As states and cities respond with higher minimum wages to the “Fight for $15” protests, some economists have called for boosting the Earned Income Tax Credit instead. Yet others insist that the minimum wage complements the EITC by ensuring that the benefits go to workers rather than employers. However, the minimum wage achieves this by preventing the EITC from increasing labor force participation. This is a problem given the research showing that work has positive spillovers for low-income households. In other words, the minimum wage does not complement the EITC, it undermines it.
The EITC, An Alternative to a Higher Minimum Wage via Dismal Scientist