Saturday, July 29, 2006

Tying the Minimum Wage to the Death Tax

As noted by blogger Ric James in a post at Hoodathunk?, the United States House of Representatives recently approved a bill that would increase the federal minimum wage with a provision that makes permanent the soon-to-sunset reductions in the so-called "death tax." The "death tax" is the name given to the tax imposed on inheritances received from multi-million dollar estates, and its current provisions provide for the gradual reduction of estate taxes to a rate of 45 percent and a complete repeal of the estate tax for the year 2010. Unless the current sunset provisions of these tax cuts are made permanent, as they were with the bill just passed by the House of Representatives, the estate tax would revert to its previous level of 55 percent in the year 2011.

Other things being equal, there will be no tax on the estates of people who die in the year 2010, giving potential heirs an incentive to keep their potential benefactors alive until that time. However, once the year 2010 arrives, there will be an incentive for potential heirs to hasten the death of the their potential benefactors before the year 2011. Of course, there are other factors at work. To wit, if the estate tax does not apply to inheritance, a capital gains tax might kick in.

Until now, the minimum wage had nothing to do with the estate tax, but the people who favor a permanent repeal of the estate tax have effectively married the fate of the minimum wage to the fate of the estate tax. There's a pretty good chance that the bill just passed by the House of Representatives won't go anywhere, but it's also pretty clear that any attempt to raise the minimum wage will also not be going anywhere unless and until the sunset provisions of the estate tax have been resolved. In other words, the Republicans in congress have effectively compromised the strategy of Democrats in congress to make the minimum wage a wedge issue in the November 2006 elections.

Truth be told, if your objective is to help the working poor, the federal minimum wage law is a red herring. To wit, proponents of raising the minimum wage will often cite the fact that someone working full time at minimum wage would be living in poverty, ignoring the facts that (1) very few people living in poverty actually earn at or below the minimum wage and (2) very few minimum wage earners actually live in poverty. Meanwhile, rather than pointing out these facts, opponents of raising the minimum wage will usually argue that the minimum wage causes unemployment, ignoring the empirical evidence which indicates that the minimum wage is not the big job killer that most economists believe it to be.

As I have pointed out on numerous occassions, an expansion of the Earned Income Tax Credit (EITC) would be a much more effective and equitable way of helping the working poor than raising the minimum wage. Indeed, while there is little empirical evidence to indicate that the minimum wage is actually a big job killer, all of this evidence is based on modest increases in the minimum wage that displace unskilled workers who have the most trouble finding low wage jobs when the economy goes south in favor of middle class teenagers and spouses. Moreover, while the evidence regarding the effectiveness of the EITC over the minimum wage as a poverty fighting measure is incontrovertible, many people will still argue that "we need both."

Whatever might be needed to help the working poor, an increase in the federal minimum wage is certainly not needed, as it does nothing to help the working poor. Moreover, as demonstrated by the recent bill passed by the House of Representatives, any proposal by the Democrats in congress to increase the federal minimum wage will almost certainly be poisoned by an amendment proposed by one of the Republicans in congress. Right now, it's the death tax; a couple of weeks ago, it was an anti-abortion measure. So, if you're going to have to compromise, why not ask for something that really helps the working poor?

Thursday, July 27, 2006

Targeting Big Box Retailers with Minimum Wage Laws

During President Clinton's tenure, state and local governments were given the right to pass their own minimum wage laws, and many of them have done so since 1996. While I stand opposed to minimum wage laws as a matter of basic principle, believing that the Earned Income Tax Credit (EITC) is a much more effective and equitable way of helping the working poor, state and local minimum wage laws are nowhere near as problematic as a law imposing a federal minimum wage. To wit, the minimum wage is a huge off-the-books tax, and state and local governments often use tax breaks to attract businesses to their jurisdiction. As such, state and local governments who impose their own minimum wage laws will put themselves at a competitive disadvantage, but that will not stop some misguided and/or corrupt politicians from passing state and local minimum wage laws, as is the case with a recent minimum wage ordinance passed by Chicago's City Council.

The recent minimum wage ordinance passed by Chicago's City Council adds a new wrinkle to the minimum wage debate in that it targets big box retailers such as WalMart. While the ordinance would probably affect as many as 38 retail locations currently in Chicago, it was apparently meant to target the first WalMart store scheduled to be opened in Chicago this September on Chicago's West Side, and it would almost certainly affect the expansion plans of other large retailers such as Target, Costco, Home Depot, and Lowe's. This has raised concerns about racial redlining of African American political districts, such as the one where the WalMart store is located. Of course, the ordinance has yet to be signed into law by Mayor Daley of Chicago, and the Illinois Retail Merchants Association has promised a court challenge of the ordinance.

The concerns about racial redlining are legitimate. Indeed, when the first minimum wage law was passed in the United States, some 500,000 African Americans lost their jobs and were replaced by more skilled and better educated White Americans. In addition to lost jobs, people of color in areas not serviced by big box retailers will have to pay higher prices for the goods that they purchase locally. Consequently, while the Chicago City Council voted 35-14 to pass the ordinance, the vote of 10-9 among the African American alderman on the council was much closer.

I am in Chicago as often as twice a month, and it has always struck me as being a town controlled by organized labor. As such, I wasn't the slightest bit surprised to find that many of the aldermen who supported the ordinance targeting big box retailers apparently did so because they were hoping to appease organized labor and avoid being challenged by well-heeled opponents in the next election. Spokane, Washington and Washington, D.C. are also considering minimum wage laws that target big box retailers, but the actions of the politicians in these towns can be attributed more to ignorance than cynical political posturing.

San Francisco, California (known locally as "The City") imposes all sorts of restrictions on retail establishments and chain stores, but there are few exceptions to its local minimum wage law. Even if that wasn't the case, the cost of living is so high in The City that it is virtually impossible for any retailer there to find anyone who will work for minimum wage. Rather, most of the people who work in The City make pretty good salaries and commute in from one of the outlying areas where the cost of living is more reasonable. Over the years, these hinterland areas have become economic powerhouses of their own, and people of modest means are moving ever farther out from The City to find affordable places to live.

Santa Fe, New Mexico has a local minimum wage law that targets retailers with more than 25 employees, which covers all but the smallest of retail businesses. Moreover, Santa Fe enjoys a monopsony because it has no suburbs where big box retailers might choose to open a location and it is geographically isolated from other metropolitan areas. Consequently, the local minimum wage law is an opportunity cost that must be paid by Santa Fe retailers.

Tuesday, July 25, 2006

Anti-Immigrant Propaganda in Hazleton and Elsewhere

Recent news reports about Hazleton, Pennsylvania have repeated the erroneous claim that Hazleton has suffered an increase in crime that can be attributed to a sudden influx of illegal immigrants. As I pointed out in a previous blog post, that ain't the case. To wit, the total amount of crime in Hazleton decreased significantly between the year 2000 and the year 2005 notwithstanding a signicant increase in the Latino population.

Even if the total amount of crime in Hazleton had remained more or less the same during that five year period when the population increased some 30 percent, that would have been remarkable. But it didn't increase. It went down. Some people have a hard time understanding that. And while there's no question that crime is down in Hazleton, I think this assertion begs the question of what actually constitutes crime.

The standard banal canard of xenophobes is that illegal immigration is a crime, but it's not, at least not at the present time. Illegal immigration is not a felony (like murder), nor is it a misdemeanor (like drunk driving usually is). Rather, "Improper Entry By Alien" is covered by Title 8, Section 1325 of the United States Code and "Civil Penalties for Failure to Depart" are covered by Section 1324d. While these code sections provide for penalties such as fines and incarceration, the maximum jail time for a first offense is six months, which would make these offenses comparable to a speeding ticket, what is commonly known in the law as "an infraction."

Under federal law, an infraction is not a crime; it is a civil offense. And in practice, very few people who are arrested for illegal immigration are ever convicted. They are usually booked and released. If and when they show up for their court proceedings, they are almost always able to choose to remove themselves from the United States voluntarily rather than being convicted of improper entry or failure to depart. A rough equivalent would be the choice to attend traffic school rather than have a traffic ticket appear on your driving record.

There are probably some 11 million people in the United States who are subject to arrest for improper entry or failure to depart. As a practical matter, it would be nigh on impossible to apprehend these people, so the federal government spends very little time doing so. Rather, there are token and selective enforcement efforts by the federal government that give the illusion that something is being done, much like the War on Drugs. And then there's the misguided enforcement efforts of towns like Hazleton. To wit, the penalties for improper entry and/or failure to depart the United States are the sole province of the federal government. As such, Hazleton will almost certainly find itself on the wrong end of a lawsuit in federal court any day now.

One of the other oft-repeated canards of xenophobes is that illegal immigrants place a burden on public services in the United States. That ain't true. As a group, illegal immigrants tend to be very poor, but they are much less likely to be living on the dole and/or using public services than American citizens of a similar socioeconomic status. To wit, according to an article appearing in the San Diego Union Tribune written by Douglas S. Massey of the Mexican Migration Project:
"Among some 2,100 undocumented migrants surveyed. . . , only 4 percent said they used food stamps on their last U.S. trip and just 3 percent said they received government welfare payments. In contrast, 60 percent said they had federal taxes withheld from their pay. Moreover, even though undocumented migrants are legally entitled to send children to U.S. public schools, only 11 percent reported doing so. Immigrants also are entitled to emergency medical care in the United States, but only 26 percent said they used a hospital on their last trip.

"[ . . . ]

"The usage rate for food stamps and welfare among illegal migrants has remained low at just 3 percent to 4 percent over the past two decades; but the percentage sending children to public schools fell from 12 percent during 1987-92 to just 7 percent between 1997 and 2002. Over the same period, the share using a hospital dropped from 30 percent to 20 percent. On the revenue side of the ledger, however, federal tax withholding rose from 60 percent to 67 percent.

