Increased Income from a Minimum Wage Increase is Greater, and in most cases, Far Greater Than the Loss in Benefits and New Taxes Paid
Originally published by KRC-PBPC here. By Marc Stier and Diana Polson HARRISBURG—As Pennsylvania seriously considers raising the minimum wage for the first time in over a decade (and as the U.S. House prepares to vote on a bill to increase the minimum wage federally), concerns have been raised that workers receiving a higher wage also will face a “benefits cliff.” A benefits cliff occurs when individuals get a wage increase but the social benefits they lose and the taxes they pay increase more than their additional earnings, resulting in an overall reduction in a family’s standard of living. The Pennsylvania Budget and Policy Center today released two policy briefs examining the effects of a minimum wage increase to $15/hr in Pennsylvania. One brief examines a wage increase when compared to any cuts in benefits from programs/tax breaks like the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), the… Continue reading
