On Apr 3, 2008, at 6:25 AM, Joseph Catron wrote:
> Perhaps Doug and others will argue that this is fallacious, and that
> ANY public benefit is an indirect subsidy to employers, but until they
> mount serous arguments that we should discount ALL public benefits
> which might save a boss somewhere the odd buck, in favor of
> concessions extracted from those same employers, I'll be hard-pressed
> to take them seriously.
There's a big political and economic difference between universal programs - social security, public health insurance - and targeted ones like the EITC. Countries with shitty jobs and income distributions prefer targeted programs; social democratic countries emphasize universal ones. (There's an old LIS working paper that made this point rigorously, but it's clear to anyone who compares social policies in Sweden and the U.S. that it's true.) Universal programs - those that decommodify material well-being - improve the lives and strengthen the bargaining position of the working class. Targeted ones make workers more dependent on a judgmental and intrusive state.
Social dem countries have also tried to compress the income distribution by taxing those at the top and disproportionately raising the wages of those at the bottom. The point of the EITC is to leave our lopsided wage structure intact (and to make welfare reform more palatable).
Doug