"[ . . . ]

". . . From 1987 to 1992, . . . 60 percent of legal immigrants (emphasis added) surveyed . . . used a hospital but between 1997 and 2002 the share had fallen to 42 percent. Over the same period the percentage with children in U.S. schools fell from 35 percent to 19 percent, and food stamp usage dropped from 15 percent to 5 percent. Welfare usage remained roughly constant at 8 percent to 10 percent. Tax payments, meanwhile, rose from the already high level of 90 percent to reach 95 percent between 1997 and 2002.

"Among both legal and illegal Mexican migrants, the likelihood of filing a tax return – and thus having any hope of receiving a refund – has fallen in recent years. Between 1997 and 2002, . . . just 67 percent of legal immigrants and only 5 percent of undocumented migrants reported filing a federal tax return. In other words, all Mexican immigrants, but especially the undocumented, are likely to contribute to U.S. public coffers rather than take from them."

The Curmudgette Doth Protest Too Much, Methinks

The Blogging Curmudgette writes:
"I became aware that someone who commented on The Blogging Curmudgeon a while back was taking my inventory on his own blog. He's entitled but I think it is particularly telling that rather than respond to my response to his initial comment on my blog, where he started this exchange, he scurried back to his own blog to issue his retort without even alerting me."
As I stated previously, I had not yet gotten around to alerting the Curmudgette to my response. However, had I known how much it was going to aggravate her exaggerated sense of self-importance, I probably would have made a point of keeping her in the dark.

I often stumble upon people who are gossiping about me online. Indeed, I once had a hate site devoted to me that was operated by a former NSA operative, and I usually take such gossip as a compliment, tempered by the knowledge that such people are usually losers who have lives that are so mediocre and/or tragic that they must involve themselves in my life to give meaning to their own miserable existence. And after giving her a chance to prove me wrong, this is the same motivation that I now attribute to the Curmudgette.
"Oh how I hate passive aggressive bullshit."
Sounds like a personal problem, Curmudgette, but I think I can help you with it, if you don't mind me offering you some unsolicited advice. To wit, if your objective is to prove that you -- and I quote -- "So Do Not Have Time For This Shit," then all you have to do is make a decision to ignore me, and I will probably forget all about you in a couple of days.

Alternatively, you can take the high road and stick to questioning the merits of the position that I have taken regarding the Earned Income Tax Credit (EITC). To wit, I believe that the EITC is a much more effective and equitable way of helping the working poor than raising the minimum wage. To that end, I am only too happy to refer you to an earlier blog entry that I wrote entitled Damning the Earned Income Tax Credit with Faint Praise. And if you'd like to bring yourself up to speed on the issues, I would strongly recommend this paper published by the United States Department of Health and Human Services.

Now go, Curmudgette! And sin no more!

Monday, July 24, 2006

The Wrath of the Anonymous Heckler

In response to a recent blog post about the Wrath of the Blogging Curmudgette, an anonymous heckler asserted:
"You DID incorrectly use the phrase 'begs the question'. While it is true that the usage you employed has fallen into the common parlance, it is the mark of a pseudo-intellectual, of someone who wishes to sound 'edumacated'."
At the risk of descending into an even more pointless confrontation, I am compelled to bow to the absurd and engage this anonymous heckler on the issue of prescriptive vs. normative linguistics. While I'm at it, I might point out (once again) that the Blogging Curmudgette originally asserted that I had made a *GRAMMATICAL* error when using the expression "begging the question." I did no such thing. Assuming, arguendo, that I made an error, it was in choosing a turn of phrase that had an ambiguous or controversial meaning. However, I respectfully submit that since my word choice was intentional and that no one actually misunderstood me, I did not make an error of any kind. Rather, I was posturing in much the same way that I posture when I use the word "aint" or end a sentence with a preposition, the latter rule being one that is a prescriptive rule of Latin that has no relevance to English grammar, prescriptive or normative.

Knowing and intentionally ignoring the rules of polite society does not make me a pseudo-intellectual. Rather, by using normative linguistic rules, I am able to provoke and vanquish petty anonymous pseudo-intellectuals who engage in irrational argumentum ad hominem attacks and irrational appeals to authority while concomitantly pretending to cite prescriptive linguistic rules. I might add that the anonymous pseudo-intellectual heckler in question has failed to follow accepted standards for American English when using quotation marks and periods. To wit, he or she twice ended a sentence with a quotation mark followed by a period, and it is standard editing practice to move a period at the end of a sentence inside a closing quotation mark. Those who break this rule usually do so out of ignorance, dehrby demonstratun' dehr toetall lakk of edumucation and cultcha!!! Had the anonymous heckler in question been using British English, I would have excused his failure to observe normative rules of American English as a purposeful choice, but that wasn't the case.

Now go, anonymous pseudo-intellectual heckler! And sin no more!

Sunday, July 23, 2006

The Wrath of the Blogging Curmudgette

All too often, online discussions turn into pointless and contentious confrontations, and a recent exchange that I had with the Blogging Curmudgette has followed this path, apparently going from bad to worse. For those of of you who just tuned in, please allow me to recapitulate the events leading up to this latest pissing contest. . . .

After a prolonged period of relative silence in online discussions, I saw activist David Sirota on The Colbert Report, and I was motivated to post a blog entry about an idea that I had about taxing campaign contributions. In an effort to spread the good word, I eventually made my way over to David Sirota's blog and ended up engaging a number of Sirota's supporters on the issue of the minimum wage. In turn, this prompted me to explore the blogosphere and challenge advocates of raising the minimum wage with the position that expanding the Earned Income Tax Credit (EITC) would be a much more effective and equitable way of helping the working poor.

The Curmudgette was one of many people whose blogs I visited in an attempt to find common ground on the issue of how best to help the working poor. I didn't keep track of how many people responded to me or how they responded, but my guess is that the vast majority of people I engaged on this issue did not respond at all. Of those responses that came to my attention, some responded with comments or articles on their own blogs, others responded with comments on my blog, and still others responded by e-mailing me to ask for more information about the EITC. The Curmudgette responded with a comment on her own blog, and I eventually stumbled upon her response after dealing with the more high profile responses that I encountered. Now I'm beginning to wonder why I bothered.

To be sure, the Curmudgette demonstrated a somewhat commonplace smugnesss and ignorance in her original blog post narrating the efforts of Democrats in the Senate to tie the minimum wage to congressional pay raises. Not that I have any desire to raise the wages of our elected officials, nor do I believe that the Republican-controlled congress has any interest in helping the little guy, but the Curmudgette's attempts to villify and demonize wealthy people struck me as somewhat sophomoric. Even so, I thought that maybe, just maybe, she might be interested in my position that the EITC is a much more effective and equitable way of helping the working poor than raising the minimum wage.

When I made my way back to the Curmudgette's lair and discovered that she had responded to my brief comment with a lengthy and wandering diatribe, I decided to post a new blog entry. Posting a new blog entry allows me to break up lengthy and wandering diatribes into bite size pieces, eliminating issues that are irrelevant and focusing on issues where further discussion might provide clarification or help me find common ground with an adversary. In this particular situation, my objective was to redirect the Curmudgette to the subject of whether an expansion of the EITC would be a more effective and equitable way of helping the working poor than raising the minimum wage. However, the Curmudgette would have none of that:
"I was not changing the subject. I was addressing a key tenet of your position, as stated in the blog entry you linked to in your terse comment on my blog. As I said then, you did not provide the financial data to back up your argument, but you did make other assertions, which I disagree with."
Okay, I get it. The Curmudgette thinks that wealthy people are evil, heartless bastards, and that inequities in wealth and income can and should be legislated out of existence by raising the minimum wage. As for the notion that I should provide the Curmudgette with financial data to back up my argument, that ain't gonna happen, as she has already demonstrated her bias and her ignorance, and I am under no obligation to save her from either one.
"You are too cowardly a debater to bother with."
And yet, here she is, bothering with me. And what is the basis of the Curmudgette's conclusion that I am a cowardly debater?
"Rather than respond to my response to you on my blog, where you started this discussion by leaving a comment, you run back to your own blog where you distort my position and quote me out of context and do not have the courtesy to alert me to the fact that you have done so."
Please direct me to the manual of etiquette which says that I am obliged to continue a discussion on your blog. As for whether I was obliged to notify you of the post on my own blog, I hadn't yet gotten around to that, and if I were truly cowardly, I would have censored your comments rather than publishing them on my blog.
"Well, I found your 'response' and it is a disingenuous twisting of my meanings and an exercise in meaningless, verbal gymnastics."
This from the woman who incorrectly asserted that I had made a grammatical error in my use of the expression "begging the question"? I had no intention of hiding my response from the Curmudgette, and I find it laughable that she thinks she matters that much to me.
"Other people may be convinced by your lawyerly butchery of the English language, but I am not. Good day."
You'll be back here to comment again, or you'll post a response on your own blog. Your exagerrated sense of self-importance will compel you to do so. And if not, who really cares?

Immigration Politics in Hazleton, Pennsylvania

In a previous blog post, I pointed out that crime in Hazleton, Pennsylvania has decreased since the year 2000 even as the Latino population has increased by some 30 percent, thereby disproving the claims of Hazelton's mayor Louis Barletta that (1) there had been an increase in crime in Hazleton and that (2) that increase could be attributed to a sudden influx of illegal immigrants. Previously, I attributed Mayor Barletta's actions to the fact he is a demagogue who is pandering to the xenopohobia of his constituents, and while I haven't yet stated so on my blog, I expected that Barletta's euphemistically titled Illegal Immigration Relief Act would eventually prove itself to be vulnerable to various legal challenges that are currently in the works. What I did say was that such legal challenges stood little chance of changing the hearts and minds of the xenophobes who supported the passage of the Hazleton ordinance which nominally targeted illegal immigration.

