An Alternative To Raising The Minimum Wage, Ctd

Increasing the Earned Income Tax Credit (EITC) is a more effective and cheaper response to poverty than raising the minimum wage. Josh Barro explains why tinkering with the EITC isn’t on the table:

The big reason is that a bigger EITC would grow the federal budget deficit, while a minimum wage increase is “free.” Of course, it’s not really free — just like the EITC, it’s a transfer to low-wage workers, though instead of being financed with taxes it will come mostly out of business profits; some of the transfer will come from consumers in the form of higher prices.

But the transfer is done off the government’s books, which is what counts in Washington.