Aspen is a place for leaders to lift their sights above the possessions which possess them. To confront their own nature as human beings, to regain control over their own humanity by becoming more self-aware, more self-correcting, and hence more self-fulfilling.
Walter P. Paepcke, Aspen Institute Co-Founder
Aspen Institute
Expanding Economic Opportunity for More Americans, and Longform
The Higher Wages Tax Credit
February 4, 2019
Author
David Neumark
, Distinguished Professor of Economics and Director, University of California, Irvine
In the face of continued low employment, stagnant wages, persistent poverty, and rising inequality, minimum wage increases will likely continue to hold appeal as a policy response. In this paper, I propose a Higher Wages Tax Credit (HWTC) to partially offset the costs imposed by minimum wage increases on firms that employ low-skilled labor. Following a minimum wage increase, the HWTC would provide a tax credit of 50% of the difference between the prior minimum wage and the new minimum wage, for each hour of labor employed; the credit would phase out at wages higher than the minimum wage, and as wage inflation erodes the real cost of higher nominal minimum wages. The HWTC would reduce the incentive for employers to substitute away from low-skilled workers in the face of minimum wage increases, thus mitigating the potential adverse effects of minimum wage increases while simultaneously preserving and possibly enhancing some of the benefits of minimum wage hikes. The credit is also intended to infuse the debate around increasing the minimum wage with a more realistic accounting of the costs and benefits of such a policy by partially transforming minimum wage increases into a more conventional redistributive policy.
Related
LongformPublicationsSection 4: Strengthening Practices to Improve Job Quality
While the rideshare apps have increased convenience, they’ve eroded job quality. See how the Drivers’ Cooperative is helping to end exploitative conditions.
UWU, led by Job Quality Fellow Neidi Dominguez, engages unemployed/underemployed workers, a population that has not been mobilized at scale since the 1930s.
MIT Center for Constructive Communication Director Deb Roy explains how the caricatures Republicans and Democrats paint of each other diverge from reality, and the ways local newsrooms can leverage their “trust capital” and emerging technology to promote listening and understanding amid disagreement.