While exploring the blogosphere for ongoing commentary regarding the status of the situation in Hazleton, I stumbled upon a Pennsylvania blogger who was discussing the background of an Associated Press (AP) story narrating the vulnerability of the Hazleton ordinance to a court challenge. Said blogger pointed out a detail that I had missed when reading the AP story previously:
"The [Congressional Research Service] completed its analysis on June 29, before the ordinance was approved. It was requested by U.S. Rep. Paul Kanjorski, a Democrat whose district includes Hazleton and who survived a challenge from Barletta in the fall 2002 election."
Said blogger also pointed out that Pennsylvania Governor Ed Rendell had weighed in on the merits of the Hazleton ordinance:
"'The only ones I want to hear speaking up and complaining about immigration are the Native Americans who we screwed,' Rendell said to a gathering of young professionals on Thursday."

Saturday, July 22, 2006

The Blogging Curmudgette on Minimum Wage Laws and the EITC Redux

The Blogging Curmudgette writes:
"I was responding to your proposition that it was an unfair burden on employers to pay an increased minimum . . . not the income tax credit, per se."
In other words, you were changing the subject. Fair enough. But my underlying proposition remains more or less intact. To wit: An expansion of the Earned Income Tax Credit (EITC) would be a much more effective and equitable way of helping the working poor than raising the minimum wage.
"Minimum wage laws are not simply a way to assist the working poor. They are about valuing work and insuring that people are paid a fair rate for the work they do."
With all due respect, this is pretentious polyannaish rhetoric. The only reason that anyone ever engages in an economic transaction is because they choose to exchange something that they already have for something that is of greater value to them -- i.e., value for value. When it comes to labor, the principle of value for value allows people to exchange their time for other people's money, and then (in turn) exchange that money for goods and services. By focusing on doing things that they can do more efficiently than other people, anyone and everyone can acquire their fair share of goods, services, and surplus wealth, other things being equal.

If my sole purpose in life were to accumulate wealth, I could easily make 100 times the amount of money that I currently make. However, I choose to do work that fulfills me as a person, and I often work for a greatly reduced rate of compensation. I also do quite a bit of pro bono and volunteer work. Granted, I have been more fortunate than many other people have been when it comes to work and educational opportunities, but I have had my lean times as well, and I am particularly well aware of the fact that some people get caught in economic situations from which there is little chance of escape, so I think that laws to help the working poor can be justified. However, minimum wage laws do nothing to help the working poor, since most of the people who are currently working for minimum wage are unskilled workers who will quickly gain marketable skills, and raising the minimum wage will simply price these unskilled workers out of an entry level job. As such, my position that an expansion of the EITC is a more effective and equitable way of helping the working poor remains intact.

On occasion, I will take inventory of my personal property and decide that there are things that I own that I once valued and that I no longer want, and I will decide that it is time to offer these things to someone else who might want them. However, I don't need the government to tell me what price is a "fair price" for these items. All I need to do is go to eBay and determine what value other people place on these items. I then determine whether it is worth my time and trouble to sell these items or whether I should simply donate these items to my favorite charity, which happens to be the local Society for the Prevention of Cruelty to Animals.

"Do you think we should suspend child labor laws, too? For that matter, why not get rid of speed limits. I'm sure drivers can regulate themselves just like the free market does."
Now who's being disingenuous? My position was and is that an expansion of the EITC would be a much more efficient and equitable way of helping the working poor than raising the minimum wage. Since the EITC is itself a government program, advocating such a position does mean that I wish to take us down the slippery slope of anarchy. (A logical fallacy on your part, I might add.) However, since you asked: I tend to think of the institution of government as nothing more than a protection racket, and I have never seen a situation so bad that government intervention could not make it worse, so given my druthers I would have no problem with getting rid of government altogether. Even so, I also believe that government institutions can be used to keep other forms of organized crime in check.

Friday, July 21, 2006

Embryonic Stem Cell Research and Weapons of Mass Distortion

The three letter acronym WMD is an important part of Modern American Culture, as the purported existence of WMDs was one of the many pretexts that President George Dubya used for the invasion and occupation of Iraq. That's why I enjoy referring to Dubya's political posturing regarding embryonic stem cell research as Weapons of Mass Distortion, also abbreviated WMDs. To wit, after vetoing additional funding for embryonic stem cell research, Dubya trotted out a collection of test tube babies to sit behind him at a news conference that he held at the White House. To hear Dubya tell it, he was drawing a line in the sand so that unborn children like these would not be carved out of their mothers' wombs and have their organs sold for parts to the highest bidder.

What Dubya failed to mention is that for every one child sitting behind him in the Rose Garden during his press conference there were countless unwanted human embryos that were discarded and/or destroyed by fertility clinics after their clients conceived the children they wanted, and witholding additional federal funding for embryonic stem cell research won't change that. And just to be perfectly clear, the embryonic stem cells that scientists harvest for their research usually come from a very small handful of unwanted human embryos that are less than two weeks old and have a total of about 100 cells. By way of comparison, a viable human fetus that has developed organ systems at the end of its first trimester is comprised of trillions of cells, and is usually of no use to scientists pursuing embryonic stem cell research.

The sanctity of human life is a legitimate concern, but denying federal funding for embryonic stem cell research does nothing to protect human life. All it does is insure that a huge number of unwanted human embryos will be discarded and/or destroyed by fertility clinics notwithstanding the fact that the people who created those embryos no longer have any use for them and would like to donate them to science in the hopes of helping someone else through medical research. One might as well deny federal funding to medical schools that want to use cadavers to train student doctors.

Although it's clearly newsworthy that Dubya vetoed his first piece of legislation, it should come as no surprise to anyone that he vetoed a bill that tried to provide additional federal funding for stem cell research. As a libertarian, I suppose I should be pleased that Dubya has finally drawn the line and said no to funding something that should be funded by the private sector, but federal funding is the way that Dubya and his ilk impose their hegemony upon scientists, and these doctors have very few other places to seek funding. That's why I proposed the Budget Ballot, a form of direct democracy that would make Dubya's political posturing in re stem cell research wholly irrelevant.

Make no mistake about it: Scientists are playing God when it comes to using fertility treatments to create human life, and they've done a pretty good job of increasing the chances that people who want to have their own children can have their own children. But even under the best case scenario, the chances of a sperm becoming an actual human being are still no better than a billion to one, and unless its attached itself to a woman's uterus, the odds of a fertilized zygote or embryo aren't that much better. On the other extreme, with sufficient federal funding, unwanted human embryos that are currently being discarded by fertility clinics could be used to advance scientific medical research and help people who are already alive to live longer, healthier lives.

The Blogging Curmudgette on the Mininum Wage vs. the Earned Income Tax Credit

The Blogging Curmudgette wrote:
"The link you provided does not provide any statistics or projections about how much money an EITC would actually put into the pockets of minimum wage employees. Granted I did not click through all your links to see if you address that elsewhere and you are welcome to post that data here, if you have it, in another comment. But its hard to "respond" to a proposition that does not provide that basic information."
I can see where the Curmudgette might take issue with presenting my position in the form of a teaser that requires someone to do independent research, but I've found that form of advocacy to be quite effective on the blogosphere, as it helps me determine the bias of the individuals I am engaging.
"I will respond, however to what I read on the blog entry you linked to. For starters, a grammar lesson. . . . ¶ . . . ¶ To beg the question is to employ a logical fallacy known as petitio principii or 'circular logic.'"
As far as question begging goes, it's not a grammatical flaw to use "begging the question" in lieu of "raising the question," although it does invite ambiquity among those who are familiar with logical fallacies, something of which I was well aware when I used that expression. Even the Wikipedia article to which the Curmudgette directed me did not identify my usage of "begging the question" as a grammatical error. Rather, it noted that my usage of "begging the question" had become common usage and was criticized by proponents of limiting the usage of this expression to contexts where it took its traditional meaning.
"But as to the substance of the argument presented in that blog entry; that an employees wealth should not come from employers. I find this premise preposterous on its face. What exactly is an employer's responsibility to his employees if not to pay them for their labors?"
Speaking of logical fallacies, this one's a doozy of a straw man. Minimum wage laws have nothing to do with the obligation of an employer to pay his or her employees for their labors, neither does the Earned Income Tax Credit (EITC). What minimum wage laws do is intrude upon the contract between an employer and employee. Some would say that the end justifies the means. Assuming, arguendo, that the end does justify the means, the issue then becomes one of whether minimum wage laws accomplish their purported objective of helping the working poor -- which they do not -- or whether the EITC would be a much more effective way of helping the working poor.
"As I said in my article, CEOs now make 262 times what their lowest paid employees make. At it highest measure, before the collapse of the internet bubble, it was over 300 times. When did employers stop thinking it was their job to pay the people who work for them?"
Grasping at straw men, once again. (Please pardon the mixed metaphor pun.) And then changing the subject. I was not talking about pay disparity, nor was I suggesting that employers should not pay their employees; I did allude to the issue of whether it makes sense to let the government decide what an employee's minimum compensation should be. And, as I stated above: Assuming, arguendo, that the end does justify the means in this particular situation, the issue then becomes one of whether minimum wage laws accomplish their purported objective of helping the working poor or whether the EITC is a more effective way of accomplishing that objective.
"We are reverting to a feudal system, in which employers feel entitled to accumulate wealth, but feel no obligation to those who do the hard work that makes their wealth possible. Transferring that obligation to the government (taxpayer) is not an answer."
Oddly enough, the vast majority of libertarians would agree with you that the government has no business being involved in the redistribution of income and wealth. However, once again: Assuming, arguendo, that the end does justify the means, the issue then becomes one of whether minimum wage laws accomplish their purported objective of helping the working poor or whether the EITC is a more effective way of accomplishing this objective -- which it is.

I'm having this strang feeling of deja vu.

Thursday, July 20, 2006

Damning the Earned Income Tax Credit with Faint Praise

With some very notable exceptions, very few advocates of raising the minimum wage discuss the alternative of expanding the Earned Income Tax Credit (EITC). Indeed, as I pointed out in a previous blog post, the EITC is a very well-kept secret, even among economists, so I've found that the most effective way of changing people's minds about the minimum wage is by simply making them aware of the existence of the EITC. However, some people just don't get it. To wit, notwithstanding the clear and incontrovertible facts about the effectiveness of the EITC as a way of helping the working poor escape poverty and the corresponding futility of raising the mininum wage, many people will argue that we still need to do both. Others will question where the money for an expansion of the EITC would come from, ignoring the fact that the same exact question should be raised whenever someone advocates raising the minimum wage.

