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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Nadine Carroll who wrote (91829)	8/25/2001 2:45:30 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Nadine - <<< The real problem is not the wage level, but the skill and productivity level. Instead of distorting the entire labor market, it probably makes more sense for government subsidies to employers for hiring the lowest skilled workers. >>> Don't we have a functional equivalent of this in the Earned Income Tax Credit? Not at all. If a potential employee is only worth $4 an hour to an employer and the legal minimum wage is $6 an hour, there will be neither earned income nor an earned income tax credit. If, on the other hand, the government provides a $2 per hour low income wage subsidy to the employer, the net labor cost of the $6 an hour minimum wage is now $4 an hour to the employer and the employee can now be hired, and potentially be eligible for the earned income tax credit as well, although the two programs may well be re-aligned in practice. Regards, Don