What can we do instead of raising minimum wage?
Rather than a minimum wage increase to $15 per hour, legislators could propose a tax cut for anyone making $15 an hour or less to qualify as tax exempt. This would effectively give them a $3 per hour wage increase.
Are there methods other than a higher minimum wage that could raise the incomes of low wage workers without reducing employment among minority youngsters?
Are there methods other than higher minimum wage that could raise the incomes of low-wage workers without reducing employment among minority youngsters? Refundable tax credit programs like the Earned Income Tax Credit already successfully raise incomes of low-wage workers without affecting employment.
What is a binding minimum wage?
A “binding” minimum wage that is set higher than the competitive equilibrium wage reduces employment for two reasons. Most important, workers have varying skill levels, and a higher minimum wage will lead employers to hire fewer low-skilled workers and more high-skilled workers.
Why do unions want higher minimum wage?
Labor unions have a particular interest in minimum wage increases since their contracts are directly tied to the minimum wage. When union members get a pay increase, labor bosses often secure higher revenues from union dues that are a percentage of employees’ pay. There’s also a political motivation.
What are the alternatives to raising the minimum wage?
Increasing the Earned Income Tax Credit, or EITC, is a widely-proposed alternative raising the minimum wage. This federal program benefits middle- and low-income households. According to the IRS website, the maximum amount that a family could receive annually through this program is currently around $6,000.
Can the EITC help solve the minimum wage crisis?
Increasing Earned Income Tax Credits (EITC) offers a solution to minimum wage increases that don’t go far enough to help those who need it most, suggests Harry J. Holzer in Time magazine. Low-income wage earners receive EITC tax credits and government refunds at tax time to incentivize work.
Should the earned income tax credit be raised?
Proponents of raising the Earned Income Tax Credit say that doing so would more effectively aid low-income families than raising the minimum wage, since some minimum-wage earners are actually teens living in middle-class households.