Date: 6/5/2015
Paul Martin wrote a letter last week pointing out that the Earned Income Tax Credit (EITC) is pure income redistribution, and suggested it would be unnecessary if workers were paid the so-called “living wage.” He is right about the first statement and very wrong about the second.
It’s a fact that one cannot raise a family on minimum wage. As a society, many people in Massachusetts feel that we are rich enough to afford to supplement the income of working families by taxing the broad population of working people who earn good wages and transferring some of that income to those who are at minimum wage, under the EITC concept. But Paul Martin and his good liberal friends believe it would be fairer if they did not have to pay. Instead they want to force other people (a much smaller group known as employers) to pay the money that society thinks the minimum-wage person should receive. If you agree with income distribution, this is called running away from your responsibilities and sticking someone else, in this case those “evil corporations.”
The trouble is those “evil corporations” aren’t going to be able to hire people who can’t perform work worth paying $15 and hour for. There is no Massachusetts law protecting local pizza shops, hardware stores, dry cleaners, landscapers etc., etc. from going broke if their expenses are out of line with the prices they can charge. They don’t have the money to bear society’s costs. So they will not hire teenagers or those with no high school degree. They will automate. They will pay overtime. They will go out of business.
Under the EITC, workers with families get a state (and federal) subsidy to boost their income, while workers without families (teenagers, first jobs, no high-school, etc.) get a paying job, even if it’s minimum wage. Under Martin’s Minimum Wage alternative, working families get the same income, smaller stores and restaurants go out of business, and everybody else gets to sit home idle. Guess which alternative is better for the economy?
Pat Henry
East Longmeadow
