Press Release
February 25, 2021
AAF President Douglas Holtz-Eakin Testifies on the Social Safety Net and the Labor Market
In testimony before the Senate Budget Committee this morning, AAF President Douglas Holtz-Eakin discusses the interaction between the social safety net and the labor market.
His central points:
- The most recent data suggest that up to 1 in 5 workers receive federal aid in the form of either Medicaid or Supplemental Nutrition Assistance Program (SNAP);
- It is a mistake to assume that these facts imply that firms are subsidized by the taxpayers, as the economics indicate the opposite – the presence of the social safety net forces firms to pay higher wages; and
- Raising the federal minimum wage significantly at this time would be a dramatic policy error.