Ignorance of the EITC among laypersons is understandable. It begins and ends with the most well-informed and well-educated economists, most of whom seldom discuss the EITC. Those economists who do discuss the EITC seldom discuss it in the context of being an alternative to the minimum wage. As such, by the time viewpoints on the EITC and the minimum wage filter down to front line advocates for the working poor, they are wholly disocciated from each other, and using the fuzzy logic that most front line advocates use, one could easily conclude that "we need both." On the other extreme are people who believe that we need neither one.

While few people would argue against helping the working poor, many libertarians who stick to the party line would argue that EITC benefits are charity, and that charity should be voluntary rather than being government-sponsored. Speaking as a lifelong libertarian, I wholheartedly disagree. To wit, EITC benefits can be justified as a way of protecting one of the most vulnerable segments of society from oppressive taxation. To the extent that EITC benefits exceed income taxes paid, they can be seen as compensation for various indirect taxes that consume a large portion of the income of the working poor. Finally, to the extent that EITC benefits exceed any and all taxes paid by the working poor, they can be justified by virtue of the fact that they reduce other forms of entitlement spending.

To be clear, the EITC is not a perfect solution, but it is a very, very good solution in that it targets economic relief towards the working poor, which is the biggest reason that an expansion of the EITC should be favored over an increase in the minimum wage. To wit, I frequently encounter people who argue that "no one can live on the amount of money that they make working full time at minimum wage," and that's simply not true. People who work full time at minimum wage can and often do live quite well by living with roommates, parents, and spouses. Some people actually work full time for less than minimum wage and still live quite well, whereas most of the working poor make a great deal more than minimum wage and still live in abject poverty.

EITC benefits target economic relief for the people who are most likely to be living in abject poverty, whether or not they are making more or less than the prevailing minimum wage. To wit, single parents with two children who make between $11,000.00 and $15,000.00 per year get a $4,400.00 tax credit that lifts millions of these families out of poverty every year. Probably the best way to improve the EITC would be to offer even larger benefits for families with three children where the poverty rate is double that of families with fewer than three children.

Ignorance of the EITC is a somewhat fixable problem being addressed by people like former President Clinton and John Hope Bryant of Operation Hope. At the other extreme are people like blogger "Litwin" of the Social Justice Blog who are damning the EITC with faint praise:
"I don't think I've ever discussed minimum wage in this blog without at least mentioning the Earned Income Tax Credit and similar programs, I want to point that out here again. Certainly, no discussion of minimum wages can be fair and honest without pointing out that programs like the EITC has increased the amount of money in our lowest wage workers' pockets at the end of the day. But such increases are not enough to compensate for the loss in buying power of the minimum wage, the programs are not utilized by a decent portion of the eligible population, and they are considered a hand out rather than truly 'earned income' by many recipients."
Contrary to what Litwin asserts, EITC recipients do not consider their benefits a handout. While the EITC is far from perfect, it is a highly effective way of helping the working poor whereas any argument in favor of raising the minimum wage is (at best) a red herring.

Wednesday, July 19, 2006

Illegal Immigration and Crime in Hazleton, Pennsylvania

In an open letter explaining his motivation for proposing the Hazleton Illegal Immigration Relief Act, Mayor Ray Barletta cited a purported rise in crime in Hazleton which he attributed to a large and recent influx of illegal aliens. Perhaps Barletta really believes that this claim are true, but the more I research this issue, the less evidence I am finding to support Barletta's position. To wit, according to reporter Dan Geringer of the Philadelphia Daily News:
"Barletta did not offer any statistical evidence to support those claims. . . . ¶ He told the Daily News that he did not know how many 'illegal aliens' lived or worked or went to school or committed crimes in Hazleton. . . . [H]e could not say how many Hazleton crimes had been committed by 'illegal immigrants' and how many by legal residents."
In other words, Barletta has no evidence whatsoever to support his claim that crime has risen in Hazleton because of illegal aliens, and the only statistics that I could find painted a very different picture. To wit, according to the Los Angeles Times, statistics compiled by the Pennsylvania State Police Uniform Crime Reporting System indicated that Hazleton had a decline in total arrests from 1,458 in 2000 to 1,263 in 2005, notwithstanding a 30 percent increase in the overall population. Moreover, whereas the number of thefts and drug-related crimes has risen from a low point of 80 in 2001 to 127 in 2005, the total number of reported rapes, robberies, homicides and assaults has decreased since 2000. Digging a little deeper, I found a rather interesting post in the blogosphere from a one-time residenct of Hazleton:
"I started college at Penn State Hazleton, so all of the national press . . . about the mayor of Hazleton's anti-illegal immigrant legislation has been interesting. What I find most interesting [is] the 'Smalltown, USA' descriptions of the city. As I recall Hazleton, it had a pretty big underground drug trade and a lots[sic] of mafia, in addition to a bar on every corner. There were some good efforts to keep the place vibrant, but ultimately, it was a pretty depressing place full of lots of ignorant people."

Quick Pick Voting vs. the Budget Ballot

While exploring the blogosphere for commentary on the ongoing minimum wage debate, I stumbled upon an article by Chris Lawrence on the Outside the Beltway blog entitled Go Vote, Win $1 Million. The article discussed an Arizona ballot initiative that qualified for the November 2006 ballot which will use unclaimed state lottery money to award one lucky voter a million dollars. I'd heard about this a short time earlier while watching The Daily Show with John Stewart, and I surprised myself by actually reading all the way through Lawrence's article.

As far as the larger issue of the potential benefits of attracting more voters to the polls and the related issue of whether those voters would be stupid voters, I can honestly say that I could care less. However, in discussing the scheme of wooing voters to the polls with cash-based rewards, Lawrence pointed to the fact that voting is an activity that is no more rewarding than playing the lottery. This is something that I have a very hard time explaining to people who just don't get it, so Lawrence had me hooked, all the way through to the end of the article, and as I started reading through the comments, I found myself laughing out loud when I read the second comment (written by one "spacemonkey"):
"I wonder how many will walk in and just ask for the quick pick."
Glibness aside, the act of voting is possibly one of the most pointless things that a citizen can do, particularly if there is no one or no issue on the ballot that said citizen has a vested interest in. As such, the time that someone spends voting and/or educating him-or-herself about the issues and people on the ballot would be better spent buying a lottery ticket. If you win the lottery, that's time and money well spent; if you succeed in voting in your candidate, he or she's the one who wins.

In terms of the individual voter, voting is largely a symbolic act. And speaking as a libertarian, I find voting very depressing and disturbing -- and not just because my candidate usually stands no chance of winning. What I find depressing and disturbing about voting is the fact that every time I cast a vote, I am validating a system that I do not believe in. However, one idea for reform that I had many years ago still makes me think that there is a way to make voting both meaningful and valuable to the individual voter. It's called "The Budget Ballot."

During my first year at UC Davis Law School ("King Hall"), I proposed the Budget Ballot as a transitionary tool between government bureaucracy and libertarian privatization. I got the idea from the one dollar contribution for the presidential election fund on my tax return. However, my idea was fundamentally different in that the members of the voting franchise (as opposed to taxpayers) would decide how the money was spent. Nine out of ten people that I spoke to initially thought that this was a great idea.

During my second year of law school, the Smith vs. Regents decision was handed down, which proscribed the university from allocating or spending student fees on activities that included partisan political speech and/or activism. To my amazement and surprise, the Law Student Association (LSA) at King Hall decided to hold a Budget Ballot all on its own. (I have no idea where they got the idea, so I can't take credit for it.) Law students were given a list of the student organizations chartered by the law school and given the opportunity to allocate the "voluntary" portion of their then $16 student fee to the organizations of their choice.

The results were astounding: First of all, several "unpopular" student groups emerged with a hidden constituency; second, a surprising number of law students -- about half -- voted for the option of letting their student fees be allocated to various student groups by their elected student representatives. In other words, it was a win-win situation for everyone -- or so it seemed: The law school administration would not let the referendum be carried out. Nonetheless, the results of the Budget Ballot carried great persuasive weight in future LSA budgeting decisions.

IMHO, the Budget Ballot would be an excellent default position for any level of government, provided that legislative override or veto was permitted. With a budget ballot, citizens could allocate their per capita share of tax revenue to the programs that they would like to see funded, skipping the intermediate step of letting their elected representatives make these decisions. Conservative hawks could use the budget ballot to vote for military spending; liberals could use it to support social welfare programs; libertarians (like myself) could use it to reduce the national debt. The only programs that would get no funding whatsoever would be those programs that absolutely no one wants in the first place.

The Budget Ballot would give disgruntled individuals a meaningful voice in the allocation of community funds, so (as the old saying goes) those who don't vote would no longer have a reason to complain. And by virtue of the fact that many people would probably leave budgeting decisions to their elected officials, this would give leeway to said elected individuals to fund those "worthwhile" programs that no one is interested in funding. Beyond this, elected officials could be given the right to override or veto the results of the Budget Ballot.

Not all my feedback about the Budget Ballot has been positive. Many people mistrust the "uninformed public" to make decisions that are "best left to well-informed elected officials" (an oxymoron, at best). Still others believe that government funding is inherently "too complex" for direct democracy, that (for example) a Budget Ballet could not accomodate the long-term commitments necessary for many government programs. These objections, however, are not peculiar to direct democracy, and I have (as yet) to hear a specific objection made as to why the Budget Ballot would not work, at least on a small scale.

Tuesday, July 18, 2006

A Xenophobe by Any Other Name

In light of my recent commentary regarding the euphemistically titled "Illegal Immigration Relief Act" in Hazleton, Pennsylvania, my views on immigration have caught the interest of quite a few people on the blogosphere, most of whom disagree with me. Strangely enough, the people whom I have engaged on this issue have been quite civil with me, and they actually seem quite offended by the idea that I might think of them as xenophobes. What they fail to realize is that I don't think of xenophobes as evil people. Rather, I think that xenophobia, prejudice, and ethnocentrism are part of human nature, and that very few people ever learn to transcend these flaws. Indeed, rather than even trying to transcend these flaws, some people embrace their hatred and intolerance of others as if they were religious principles.

