![]() ![]() A social safety net should be a bridge to the market economy, not become a way of life. Giving people cash would help them meet their immediate needs, while slowly phasing out the benefit would put them on the path towards self-sufficiency. In some cases, a modest increase in income can lead to a large drop in benefits, in effect creating a tax rate greater than 100%.Ī single cash benefit that phases out as people earn more money would be easier for people to use and encourage work. Many programs foster dependency by phasing out benefits as fast as people earn additional money. A tangled web of local, state, and federal programs with different eligibility rules and benefits schedules is confusing and hard to use. ![]() The federal, state, and local governments should simplify their social safety net programs to further encourage work. Unlike the minimum wage, tax credits like the Earned Income Tax Credit (EITC) increase employment, and working full-time is the best way to stay out of poverty. We should strive to find ways to mitigate it. Supporters of a higher minimum wage are right about one thing: Poverty is a problem, especially chronic poverty. However, higher minimum wages are also associated with declines in children’s test scores. Regarding families, there is evidence that higher minimum wages cause mothers to spend more time with their children. Higher minimum wages also seem to increase risky behavior such as drinking but reduce suicides. Some studies find a higher minimum wage improves diet or reduces obesity, while others find a higher minimum wage increases smoking and reduces exercise. ![]()
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