Raising the federal minimum wage would save the government billions and have sweeping benefits for low-income families, according to a new analysis by the Economic Policy Institute, a think tank focused on labor issues.

EPI's report found that if the minimum wage were boosted from its current level of $7.25 per hour to $10.10, as proposed by the Fair Minimum Wage Act of 2014, more than 1.7 million Americans would no longer have to rely on public assistance programs. This would produce $7.6 billion per year or more in savings for the federal government, according to the study.

Millions of Americans, known as the "working poor," are unable to lift themselves above the poverty line despite working full-time, minimum-wage jobs. Increasing the minimum wage to $10.10 would mean that many of these people wouldn't have to rely on additional public subsidies to make ends meet.

Currently, half of all people earning under $10.10 per hour, roughly 11.9 million Americans, receive some form of means-tested benefits from the government, like the Earned Income Tax Credit, food stamps and others.

Last year, EPI researchers estimated that raising the minimum wage to $10.10 would likely boost wages for 27 million American workers.

The federal minimum wage has not been raised since July 2009. The Fair Minimum Wage Act, which would gradually bump the federal minimum wage up to $10.10 over three years and peg future increases to the consumer price index, is currently stalled in Congress.

If the minimum wage had been pegged to the overall productivity rate of the U.S. economy since 1968, workers would be earning about $18.42 per hour today, according to the study.

EPI argues that the savings produced from a minimum wage hike should be reallocated to other underfunded social safety net programs that reduce poverty, rather than just reducing the budgets of the programs that saved money.