At one end of the spectrum of hate and intolerance, we have people who acknowledge intellectually that it is wrong to persecute people simply because they are different. And yet it is human nature to try to conform to societal norms, and (for the most part) we come to accept our own culture's customs as being the "right way" to do things, so when we encounter someone who prefers to do things differently, we are genuinely perplexed. To wit, "Why can't they just be reasonable and do things our way?"

When it comes to immigration, xenophobia will always be part of the equation. Even people who are strongly in favor of immigration have told me that they think people who come to the United States to live and work should do their best to learn English and assimilate into American Culture. To a certain degree, I agree with this sentiment, but not because of my xenophobia. Rather, I agree with this sentiment because I know the hardships that immigrants will have to endure if they do not learn English and assimilate into American Culture. Even so, there are ethnic enclaves in the United States where you can be born, die, and hold public office without ever becoming fluent in English. And to the degree that law-abiding people choose to live in such enclaves -- be they citizens or residents -- I think that they should have the freedom to do so.

Prior to its passage of its now infamous ordinance authored by Mayor Louis Barletta -- which incidentally made English the city's official language -- Hazleton was well on its way to becoming a Latino enclave, and notwithstanding Barletta's self-aggrandizing political rhetoric, he was either motivated to author this ordinance by his own xenophobia or is cynically exploiting the xenophobia of his constituents. In my opinion, the latter possibility is the more likely of the two, and this makes Barletta a very dangerous man.

Young Philly Politics on the Minimum Wage vs. the Earned Income Tax Credit (EITC)

In my ongoing attempts to challenge various advocates of raising the minimum wage with my assertion that an expansion of the Earned Income Tax Credit (EITC) would be a much more efficient and equitable way of helping the working poor, I engaged some of the most well-informed people I have yet encountered on the blogosphere over at Young Philly Politics. I was particularly amused by the tongue-in-cheek commentary of "Price" who pointed out that my views on the EITC were contrary to what would be expected of a libertarian:
"Internet Esquire, let me congratulate you for having the courage to call yourself a libertarian while also supporting the EITC. It is after all income redistribution! I hope the boys still let you in the lodge or cement bunker or wherever you people socialize. Eewh! Socialize! Sorry I meant freely associate."
That's a pretty clean bust, and I'm sure that I'll have some 'splaining to do the next time that I "freely associate" with other libertarians whom I meet at the next Federalist Society banquet or barbecue. Those libertarians who know me well usually just dismiss my libertarian heresy as part of my penchant for playing the Devil's Advocate.

Speaking as a lifelong libertarian, I think that the EITC is an excellent way of protecting the most vulnerable segment of society from oppressive taxation. Indeed, given that the working poor spend most of their income on the necessities of life and are subject to all sorts of hidden taxes, I'd be very surprised to find that there is any income or wealth redistribution that actually occurs under the auspices of the EITC. To the extent that such income redistribution actually does occur, I think it can be justified by virtue of the fact that the EITC significantly reduces other forms of entitlement spending. In sum, while the EITC is not a perfect solution, it is a good solution, and the perfect is often the enemy of the good.

Earlier on in the discussion over at Young Philly Politics, "Price" pointed to some compelling statistics which indicated that raising the minimum wage in Pennsylvania would raise the income of quite a few low income households. I responded by pointing to a paper published by the United States Department of Health and Human Services which indicated that those who benefit from a raise in the minimum wage are offset by those who lose out. To wit:
[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."
Astonishingly, Price had actually read that paper and pointed out that it was a literature review. He then went on to present and critique the original research. Even so, I don't think that he disproved my point; he simply watered it down to the point where it was unconvincing in that it didn't have the same force and effect that it would have had had it gone unchallenged.

In sum, after very careful consideration and review of the rebuttal set forth by "Price," I am still inclined to dismiss arguments in favor of the minimum wage as being red herrings. To wit, assuming that your objective is to help the working poor, the EITC is a much more effective and equitable way of doing so. The best that advocates of raising the minimum wage can prove is that modest increases in the minimum wage have no negative impact on the economy. Beyond these modest increases, there is a clear and measurable impact on the economy. Meanwhile, the EITC remains a very well kept secret, even among economists.

Before I responded to "Price," "deggeh" posted an eloquent and perspicuous exegesis of the many advantages that the EITC enjoys over the minimum wage, which you can find here. Shortly thereafter, the economic debate between "Price" and "deggeh" became too sophisticated for most laypersons to understand, so I saw very little benefit to my continuing to chime in on the discussion since my primary objective of introducing the EITC into this particular discussion had already been achieved.

Monday, July 17, 2006

Francis Lynn on Xenophobia Redux

Francis Lynn wrote:
"Just because you deem someone a xenophobe or racist because he or she disagrees with you does not make them so. . . ."
By the same token, just because someone takes offense at being called a xenophobe or a racist doesn't clear them of the indictment. I might add that I have not yet referred to you (personally) as either a xenophobe or a racist: The jury's still deadlocked on whether you are a xenophobe, but I can say with quite some certainty that you are not a racist. Given our limited interaction, I would put you into the category of someone who is very rational but strongly biased on the issue of immigration. Consequently, I still believe that there is a very good chance that you and I may find common ground on this issue.

Francis Lynn continued:
"You may not intend to, but you come across as arrogant & superior."
Guilty as charged.

Francis Lynn continued:
"Believe it or not, there are well-educated & well-informed people on the other side of the issue."
I am well aware of this fact. Indeed, at the risk of changing the subject, there are well-educated and well-informed people who believe that the world was created in six days less than 10,000 years ago. However, the Peter Brimelows of the world are a rare breed on your side of the ongoing immigration debate. Demagogues like Bryanna Bevens are much more common.

Francis Lynn continued:
"[W]ith at least 12 million illegals in the country & no idea how many among them are violent criminals, do you think maybe it is okay if our government controls the borders to stop the violent ones from gettng in?"
All mutual smugness aside, controlling the borders is a non-issue. The vast majority of the 12 million illegal aliens currently in the United States entered legally and simply overstayed their welcome. If there is a problem with the current state of immigration enforcement, it is the fact that illegal aliens who are taken into custody for violent crimes are not kept in custody until they can be deported.

Francis Lynn continued:
"Again, the USA cannot take in 3 billion law-abiding people, just because they want to come here.
And there is no evidence whatsoever that 3 billion people want to come to the United States to work and live. Indeed, quite a few people who come to the United States to work eventually return to their countries of origin.

Francis Lynn continued:
"Illegal immigrants are not the most productive sector in this country, in so far as what they contribute to the economy as opposed to what govermentt services are spent on them."
I know quite a few economists who would disagree with this assessment.

Francis Lynn continued:
"Okay, I picked up a newspaper - I see nothing about Hazelton using the new ordinance to persecute Latino legal citizens, unless you're reading Mother Jones or LaRaza newsletter.
Try the Los Angeles Times, which is where I first got wind of the story.

Francis Lynn on Immigration and Xenophobia

Francis Lynn posted a comment on my blog in response to my post entitled Xenophobia in Hazleton, Pennsylvania. Given the acrimonious nature of Francis' comment, he maintained a surprisingly civil tone. To wit, Francis criticized my position on immigration rather than criticizing me as a person. It is from this sort of starting point that I have been able to find common ground with almost everyone whom I engage in political discourse. Nonetheless, responding to the merits of Francis' criticism will be problematic in that his comment brought up a number of complicated issues that are all too often oversimplified.

Francis wrote:
"You like to throw that word around a lot, huh? - xenophobe. And mean-spirited ignorant ones at that. Ah, the disdain dripping forth from you."
Guilty as charged. I am a great believer in naming and shaming racists and xenophobes. Prejudice is deeply ingrained in human nature, and I am deeply prejudiced against xenophobes who rationalize their own prejudices, make excuses for it, and/or pretend it doesn't exist.

Francis continued:
"Your take on illegal immigration is, dare I say it, ignorant."
My take on illegal immigration may be extremely biased against the simplistic viewpoints espoused by most xenophobes, but it is most certainly not ignorant. By any measure you might use, I am a very well-educated and well-informed individual, and I am well-equipped to play the Devil's Advocate on any issue, so much so that most people have a very hard time figuring out where I stand on most issues unless I make a point of coming right out and telling them.

Francis continued:
"Does or does not a country have a right to control its borders & entry across it?"
This question betrays a very simplistic viewpoint, ignorant of the fact that national sovereignty is a relatively recent phenomenon in human history. I might as well ask you whether one country has the right to declare war on another country or to intervene in a conflict between two sovereign nations.

Having researched my own diverse genealogy, these issues have special significance to me. To wit, the people with my last name who emigrated to the United States in the early to middle 1800s identified themselves in their immigration papers as "Alsatian." It's very rare that I meet anyone who knows where Alsace is, or rather where it was. Alsace is currently part of France, and it once included large portions of what is now the Franche-Comté region of France. My most recent Alsation ancestors came from a small town known as Beaucourt in what is now the Territoire de Belfort, an area at the confluence of what is now the countries of France, Germany, and Switzerland. The present day boundaries of these countries and regions were not determined until after World War I.

Getting back to the issue of whether a country has a right to control its borders and entry across it, I'd say that such issues are open to debate. However, based on my extensive knowledge of history, politics, and economics, I would say that the relatively recent concept of national sovereignty is becoming less and less workable in today's fast-paced and global economy, and that otherwise law-abiding people who want to come to the United States to work, live, and become naturalized citizens should be allowed to do so. On the other extreme, if a foreign national is a violent criminal, he or she should be denied entry to the United States and/or deported to his or her country of origin as soon as it is practicable for the powers that be to do so.

