State Earned Income Tax Credits and Minimum Wages Work Best Together

Source: Erica Williams and Chris Mai, Center on Budget and Policy Priorities, September 3, 2014

From the summary:
As states continue to recover from the recession, state lawmakers should look to help working families recover, too. They can do this effectively by strengthening their states’ earned income tax credits (EITCs) and minimum wages. EITCs and the minimum wage are twin pillars of making work pay for families that earn low wages. They boost income, widen the path out of poverty, and reduce income inequality. They also help to build a stronger future economy by putting children on a better path. For low-income young children, there is evidence that the lift in family income can result in improved learning and educational attainment and higher future earnings in adulthood. Strengthening either a state’s minimum wage or a state EITC will boost incomes for low-wage working families, but these policy improvements are particularly effective in combination, for a number of reasons: