The Impact of Local Minimum Wage Increases on Child Support Payments Among Low-Wage Noncustodial Parents

Background and Purpose: By 2010 in the United States, approximately 11.3 million cases owed over $110 billion in back child support. Among those, Washington State had 313,463 that owed over $1.8 billion. The level at which a child support obligation is set often relies on information regarding the ability of the non-custodial parent to pay, but may not account for the uncertainties involving wages and workforce participation that can occur for the lowest paid workers. The key question of this paper is whether a minimum wage increase at the local level, particularly Seattle’s minimum wage increase begun in 2014, helps low-wage, non-custodial parents make child support payments. Social work advocates favor increasing the minimum wage because higher pay rates could offset the cost of basic needs for financially vulnerable individuals and families, and possibly decrease reliance on public assistance. Positive findings from this study could support such drives.

Methods: Using Washington State administrative data sets from 2010 through 2017, I examine nearly 5,000 low-wage, non-custodial parents, all of whom with active child support orders around the time of a local minimum wage increase. As a longitudinal cohort study, I compare non-custodial parents who worked in jurisdictions subject to local minimum wage increases to those who did not.

Results: For this cohort of low-wage earning, non-custodial parents, the average hourly wage was $12/hr (s.d. $2/hr) with a median at $11/hr. For over 50% of the quarters worked, these parents’ hourly wages were within $2 of the local minimum, and in no quarter did their wages exceed $19/hr. The average monthly child support order was $203 per month (s.d. $111), with a median of $187. The average child support payment, however, amounted to $98 per month (s.d. $129), with a median of $0, reflecting the divide between the level at which the order is set and the amount paid towards that order, particularly among low-wage workers. While exposures to higher minimum wage rates varied over the 8 years of the study, 28% of this cohort worked at least some time in a jurisdiction that saw a minimum wage increase above the state minimum. When working in jurisdictions with higher minimum wage levels, workers made higher child support payments: $199 per month on average when working in jurisdictions with higher minimum wages compared to $128 per month otherwise.

Conclusions and Implications: While many factors influence consistent and full child support payments, results in this study suggest that payments could be bolstered whenever low-wage workers are employed in jurisdictions that see an increase in the local minimum wage. These results could add additional support for an increase in the federal minimum wage, and by extension, possibly benefit families that rely on child support.