Francis continued:
"Judging by every other country in the world, it sure does have a right. You are in the small minority who thinks otherwise, my friend."
I am most certainly in a very small minority of right-thinking people. Thank you for noticing. I might add that when my views become too mainstream, I take that as a sign that I need to re-examine my views and change them.

Francis continued:
"The right to control ones border implies that there are laws & penalties that go with that control."
Why not just put me in charge? I think I'm a pretty good judge of who should stay and who should go.

Francis continued:
"In that context, where do you get the idea that such laws are unfair?"
From the same place that I get the idea that Jim Crow laws were unfair. The concept of the rule of law is based upon a presumption that there is such a thing as natural law, and any man-made laws that violate natural law are (by definition) unfair.

Francis continued:
"What is unfair are the illegal border crossers who in effect jump the line ahead of those who applied for legal immigration, some who have waited years. Nary a word from you about this unfairness?"
Before illegal immigration becomes an issue for me, the irresistible market forces that drive illegal immigration need to be acknowledged and addressed. To that end, if legal immigration in the United States is expanded to the point where all of the law-abiding people who want to come to this country to live and work are allowed to do so, I am all in favor of telling people who broke the previous unfair law to go back to the end of the line if they want to become citizens.

Francis continued:
"Contrary to your assertion that we are all xenophobes, there are real reasons for concern in some towns & cities. Towns have seen sudden increases in population. Part of this is due to illegals. Social services provided by towns are strained, schools are getting crowded, increases in crime."
Sudden population growth is a serious problem that needs to be addressed with smart growth policies, and in this sense opposition to legal/illegal immigration is not unlike the misguided and xenophobic no growth policies that many state and local governments have implemented. The key difference is that most no growth policies do not target minority groups.

Francis continued:
"Across the country, billions are spent for educating illegal children, hospitals are stuck footing billions in bills due to illegals. Billions are spent on social services to illegals."
Everything I've read indicates that immigrants are the most productive sector of the economy. Indeed, most of the self-made millionaires in the United States are first- or second-generation Americans, whereas most people who live on the dole in the United States have been doing so for three-generations or more.

Francis continued:
"Did you know there is a Korean travel agency that flies in late term pregnant women, just so they can give birth here & claim US citizenship?"
I hear this sort of racist, anti-immigrant propaganda all the time. You want to know what's even worse? There's people who have been living on the dole in the United States for three generations or more!

Francis continued:
"I have some first hand knowledge of the culture of illegals. Landlords love renting out attics & basements to them. Free money for them - off the books income. I've seem squalled conditions in which illegals sleep next to boilers or in tiny attic crawl-spaces, or mattress-lined rooms where 10-15 sleep on the floor. Are you saying a town has no right to control its housing codes or its fire & safety codes?"
Just imagine how much easier it would be to enforce local codes if people living in slums could complain to the powers that be without fear of being run out of town on a rail.

Francis continued:
"Your assertion that the Hazleton ordinance is being used to persecute Latino legal citizens is completely without foundation. Show me."
Pick up a newspaper, my friend.

Francis continued:
"The USA is the most genrous receiver of immigrants in the world. But that's not good enough for you. Open borders - take in the world. But no country can sustain that type of influx. If you can't see that then it's pointless having a rational starting point with you about illegal immigration."
What I see is that illegal immigration is driven by irresistible market forces, much like the recreational drug trade. And as long as there is demand for cheap labor or recreational drugs, supplies will continue to stream across the border.

Sunday, July 16, 2006

The Unknown Candidate on the Minimum Wage vs. the EITC

The Unknown Candidate writes:
"The minimum wage is not a tax of any kind. It is an attempt to more fairly pay workers for work done. Every employer must pay wages to workers. It is a cost of doing business, not a tax."
I wholeheartedly disagree. As the saying goes, "A rose by any other name. . . ." And as far as taxes go, the minimum wage definitely passes the proverbial duck test. To wit, the Wikipedia article on the topic states:
"A tax (also known as a "duty") is a financial charge or other levy imposed on an individual or a legal entity by a state. . . . Taxes could also be imposed by a subnational entity. ¶ Taxes may be part of a direct tax or indirect tax, and may be paid in money or as corvée labor. . . .
I might add that the Unknown Candidate was demonstrating some remarkably two-dimensional thinking in failing to acknowledge that the primary objective of the minimum wage is the same objective that is accomplished by many taxes -- i.e., to redistribute income and wealth, which is something that is done much more effectively and equitably by the EITC.

The Unknown Candidate continues:
"The EITC does not bring wages up."
There's that two dimensional thinking again. Of course the EITC doesn't bring wages up. Nobody's saying that it does. What it does do is provide more income for the working poor and lift millions of them out of poverty. In many instances, EITC benefits exceed a taxpayer's income tax liability, and they get back more taxes than they paid in.

The Unknown Candidate continues:
"It decreases taxes on too low wages. Even if you remove all taxes from minimum wage workers, they are still below the poverty line."
This ignores the fact set forth above -- i.e., that EITC benefits can and often do exceed income tax liability and result in a negative income tax. You are also assuming that minimum wage workers are below the poverty line to begin with, and very few of them actually are. According to the United States Deparment of Health and Human Services, only 16 percent of minimum wage workers live in families with incomes below the poverty level, although another 12 percent are near poverty.

The Unknown Candidate continues:
"A source for your statistic . . . would be appreciated."
Well here it is: Citation.

The Unknown Candidate continues:
"What is missing from your argument is this: individual people are not statistics. A single mother with two kids cannot support her family at $5.15/hr with our without EITC.
Which means that the EITC should be expanded, because a single mother with two kids would have even more trouble supporting her two kids if she lost her job and was replaced by someone else, which is what typically happens to the small percentage of unskilled and uneducated people who are actualy making minimum wage when the minimum wage is raised. Don't believe me? Try reading the citation you requested of me which concludes that:
"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."

First They Came for the Rednecks . . .

Well, a man can dream, can't he?

The xenophobic mayor of Hazleton, Pennsylvania is getting all sorts of support from rednecks in the blogosphere after having drawn the proverbial line in the sand when it comes to illegal immigration. To wit, Bryanna Bevens posted a rather ignorant diatribe on the "Virginia Dare" blog, asserting that:
"The Mayor of Hazelton . . . decided that illegal immigration was out of control: illegal immigrants were a taxpayer burden, schools were overcrowded and crime rates were soaring."
The only problem is that none of the problems that Hazleton is experiencing have anything to do with illegal immigration. Indeed, the once small, charming, and dying town of Hazleton was more or less saved from economic extinction by an influx of decent, hardworking Latino families from New York over the last few years, with all but a small handful of these Latinos being legal residents rather than United States citizens. But why let facts like that get in the way? After all, since there were one or two high profile violent crimes in Hazleton that involved illegal immigrants -- high profile and newsworthy primarily *BECAUSE* they involved illegal immigrants -- it was rather easy for the rednecks in Hazleton to blame all of the problems of sudden growth in Hazelton on illegal immigration. Nevermind the fact that there has been no noteworthy increase in crime in Hazleton since the influx of Latinos from New York, much less an increase in crime caused by illegal immigrants. Start a race war by passing an ordinance that rednecks can use to persecute Latinos, and hate crimes in Hazleton will almost certainly skyrocket.

Beyond outing Bevens as a racist demagogue, I will stop short of the cheap shots that are so common in discussions of political issues. However, I will damn her with faint praise. To wit, while Bevens is a regulation hottie, she's not particularly intellectual, so she's nowhere near as dangerous as a hottie female intellectual demagogue like Ann Coulter. In fact, Bevens' racist screed is so transparent that I have a hard time believing that she believes half of the tripe that she has written about immigration. I say this as someone who is related to quite a few hottie female demagogues. Unlike Bevens, Coulter is truly dangerous, as she gives a deceptively rational voice to intolerance.
First they came for the communists, and I did not speak out—
because I was not a communist;
Then they came for the socialists, and I did not speak out—
because I was not a socialist;
Then they came for the trade unionists, and I did not speak out—
because I was not a trade unionist;
Then they came for the Jews, and I did not speak out—
because I was not a Jew;
Then they came for me—
and there was no one left to speak out for me.

-- Martin Niemöller (1892—1984), Protestant pastor, social activist, and former German Nazi sympathizer.

Saturday, July 15, 2006

Ken R. Goldstein on the Minimum Wage versus the EITC

Ken R. Goldstein writes:
"[David Prenatt has] good points if the only purpose behind a raise in the minimum wage is to 'help the working poor.' I think that is a part of it, but to me it is mainly a simple matter of fairness. The minimum wage has not kept pace with inflation - indeed, it hasn't even been raised one cent since 1997 - meaning that minimum wage workers are loosing pace with the economy each year that the minimum wage remains stagnant."
There are several flaws in Ken's argument, the first being the apparent assumption that the people who were earning minimum wage in 1997 are still earning minimum wage. Job market statistics tell a very different tale. To wit, very few people work for minimum wage for very long. Rather, as soon as a minimum wage earner gets some marketable skills, he or she becomes a valued employee, and his or her employer will usually raise said earner's hourly wages well above the minimum wage rather than go through the hassle of losing said employee and having to hire and train a new employee.

As I pointed out in a previous blog post, there are some 520,000 people who are, in fact, working for minimum wage, as well as some 1.5 million people who are working for *LESS* than minimum wage, not to mention an unknown number of people who are working for free as volunteers and interns. Very few of these people will be earning at or below minimum wage for very long, but a small handful of minimum wage earners are people who have no marketable skills and lack the wherewithal to obtain marketable skills. If the minimum wage is increased, these people stand a pretty good chance of losing their jobs and being replaced by better educated, more skilled workers. This is exactly what happened when the first minimum wage law was passed in 1933, and some 500,000 African Americans lost their jobs, subsequently being replaced by better educated, more skilled White Americans. [Citation.]

Ken continues:
"As to whether or not the 'burden' of the minimum wage falling on a small group (their employers) is unfair, I ask, who better to pay the price than those who reap the economic benefit of their work?"
If only it were that simple. As I pointed out above, the people who are most likely to pay the price for an increase in the minimum wage are not employers, but the most uneducated, unskilled, and vulnerable members of the work force.

