Comments for The Arithmetic of the Minimum Wage and the Earned Income Tax Credit at http://www.cepr.net , comment 1 to 2 out of 2 comments http://www.cepr.net Thu, 23 May 2013 07:15:28 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/the-arithmetic-of-the-minimum-wage-and-the-earned-income-tax-credit#comment-16578 Raising minimum wage raises labor costs. This gives employers incentive to improve worker productivity by investing in equipment and training. Without minimum wage, business can tolerate worker inefficiency if the cost of hiring 2 inefficient workers at very low wage is less than the costs of worker training or investment in productivity increases. Thus, a higher minimum wage provides incentives to make workers more productive, provides incentives to improve process efficiency and allow both business and workers to make together more income than a system with low wage low efficiency workers. This dynamic is very clear in developing countries with cheap labor and no minimum wage. There is plenty of unskilled labor that can be hired cheaply enough that low productivity can be tolerated. However, those worker wages are often too low for an adequate standard of living. - bakho Mon, 21 May 2012 02:22:05 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-arithmetic-of-the-minimum-wage-and-the-earned-income-tax-credit#comment-16577 The Earned Income Tax Credit is targeted relief for low-income parents. A single mom with one child would not become ineligible with the minimum wage increase. However, an unmarried taxpayer earning the current minimum wage ($7.25)and working full time would not be eligible for the credit. [url]http://www.irs.gov/pub/irs-pdf/p596.pdf[/url] - Ron Alley Mon, 21 May 2012 01:32:18 +0100