An article in the Sun Journal April 25 included claims that monthly rent payments remain out of reach for many low-income Mainers. As legislators and advocates look for ways to provide relief to those struggling to stay afloat, it is important to consider which policies work best.
Unfortunately, the poverty-reduction strategy that is most popular — raising state and federal minimum wages — has also proven to be one of the least effective.
New research from economists at the University of Alabama and East Carolina University finds that 85 percent of poor families received no benefit from the 40 percent increase in the federal minimum wage that took place between July 2007 and July 2009. This means that part-time workers from middle-class families are getting a bigger paycheck, while the poorest continue to suffer.
By contrast, an expansion of the Earned Income Tax Credit would have lifted 1.95 million Americans out of poverty — 2.5 times more than the federal wage hike.
Michael Saltsman, research fellow,
Employment Policies Institute, Washington, D.C.