The fatal flaw of the universal basic income is the same one that hampers most existing anti-poverty programs: a lack of emphasis on encouraging work. Instead, these programs have sought to provide directly whatever poor people happen to lack. The result has been more than 50 years of massive public outlays, with little benefit other than making recipients dependent on government. The ongoing rise in worker’s disability claims follows a long string of recent expansions of welfare programs, such as food stamps, housing assistance, and even free phones to boost the standard of living among poor citizens.
One study found that a $1,000 increase in the EITC led to a 7.3 percentage point increase in employment and a nearly 10 percentage-point reduction in the share of families in poverty. Its benefits are far-reaching, too. For lower-education single mothers, an additional $1,000 in the EITC is associated with a 6.7 to 10.8 percent drop in the share of infants being born with low birth weights, with bigger impacts for black mothers.
New research by David Neumark and Peter Shirley of the University of California, Irvine, shows that the effects are not just short-term, either. The EITC does not just boost earnings and reduce poverty rates when it is received, but improves the lifetime earnings trajectories of unmarried women with kids.
Construction workers in California are among the highest paid in the nation, according to figures from the Bureau of Labor Statistics. Fixr.com, an online website that provides cost guides, comparisons and other information for people looking to do remodeling or repair projects, crunched the Bureau of Labor Statistics numbers to create a state-by-state ranking of average hourly wages for workers in the industry.
In U.S. cities with the tightest labor markets, workers are finding something that’s long been missing from the broader economic expansion: faster-growing paychecks. Workers in metro areas with the lowest unemployment are experiencing among the strongest wage growth in the country. The labor market in places like Minneapolis, Denver and Fort Myers, Fla., where unemployment rates stand near or even below 3%, has now tightened to a point where businesses are raising pay to attract employees, often from competitors.
We use longitudinal data on marriage and children from the Panel Study of Income Dynamics to characterize women’s exposure to the federal and state Earned Income Tax Credit (EITC) during their first two decades of adulthood. We then use measures of this exposure to estimate the long-run effects of the EITC on women’s earnings as mature adults. We find some evidence indicating that exposure to a more generous EITC when women were unmarried and had young (pre-school) children leads to higher earnings and hours, and perhaps wages, in the longer run. We also find some evidence that exposure to a more generous EITC when women had young children but were married leads to lower earnings and hours in the longer run.