This New York Times editorial from 1987 advocates eliminating the minimum wage, which was $3.35/hour at the time. No doubt the current editors would disagree with their predecessors. However, the suggestion to expand the Earned Income Tax Credit was a good idea then and is a good idea now. The EITC is basically a way to distribute the cost of the minimum wage, and expanding the EITC in exchange for repealing the minimum wage would be a huge win.
Perhaps the mistake here is to accept the limited terms of the debate. The working poor obviously deserve a better shake. But it should not surpass our ingenuity or generosity to help some of them without hurting others. Here are two means toward that end: Wage supplements. Government might subsidize low wages with cash or payments for medical insurance, pensions or Social Security taxes. Alternatively, Washington could enlarge the existing earned income tax credit, a ''negative'' income tax paying up to $800 a year to working poor families. This would permit better targeting, since minimum-wage workers in affluent families would not be eligible. Training and education. The alternative to supplementing income for the least skilled workers is to raise their earning power in a free labor market. In the last two decades, dozens of programs to do that have produced mixed results at a very high cost. But the concept isn't necessarily at fault; nurturing the potential of individuals raised in poverty is very difficult. A humane society would learn from its mistakes and keep trying.The idea of using a minimum wage to overcome poverty is old, honorable - and fundamentally flawed. It's time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.
(HT: James Taranto.)
