Friday, June 30, 2006

Morality and the Minimum Wage

JML writes:
Your post is written as though the two programs cannot effectively work in tandem. It is quite possible to increase both the minimum wage and the EITC.

. . . I find it immensley immoral for a worker to be paid a wage so low that he cannot afford basic necessities when working full-time.
What about volunteers and interns? According to your personal moral views, they too should be paid a wage that allows them to afford the basic necessities of life.

JML also writes
Reading into the views held by recipients (or potential recipients) of the EITC, one is left with the distinct impression that recipients consider the EITC a handout. A higher wage brings a more content, more productive worker and member of society. The EITC is a brilliant concept but cannot quickly reverse the view deeply held by so many Americans that an hour worked should mean an hour paid.
I've spoken to quite a few people who receive EITC benefits, and not one of them considers it a handout. Rather, EITC benefits are perceived to be a tax break that people earn by working, thus allowing them to become more self-sufficient and avoid the stigma associated with food stamps and other entitlement programs.

In speaking to people who currently receive EITC benefits, I was astonished to find that many of them are making much more than the minimum wage and but for the EITC would still be living in poverty and would need to apply for food stamps and other entitlement programs. In striking contrast, more than two thirds of those earning minimum wage are not living in poverty. Moreover, raising the minimum wage also raises wages for union workers whose contracts with employers are tied to the prevailing minimum wage. Thus, what I find immoral is the fact that the minimum wage is a huge off-the-books tax that transfers income and wealth from employers to low wage and union employees who are not living in poverty rather than helping the working poor, which is (presumably) what the minimum wage is supposed to do.


Blogger jj mollo said...

Your first response to JML is, I think, pedantic. Volunteers and interns are obviously in a different class. There is no reason they shouldn't be paid the same as the lowest paid workers, but we are not expecting them to get a living wage in ten hours that would normally take 40 hours to earn.

I agree with your second observation, however. I don't think that very many people consider this to be a handout. In fact that is one of the original selling points of the "negative income tax".

12:23 PM, July 03, 2006  

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