Ken continues:
"Why should this cost be born by all taxpayers (in the form of a tax credit) to the benefit of that small group of employers? The EITC doesn't just help low-income families; it is also a subsidy to those employers who do not pay a living wage."
This argument assumes that a significant number of people who receive the EITC are the same people who are making minimum wage, and that's not the case. Paradoxically, very few people who earn minimum wage qualify for the EITC, as very few of them live in poverty. As pointed out by a paper published by the Center on Budget and Policy priorities, single and stay-at-home mothers and their children are the primary beneficiaries of the EITC:
"[T]he EITC has substantial positive effects in inducing single parents to go to work. . . . [T]he proportion of single mothers who are in the labor force rose sharply between 1984 and 1996 and . . . the EITC expansions instituted during this period are responsible for more than half of this increase."
"[T]he EITC has been strongly praised by some conservatives for the support it provides to low-income working families with stay-at-home mothers."

Friday, July 14, 2006

Xenophobia in Hazleton, Pennsylvania

While exploring the blogosphere for commentary on the issue of whether the minimum wage should be raised, I came across another article at Moderate that caught my eye. That article summarized a story in the Los Angeles Times, dateline Hazleton, Pennsylvania, which narrated the fact that Hazleton, once a charming small country town, has become a haven for ignorant xenophobes under the pretext of cracking down on illegal immigration. To wit, Hazleton's city council passed an ordinance requiring anyone who wants to rent a dwelling in the city to apply to the city for a residence license and submit to an investigation of their residency status. Landlords in Hazleton found renting to people without residency licenses can be fined $1,000.00 per day pursuant to the ordinance. Additionally, business owners in Hazleton found hiring, renting property to, or providing goods and services to illegal immigrants can lose their business permit for five years on a first offense and 10 years on a second. The ordinance also declared English to be the city's official language.

Assuming, arguendo, that illegal immigration is a serious problem in Hazleton, a dubious assertion at best, a much bigger problem is the fact that this ordinance is being used as a vehicle for persecuting Latinos in Hazleton who are United States citizens and legal residents. As I noted in a previous blog post, it is not uncommon for xenophobes to conflate legal immigration with illegal immigration, not to mention minority status, so it should come as no surprise that the Hazleton ordinance has succeeded in polarizing the White and Latino communities there.

Legal challenges to the Hazleton ordinance are already being launched, but legal challenges stand little chance of changing the hearts and minds of the mean-spirited and ignorant xenophobes who supported the passage of this ordinance. Moreover, this ordinance is already being used as a template for other ordinances in other cities all over the United States, and it will no doubt have the same polarizing effect in many of those other cities. Even if congress passes some sort of comprehensive immigration reform bill that unequivocally invalidates all such local ordinances, it is truly a dark day for civil rights in America.

Thursday, July 13, 2006

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."

Wednesday, July 12, 2006

Pamela Leavey on the Minimum Wage and the EITC

While following up on some comments that I left on various other blogs regarding the Earned Income Tax Credit (EITC), I had the dubious pleasure of engaging one Pamela Leavey over at The Democratic Daily. Although I have enraged quite a few people on the Internet over the years, it's fairly rare for me to do so unintentionally, and I was quite surprised at the sort of vituperous venom that Ms. Leavey displayed without any provocation whatsoever. To wit, rather than simply responding to my position that an expansion of the EITC would be a much more efficient and equitable way of helping the working poor than raising the minimum wage, Ms. Leavey scrutinized my online resume, did her best to dish out some dirt on me, and then started looking for a way to compete with me for victim status, asking me (quite inappropriately) whether I had ever been poor and volunteering that she herself has been poor, "I mean really poor." (You'll find the relevant threads here and here.)

It took me a while to respond to Ms. Leavey because I was unaware that she had replied to my comments. Whenever I respond to a comment that someone leaves on one of my websites, I try to contact them by e-mail and let them know, assuming that they provide me with contact information. However, Ms. Leavey made no attempt to notify me of her response. What she did do was scrutinize my online resume and post a comment in one of the threads on her website alluding to the fact that some 10 years ago I was the Vice President of my law school's chapter of the Federalist Society. This was the same thread where she asked me whether I had ever been poor while volunteering that she herself had been poor, and that she was a single mother.

I am not a public figure, nor do I have any desire to be, and as a general rule, I am loathe to introduce personal information about myself into discussions of larger social issues because I think it's somewhat egocentric. Likewise, I think it's pretty absurd for anyone else to introduce anecdotal personal information about themselves into discussions of larger social issues, a fortiori when they do so in an attempt to claim victim status. There are exceptions to this general rule, none of which applied to the exchanges that I had with Ms. Leavey on her website. Her objective was to out me as a fat cat conservative and suggest that my opinions should simply be dismissed as right wing propaganda. When that failed, she attempted to invoke a breach of civility on my part.

Unfortunately for Ms. Leavey, it turned out that I am not a fat cat conservative. I am a libertarian whose affiliation with the Federalist Society is based upon the fact that it embraces free speech ideals. And as a libertarian, my support for the EITC is based upon the fact that it is an excellent way of protecting a vulnerable segment of society from oppressive taxation. I pointed out all of this to Ms. Leavey, and she promptly changed the subject, asserting that I obviously had no firsthand experience with poverty, and that my "opinions" (read: inconvenient facts) were an "insult to the working poor." Once again, she was wrong.

My firsthand experiences with abject poverty have been relatively brief, but there have been times when I did not have a place to call home, had no cash or credit, and had no friends or relatives that I was willing to turn to for help. During these times, I had to rely upon minimum wage jobs that paid me the same day and the kindness of strangers who befriended me. Unlike most of the working poor, I have an education and marketable skills, so I have always been able to recover from any untoward circumstances that I have encountered, but not a day goes by that I do not encounter someone who makes me think, "There, but for the grace of God, go I." In sum, I know the hardships of the working poor, and I sympathize with their plight, which is why I have always been willing to volunteer my time and talents for those who are less fortunate than me and do more than my fair share of pro bono work. Consequently, Ms. Leavey's attempts to claim victim status for herself struck me as somewhat self-centered, self-righteous, and hypocritical.

Notwithstanding Ms. Leavey's contentious personal style, I assumed good faith and tried to redirect her personal attacks against me to a dialogue regarding an expansion of the EITC as an alternative to raising the minimum wage. And had Ms. Leavey simply ignored me, I probably would have ignored her as well and moved onto other online venues. That's what I usually do when people are not interested in what I have to say, as I am under no obligation to save anyone from his or her ignorance, and I have no desire to do so. However, after editing my comments to remove no less than two links to my supporting citations, Ms. Leavey took the radical step of completely deleting my most recent comment on The Democratic Daily, one step beyond what the cowardly censors at did when they simply disabled my login, so I decided to post this article on my own blog narrating Ms. Leavey's cowardly censorship and offering to interested parties the citations that she conveniently edited out of my posts on her website. Here are those citations:

* The Low Wage Labor Market: Challenges and Opportunities for Economic Self Sufficiency. Does the Minimum Wage Help or Hurt Low-Wage Wokers?
This is a publication from the United States Department of Health and Human Services that points to the fact that only 16.4 percent of those who would benefit from a minimum wage increase are currently living below the poverty federal poverty line and fully 71.3 percent of minimum wage earners have a family income that puts them 150% or more above the federal poverty line.

* - The downside of a hike in the minimum wage
This is an article from a monthly column in the Indianapolis Star written by Peter Z. Grossman, Professor of Economics at Butler University, in which he points out that only 520,000 workers earn the minimum wage, but that 1.5 million workers make less than the minimum wage.

By virtue of Ms. Leavey's decision to engage in no less than three cowardly acts of censorship, I have assumed that the virtual gloves are completely off, which is why I am posting this admittedly unkind article about her on my blog. However, I will stop short of the cheap shots that she made against me on her own website, leaving room for the possibility that maybe, just maybe, someone hacked into her website without her permission and censored me in an attempt to make her look bad. And in the interests of comity, if Ms. Leavey is still interested in claiming victim status, I am willing to concede that she is a bigger loser than I am, and a sore loser at that. You win, Ms. Leavey! Or rather, . . . you lose.

Tuesday, July 11, 2006

Why Is the Earned Income Tax Credit Such a Well Kept Secret?

The movement to raise minimum wage laws in the United States remains very newsworthy, and yet it is an issue that remains steeped in ignorance. On the one side are the vast majority of economists and libertarians who oppose minimum wage laws on general principle. On the other extreme are liberals who argue that people who work full time at minimum wage should not be living in poverty. Those who oppose minimum wage laws are characterized as greedy by their opposition, and those who favor them are characterized as misguided. Almost entirely missing from this ongoing debate is any mention of the Earned Income Tax Credit (EITC).

I recently performed a Google Web Search for "minimum wage" (in quotes), and my query returned no less than 29,400,00 search results. When I added the search term "EITC" (without quotes) to my query, it returned 126,000 search results; when I replaced the search term "EITC" with "earned income tax credit" (with the quotes), it returned 231,000 search results. On its own, "EITC" returned 1,060,000 search results, whereas "Earned Income Tax Credit" returned 1,740,000 search results, and there is apparently an overlap of about 383,000 search results for "EITC" and "Earned Income Tax Credit."

Using these numbers as a rough estimate, less than one percent of the people who are talking about raising the minimum wage are discussing the alternative of the EITC, and less than four percent of the people who discuss the EITC mention it as an alternative to the minimum wage. The numbers are even more stark for Google News Search and Google Blog Search. And when I ventured into the blogosphere to ask high profile bloggers how they would respond to the position that an expansion of the EITC would be a much more effective and equitable way of helping the working poor than raising the minimum wage, most of them had never even heard of the EITC. Quite a few of them contacted me by private e-mail to ask me to provide them with more information before they responded publicly.

