April 28, 2010
LETTER TO THE EDTOR: Expanding EITC Would Work Better than Raising Minimum Wage
A new report claims that monthly rent payments remain out-of-reach for many low-income West Virginians (“Report: Recession Pushes Rental Housing Out of Reach of Many Low-Income Americans,” April 25, link: http://archives.huntingtonnews.net/columns/100425-kinchen-columnsparallel.html). As legislators and advocates look for ways to provide relief to those struggling to stay afloat, it is important to consider which policies work best.
Unfortunately, the poverty-reduction strategy that is most popular -- raising state and federal minimum wages -- has also proven to be one of the least effective.
New research from economists at the University of Alabama and East Carolina University finds that 85 percent of poor families received no benefit from the 40 percent increase in the federal minimum wage that took place between July 2007 and July 2009. This means that part-time workers from middle-class families are getting a bigger paycheck, while the poorest continue to suffer.
By contrast, an expansion of the Earned Income Tax Credit (EITC) would have lifted 1.95 million Americans out of poverty -- 2.5 times more than the federal wage hike.
Michael Saltsman
Research Fellow
Employment Policies Institute
1090 Vermont Ave, NW #800
Washington, DC 20005
202-463-7650
Saltsman@EPIonline.org
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LETTER TO THE EDTOR: Expanding EITC Would Work Better than Raising Minimum Wage
A new report claims that monthly rent payments remain out-of-reach for many low-income West Virginians (“Report: Recession Pushes Rental Housing Out of Reach of Many Low-Income Americans,” April 25, link: http://archives.huntingtonnews.net/columns/100425-kinchen-columnsparallel.html). As legislators and advocates look for ways to provide relief to those struggling to stay afloat, it is important to consider which policies work best.
Unfortunately, the poverty-reduction strategy that is most popular -- raising state and federal minimum wages -- has also proven to be one of the least effective.
New research from economists at the University of Alabama and East Carolina University finds that 85 percent of poor families received no benefit from the 40 percent increase in the federal minimum wage that took place between July 2007 and July 2009. This means that part-time workers from middle-class families are getting a bigger paycheck, while the poorest continue to suffer.
By contrast, an expansion of the Earned Income Tax Credit (EITC) would have lifted 1.95 million Americans out of poverty -- 2.5 times more than the federal wage hike.
Michael Saltsman
Research Fellow
Employment Policies Institute
1090 Vermont Ave, NW #800
Washington, DC 20005
202-463-7650
Saltsman@EPIonline.org
Share This Story:
Make HNN Your Homepage (IE Users Only)
