Mankiw makes an argument against raising the minimum wage
Mankiw makes an argument against raising the minimum wage.
My two big issues with this is that the EITC acts as a de-facto subsidy to those who hire low wage workers. This subsidy would, (using Mankiw’s logic) dis-incentivize productivity gains via automation and advantage industries that are built around low-wage, low skill work.
So, why should the income tax system be used to subsidy low-wage, low-skill, low productivity workers and the industries that require them rather than advantage higher-skill, higher-wage higher productivity work?