Expand and Reform the Earned Income Tax Credit

Governor Cuomo’s push for an increase in the minimum wage has a worthy goal—providing workers with enough income to support their families. That’s a goal most of us support.

Yet as an anti-poverty strategy, a $15 minimum wage has a number of flaws, the sum of which are fatal. First, it is a shotgun blast that helps ALL low wage workers, not just breadwinners of families in poverty. We’re effectively increasing the sales tax on consumers (as prices will rise) and taxes on business (as profits will fall) and distributing the benefit to the teenage children of the middle class as well as people in poverty. Second, it eliminates jobs for the most vulnerable. Those who are the most in need are often the least skilled, thus are the workers who will get passed over for jobs at the higher wage. The risk is greatest in sectors where technology is displacing labor—fast food comes to mind. The impact on employment is most assuredly negative, although we can debate the magnitude. These points (and others) have been made in this space before. Read more »