Thursday, March 08, 2007

Reading for Anti

There's a good op-ed over at the New York Times weighing the merits of minimum wage against the earned income tax credit.


Anti-Everything said...

I understand the argument, and to a point I agree. The problem is that no matter how well funded the Earned Income Tax Credit program is that not enough people know about the program to take advantage of it, especially those who are actually working for minimum wage to support their families. Basically a lot of people simply pay attention to what they actually receive in thier pay checks and not to what government programs are available to them.

My suggestion would be to create a two tiered minimum wage system. Require those who are claimed as dependents to stay at the current minimum wage and those who are not claimed as dependents to receive a higher minimum wage. This should cancel the old argument that we are raising the wages of suburban teenage kids.

xtrachromosomeconservative said...

I agree with the notion of a two-tiered system, though for a different reason, to keep high school kids from opting in to the work force before completing their education.

The basic problem with minimum wage, to the extent there is a sizable hike is the disemployment effects. You don't run into them with the eitc. The issue you cite I consider a nonissue. The process to get the EITC is really straightforward, you can do it on your W-2, and this is evidenced by high participation rates. I think its simply a superior anti-poverty tool.