Sunday, May 16, 2004

  Helping Low-Wage Americans – Wage Based Tax Credits: A New Solution to an Age Old Problem
The near-universal conclusion of decades of economic research is that minimum wage increases diminish total employment and destroy opportunities for entry-level employees. Moreover, most of the benefits associated with minimum wage hikes accrue to non-poor families. The EITC, in contrast, increases poor Americans’ income and work-effort, without destroying job opportunities. Despite these well-documented realities, impending national elections—coupled with the superficial appeal of minimum wage increases—will once again lure lawmakers into promoting one of our least effective anti-poverty programs. But there is a better way.

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