Minimum wage: Debate on this is going to focus on whether minimum wage hikes are a job-killer or whether their opponents are big ol' meanies. A perhaps more productive lense is Dylan Matthews' point about cost-effectiveness. As detailed in a 2007 CBO study (PDF) is the minimum wage is surprisingly ill-targeted at the poor. The minimum wage hike enacted that year cost employers $11 billion in aggregate higher pay while only delivering $1.6 billion to poor families. A hike in the Earned Income Tax Credit, by contrast, delivers more than half its money to the genuinely poor. The difference is that an EITC increase has a budgetary cost to the federal government while the minimum wage doesn't. This kind of inefficient policy workaround is what you get when people become excessively focused on the formal aspects of federal budgeting.
---SPSmith
---SPSmith
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