This ignorance is not limited to the blogosphere. In fact, even among the most well-informed and well-educated scholars, the EITC remains a well-kept secret. To wit, according to Dr. Andrew Leigh of the Australian National University, "While Econlit contains over 2000 articles and books on minimum wages, and over 150 on Earned Income Tax Credits (EITCs), only 20 articles or books deal with the two topics together." This is where the problem begins and ends, as few people take the time to perform independent research on a topic. Even the most well-informed and well-educated person prefers to rely upon experts.

If you have a serious tax delinquency you may want to enlist the services of a tax attorney. Or if you are starting up talk to a Business lawyer to make sure you have a solid accounting system in place.

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Sunday, July 09, 2006

CEO Compensation and the Minimum Wage

While reviewing the blogosphere for opinions on the ongoing minimum wage debate, I found that more and more advocates of raising the minimum wage are focusing on the growing gap between CEO compensation and the minimum wage, which prompted me to ponder the relationship between these two metrics. I guess I'm supposed to be outraged by the fact that CEOs make so much money, but I'm not. I guess I'm also supposed to be outraged by the fact that the minimum wage has not kept pace with CEO compensation, but I'm not. What does one have to do with the other?

If your objective is to help the working poor, then the best way to do so is through an expansion of the Earned Income Tax Credit, as I have pointed out on more than one occasion recently. In striking contrast, raising the minimum wage is not likely to have any impact on the working poor, since most of the working poor actually make much more than the minimum wage. That's one issue. The other issue is how much CEOs make.

While statistics can be very misleading, I am willing to accept, arguendo, that CEOs make pretty good money. However, if a CEO makes a company profitable, then he or she is worth more money. On the other hand, if a CEO is running a company into the ground, then he or she should make less money or even be fired. If the board of directors for a company fails to observe these basic principles, they will either (a) be unable to attract qualified CEO candidates or (b) lose the confidence of stockholders and (thus) lose control of the company.

Because of the enormous competition for qualified CEOs in the United States, the compensation for those CEOs is seldom tied to performance. Consequently, once someone lands a job as a CEO at a particular company in the United States, they are usually free to run that particular company into the ground while lining their own pockets. In practice, however, few CEOs actually do this, and the astonishing rise in compensation for CEOs in the United States is a result of the fact that already large companies continue to get bigger and bigger, thereby increasing competition for the small handful of truly qualified CEOs.

Saturday, July 08, 2006

Simplifying the Minimum Wage Debate

In a series of recent blog posts here and in comments left on other blogs, I have tried to draw attention to the fact that expanding the Earned Income Tax Credit (EITC) is a much more effective and equitable way of helping the working poor than raising the minimum wage. Most advocates of raising the minimum wage that I encounter have never heard of the EITC. Of those who have, many seem to believe that the minimum wage and the EITC can work in tandem to help the working poor, a belief that completely ignores the fact that over two thirds of those who earn minimum wage do not live in poverty and that many of the working poor already make quite a bit more than the minimum wage.

Among those who acknowledge the efficacy of the EITC over minimum wage laws, the issue then becomes one of funding. To wit, "Where's the money for an expansion of the EITC going to come from?" Ironically enough, advocates of raising the minimum wage conveniently ignore this issue when it is asked of them, relying upon empirical studies that suggest that raising the minimum wage does not place an undue burden upon employers. Some go even further, suggesting that raising the minimum wage would raise federal revenue from payroll taxes, once again ignoring the fact that someone has to pay for those tax increases. To those who suggest that taxing employers with the minimum wage is somehow more equitable than expanding the EITC, this once again ignores the fact that the benefits of this tax do not go to the working poor, but to teenagers and spouses of people who do not live in poverty. In this sense, these people should be in the same class as volunteers and interns who are willing to work for no pay whatsoever to gain work experience that they can then use to go out and get a better job.

In a recent comment left on my blog, an anonymous poster muddied the waters once again:
"Again you see many pundits promoting the EITC not realizing that many of the working poor don't file income taxes to begin with - so they don't access this 'benefit' - how do I know? Having worked in the division of food stamps/medicaid for the state I'm in, one form of income verification is your most recent tax return - many don't have one. So let's stop looking at how to help the poor from the viewpoint of middle class America, because we will never ever understand poverty. My clients wanted the cash - they wanted the money on their pay so they could survive in the present."
For the various reasons set forth above, the fact that many EITC benefits go unclaimed does not argue in favor of raising the minimum wage. Rather, what this indicates is that advocates of raising the minimum wage who are aware of the EITC are hurting the working poor by confusing them. Indeed, these people are exploiting the working poor for political gain.

For matters dealing with employment or labor law consult the services of a qualified employment lawyer or a workers compensation lawyer based on your specific legal needs.

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Tuesday, July 04, 2006

Declaration of Independence

In CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

                    When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.__________ We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness._____ That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,___ That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security._____ Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world._____ He has refused his Assent to Laws, the most wholesome and necessary for the public good._____ He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them._____ He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only._____ He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures._____ He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people._____ He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within._____ He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands._____ He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers._____ He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries._____ He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance._____ He has kept among us, in times of peace, Standing Armies without the consent of our legislatures._____ He has affected to render the Military independent of and superior to the Civil power._____ He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:_____ For Quartering large bodies of armed troops among us:_____ For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:_____ For cutting off our Trade with all parts of the world:_____ For imposing Taxes on us without our Consent:_____ For depriving us, in many cases, of the benefits of Trial by Jury:_____ For transporting us beyond Seas to be tried for pretended offences:_____ For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:_____ For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:_____ For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever._____ He has abdicated Government here, by declaring us out of his Protection and waging War against us._____ He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people._____ He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation._____ He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands._____ He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions. In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people. Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends._____
     We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.____ And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

Button Gwinnett
Lyman Hall
Geo. Walton
Wm. Hooper
Joseph Hewes
John Penn
Edward Rutledge
Thos. Heyward Junr.
Thomas Lynch Junr.
Arthur Middleton
John Hancock
Samuel Chase
Wm. Paca
Thos. Stone
Charles Carroll of Carrollton
George Wythe
Richard Henry Lee
Ths. Jefferson
Benj. Harrison
Thos. Nelson Jr.
Francis Lightfoot Lee
Carter Braxton
Robt. Morris
Benjamin Rush
Benj. Franklin
John Morton
Geo. Clymer
Jams. Smith
Geo. Taylor
James Wilson
Geo. Ross
Caesar Rodney
Geo. Read
Tho. McKean
Wm. Floyd
Phil. Livingston
Fran. Lewis
Lewis Morris
Rich. Stockton
Jn. Witherspoon
Fras. Hopkinson
John Hart
Abra. Clark
Josiah Bartlett
Wm. Whipple
Sam Adams
John Adams
Robt. Treat Paine
Elbridge Gerry
Step. Hopkins
William Ellery
Roger Sherman
Sam Huntington
Wm. Williams
Oliver Wolcott
Matthew Thornton

Monday, July 03, 2006

Why Minimum Wage Laws Do More Harm Than Good

My recent adventures in the blogosphere seem to have educated quite a few advocates of the minimum wage about the existence and advantages of the Earned Income Tax Credit, and yet many advocates of the minimum wage still seem to fall back upon the notion that somehow these two programs can work in tandem to fight poverty. Nothing could be further from the truth, and I am astonished that anyone would come to such a conclusion. Indeed, I took great care to point out that the minimum wage does very little to help the working poor. If anything, raising the minimum wage simply creates the illusion that something worthwhile is being done and prevents positive changes from taking place. This is not unlike giving spare change to a homeless person.

I have no illusions about being able to solve poverty, but I am more than willing to support any government program that actually helps the working poor, and I have yet to see any economist weigh in against an expansion of the Earned Income Tax Credit. Speaking as a libertarian, the EITC can be justified by virtue of the fact that it reduces entitlement spending, gives an economic boost (from the ground up) to one of the most inefficient sectors of the economy, and increases workforce participation. In striking contrast, the best that can be said about the minimum wage is that there is less and less empirical evidence to indicate that it is the big job killer that most economists believe it to be.

Can government do more to help the working poor? Probably.

Is increasing the minimum wage going to help the working poor? Definitely not.

In 1933, when the federal government introduced the first minimum wage law in the United States, no less than 500,000 black workers lost their jobs. [Citation.] These black workers were replaced by better educated, more skilled white workers. And while there is less and less empirical evidence to indicate that the minimum wage is still the big job killer that most economists believe it to be, there is no evidence whatsoever to indicate that an increase in the minimum wage will actually help the working poor.

Over two thirds of those who work for the minimum wage do not live in poverty. Rather, they are people who can be claimed as a dependent by someone who earns a pretty decent wage or salary -- i.e., the spouse or child of a primary breadwinner. In striking contrast, the working poor are often single parents who earn a great deal more than the minimum wage and many of the working poor who know about the EITC are lifted out of poverty by collecting it.

The biggest problem with the EITC is that many people who are eligible for it do not claim it. And after very careful consideration, I think that the biggest reason for this sad state of affairs is because so many people who argue in favor of raising the minimum wage do not even bother to mention the EITC. If they don't know about it, that's understandable. But when the facts are made clear, it is inexcusable to argue for an increase in the minimum wage rather than arguing for an expansion of the EITC.

Sunday, July 02, 2006

Cowardly Censorship at

While using Google's Blog Search Beta to find out what people on the blogospshere were saying about the minimum wage issue, I found myself back at, where I found a somewhat seasoned post that narrated Bill Frist's successful gamesmanship wherein he torpedoed the Senate's recent minimum wage bill by tying it to the abortion issue. Posturing and invective aside, what caught my attention was a comment by one "Jim" entitled Another gutless Libertarian Hit and Run Poster wherein "Jim" asserted:

Notice how they run when asked a question that reveals their "Commie Status"?
As I narrated in a previous blog post, my discourse with the people over at was cut short when I suddenly found my account disabled after several posts. It's interesting how the folks over there at interpret the silence of their opponents as victory. Did it ever occur to them that their cowardly moderators might be silencing the opposition?