Holy smoke Batman! We can reduce poverty

Added September 5th, 2014 by Judy Putnam | Email This Entry Email This Entry
Judy Putnam

Like Batman and Robin, raising the state Earned Income Tax Credit and minimum wage are best when working together, a new report concludes.

The two strategies are better than one, according to State Income Taxes and Minimum Wages Work Best Together, by the Center on Budget and Policy Priorities.

The dynamic duo complement one another to boost income, widen the path out of poverty and reduce income inequality.

Michigan has increased the minimum wage modestly, starting with a 75-cent an hour bump on Monday to $8.15 an hour. It will eventually go to $9.25 by 2018.

While a positive move, the motivation behind the increase was to sidestep a popular ballot initiative to take it to $10.10 an hour, index it to inflation, and eventually raise the tipped wage to that level, meaning that waiters and other tipped workers would earn the regular minimum hourly wage from employers, not count on tips to make up the difference. Polls showed the public supported the proposal, which narrowly missed the November ballot.

Michigan could and should do more. The state EITC was slashed from 20% of the federal credit to 6% of the federal credit, starting in 2012. That means that more than 1 million children living in households qualifying for the EITC have less income and more than 15,000 families fell below the poverty line because of that decision.

Restoring the state EITC and raising the minimum wage even more than planned would lift families from poverty, reward work and get our economy moving.

And holy cow! That just makes sense.

— Judy Putnam

 

2 Responses to “Holy smoke Batman! We can reduce poverty”

  1. Luke says:

    Hello, I am presenting this issue to my Foundations for Social Welfare Policy course and I am having difficulty locating any information on the “sidestep” Michigan took to avoid raising tipper employees wages. I was wondering if you could provide your sources for this article so that I could present this issue to my class? Thanks in advance!

  2. Judy Putnam Judy Putnam says:

    Luke,

    Check out this Mlive article explaining the dynamics.

    http://www.mlive.com/lansing-news/index.ssf/2014/05/how_they_voted_michigan_lawmak.html

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