $24,260 $2,022 $11.66
7 $27,340 $2,278 $13.14
8 $30,420 $2,535 $14.63
Over 8 add
for each child
+$3,080 +$257 +$1.48

Source: Federal Register Vol. 67, No. 31, February 14, 2002, pp. 6931-6933. Monthly and hourly data calculated by OCPP.
*Rounded to the nearest dollar.
**Assumes a full-time job for a full year (2080 hours)

OCPP

OCPP

Written by staff at the Oregon Center for Public Policy.

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