Compared to other “developed” countries, the U.S. experiences a shocking disparity in wealth amongst its population. The official 2020 poverty rate, as recorded by the U.S. Census, was 11.4%. But existing above the poverty line hardly guarantees comfort. Poverty status is determined by comparing pre-tax income against three times the minimum cost of food in 1963. No other calculations, just food from 1963. Currently, seven out of ten Americans live paycheck to paycheck. Even before the pandemic took off, a third of families in the United States could not afford an unexpected $2,000 expense. It’s clear that in the year 2022, being above the poverty line is not enough to live. The negative effects of financial insecurity permeate every aspect of a person’s life in the United States. Financial insecurity quickly leads to high rates of housing instability, food insecurity, and lack of access to basic health services. In a society that criminalizes being poor, without these necessities, poverty too often leads to incarceration.
Ongoing economic disparities, highlighted by the Covid-19 pandemic, have led to a steadily growing labor movement in recent years. The continued failure of the federal government to secure a liveable wage directly contradicts the intent of the Fair Labor Standards Act (FLSA)—to establish a minimum living standard for employees and their families. The original federal minimum wage was meant to ensure a “decent standard of living” for all workers. In his speech on the National Industrial Recovery Act, President Franklin D. Roosevelt clarified the purpose of a minimum wage explicitly. The federal minimum wage was enacted to ensure a standard that meant more than a “bare subsistence.” In 1938 that translated to 25 cents an hour. The current federal wage has not been raised since 2009 and reflects $15,080 a year, if working full-time. With a federal minimum wage that doesn’t even cover a third of an average state’s liveable income and a median salary that barely makes ends meet, many Americans find themselves in incredibly difficult financial situations compared to the once promised “decency” standard.
The correlation between income and mass incarceration has long been documented. Poverty makes people more susceptible to being arrested, more likely to be charged with a serious crime, and more likely to receive a harsher sentence. And because of who is statistically most likely to suffer from poverty, the correlation between insufficient wages and incarceration disparately affects Black, Indigenous, and People of Color (BIPOC) communities.
Research conducted by the Brookings Institute in 2018 demonstrated that 56 percent of people incarcerated had no annual income (less than $500) during the two years preceding their incarceration. Drug offenses account for the incarceration of nearly half a million people. Though substance use disorder and poverty are believed to perpetuate each other, data shows that recovery from addiction is less likely for people in poverty. According to SAMHSA, lack of health insurance and lack of funds are common reasons why people who recognize they need treatment for a substance use disorder do not enter a rehabilitation program. In 2016, the Council of Economic Advisers conducted a study that found increasing minimum wage reduces violent crime and crimes committed by adolescents. The Council’s study showed that a 10 percent increase in wages for non-college educated men reduces the crime rate by 10 to 20 percent.
Advocates for raising the minimum wage, or aiming even higher for a universal base income, argue—backed by statistics—that crime rates decrease when people’s financial needs are met . A person is less likely to be incarcerated if they do not experience financial insecurity. Logically, the long-term solution to mass incarceration is to ensure that less people experience financial insecurity.
How to fix the negative correlation between financial security and incarceration? The simple answer: pay people enough to live.