Thursday, June 29, 2006

Reactionary Ideologues and the Minimum Wage Debate

Democratic leaders in congress have made significant hay over the last week by stating their intention to block cost of living pay increases for congress unless and until congress raises the federal minimum wage. Since I had already engaged some advocates of raising the federal minimum wage over at David Sirota's Working for Change website by asking them about their position on the Earned Income Tax Credit, it seemed to be a natural progrssion to engage other bloggers with the same question. To that end, I visited the Google Blog Search Beta, entered the term "minimum wage," visited a number of the blogs where the issue was under discussion and asked:
What is your response to the position that expanding the earned income tax credit would be a more effective vehicle for helping the working poor than increasing the minimum wage?

The advantages of the Earned Income Tax Credit (EITC) seems to be a very well kept secret. Of those few bloggers who know what the EITC is and how it works, many still believe that a minimum wage law is necessary, . . . that somehow these two programs work in tandem to fight poverty. Well, I've looked high and low, and I have not found any evidence to support that position. Rather, in terms of fighting poverty, the EITC is highly effective because it puts more actual money into the hands of the working poor whereas the minimum wage is simply a huge off-the-books tax that redistributes wealth from employers to minimum wage employees. The EITC also reduces entitlement spending, provides a boost to the local economy from the bottom up, and increases labor force participation.

My venture into the blogosphere was a sincere attempt to figure out why people think that the minimum wage is a GoodThing(TM) when compared with the more effective alternative of the EITC, but I quickly found myself under attack from reactionary ideologues. Even so, I was able to find some common ground with the more intelligent posters at the Working for Change website, and most of the other blogs where I posted. Nonetheless, the rational discourse was cut short over at Democrats.com when I suddenly found my account disabled after making several posts. I suppose locking me out of the discussion is one way of making it look like they put me in my place.

2 Comments:

Blogger Litwin said...

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.

Additionally, I am someone who firmly agrees with you that the EITC is a far superior mechanism for delivering money into the hands of the working poor, but who also firmly believes that we should have a minimum wage in this country. 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. The meritocracy we pretend to live in here should BEGIN at the basic necessity level, not at the sidewalk. Now, those wages are the same regardless of one's life situation. That is where the EITC starts to really help. It can ensure that the single guy who doesn't need anything more to maintain the basic necessities is on his own, while the single mother of two can get a boost of a few thousand dollars each year to help pay for the added expenses of children. I agree that the EITC is too low in that the added expense of children is not properly compensated, but I nonetheless firmly hold the viewpoint that working Americans must be paid livable wages. This is accomplished through an effectively set minimum wage and corresponding enforcement.

8:30 AM, June 30, 2006  
Blogger Walker said...

I appreciated your comment on my blog, and can easily believe that the EITC adjustment may be a far better mechanism for helping the working poor, though I join jml in asking "Why not both?"

The point of my own post is that increasing the minimum wage is clearly an issue where the Democrats have huge majority support in the population at large, and it's easy to understand, which unfortunately cannot be said for your EITC proposal.

Thanks again for commenting.

11:35 PM, July 02, 2006  

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