The Problem with Minimum Wage Laws
To be clear: The effectiveness of the EITC is not in doubt, and most people seem to agree that giving the working poor a break on their income taxes is a GoodThing(TM). However, the dialogue reaches an impasse when an advocate of the minimum wage asserts that a raise in the minimum wage would put more money in the hands of the working poor than the EITC ever could. Of course, this begs the same question that was asked of me, "Where's the money going to come from?"
In an article published on the Slate website on July 9, 2004, Steven Landsburg convincingly argued that there's less and less empirical evidence to suggest that raising the minimum wage will hurt minimum wage workers. Indeed, as a general rule, an increase in the minimum wage will be very effective at transferring wealth from employers to employees. However, the problems with this transfer of wealth are the facts that (1) over two-thirds of minimum wage workers are not living in poverty and (2) the financial burden of helping the working poor is placed on a very small group of people -- i.e., their employers.
"If you want to transfer income to the working poor, there are fairer and more honest ways to do it. The Earned Income Tax Credit, for example, accomplishes pretty much the same goals as the minimum wage but without concentrating the burden on a tiny minority. For that matter, the EITC also does a better job of helping the people you'd really want to help, as opposed to, say, middle-class teenagers working summer jobs. It's pretty hard to argue that a minimum-wage increase beats an EITC increase by any criterion. ¶The minimum wage is nothing but a huge off-the-books tax paid by a small group of people, with all the proceeds paid out . . . to another small group of people."
If you want to learn more about labor law check out the web for legal advice or if you feel like you have a case against a former employer the internet can help you find the best employment lawyer for your situation.