The Democratic Daily on the EITC and the Minimum Wage

In following up on various comments that I made on other blogs regarding my position that an expansion of the Earned Income Tax Credit (EITC) would be a more effective and equitable way of helping the working poor than raising the minimum wage, I encountered a fairly hostile forum host at The Democratic Daily. I've already posted a blog entry narrating the hostility that I encountered there. The present blog entry is intended as a discrete and separate followup post in which I put aside the personal attacks that I encountered at The Democratic Daily and respond to the merits of the arguments that the editor and assistant editor of The Democratic Daily put forth. To wit, the editor of The Democratic Daily wrote:

"You are completely discounting that people that make minimum wage DESERVE to make more. ¶It's a crime to pay anyone $5.15 an hour these days. . . ."

How much people "deserve to make" is at best irrelevant to the issue of whether an expansion of the Earned Income Tax Credit would be a more effective way of helping the working poor than raising the minimum wage. If someone makes minimum wage and the EITC raises their standard of living above the poverty level, that's a whole lot better than being unemployed. The latter situation is the one in which unskilled and uneducated workers usually find themselves when the minimum wage is raised and the economy subsequently goes down the toilet.

The editor of The Democratic Daily also wrote:

[C]onservatives love to float the idea that so many people aren't taking the EITC, in their argument against raising the minimum wage.

This is a fallacious straw man argument. To wit, what conservatives say about the EITC and why they say it is irrelevant to my position, which is that the EITC should be expanded in lieu of raising the minimum wage. The reason that I brought up the fact that so many EITC benefits go unclaimed is because I believe that it demonstrates what a well-kept secret the EITC is.

The editor of The Democratic Daily also wrote:

"If I am not mistaken, if a spouse is working that automatically disqualifies the other spouse for the EITC unless the couple doesn't file jointly. . . ."

She is, in fact, mistaken. The only way that a married couple can claim the EITC is by filing jointly. I might add that when a married couple claims the EITC, the phase out thresholds are increased by $2000.00 above single parents.

The assistant editor of The Democratic Daily wrote:

"For the EITC to be really meaningful there would also have to be a major expansion beyond what anyone in Congress is actually considering. In theory this may be possible, but at the present only an increase in the minimum wage is actually under consideration."

In other words, even though expanding the EITC is a much more effective and equitable way of helping the working poor than raising the minimum wage, it's much easier to pass a largely symbolic and potentially counterproductive increase in the federal minimum wage. To wit, according to the United States Department of Health and Human Services:

"Most research suggests that moderate minimum wages increases do not reduce poverty rates. [Italics emphasis in original.] . . . [M]inimum wage hikes increased poverty exits but also increased the probability that previously non-poor families entered poverty. . . . Overall the tradeoffs created by minimum wage increases, more closely resemble income redistribution among low-income families than income redistribution from high-to-low-income families."