Editing Minimum wage (section)

==Alternatives==
Economists and other political commentators have proposed alternatives to the minimum wage. They argue that these alternatives may address the issue of poverty better than a minimum wage, as it would benefit a broader population of low wage earners, not cause any unemployment, and distribute the costs widely rather than concentrating it on employers of low wage workers.

===Basic income===
{{main|Basic Income}}
A [[basic income]] (or [[negative income tax]] – NIT) is a system of [[social security]] that periodically provides each citizen with a sum of money that is sufficient to live on frugally. Supporters of the basic-income idea argue that recipients of the basic income would have considerably more bargaining power when negotiating a wage with an employer, as there would be no risk of destitution for not taking the employment. As a result, jobseekers could spend more time looking for a more appropriate or satisfying job, or they could wait until a higher-paying job appeared. Alternatively, they could spend more time increasing their skills (via education and training), which would make them more suitable for higher-paying jobs, as well as provide numerous other benefits. Experiments on Basic Income and NIT in Canada and the United States show that people spent more time studying while the program{{which|date=June 2019}} was running.<ref>
{{cite web
 |url= http://www.economonitor.com/dolanecon/2014/08/25/a-universal-basic-income-and-work-incentives-part-2-evidence/
 |title=A Universal Basic Income and Work Incentives. Part 2: Evidence
|first= Ed
 |last=Dolan 
 |date=25 August 2014
|archive-url= https://web.archive.org/web/20140923224115/http://www.economonitor.com/dolanecon/2014/08/25/a-universal-basic-income-and-work-incentives-part-2-evidence/
 |archive-date= 23 September 2014
}}
</ref>{{request quotation|date=June 2019}}

Proponents argue that a basic income that is based on a broad tax base would be more economically efficient than a minimum wage, as the minimum wage effectively imposes a high marginal tax on employers, causing [[deadweight loss|losses in efficiency]].{{citation needed|date=December 2013}}

===Guaranteed minimum income===
A [[guaranteed minimum income]] is another proposed system of [[social welfare provision]]. It is similar to a basic income or negative income tax system, except that it is normally conditional and subject to a means test. Some proposals also stipulate a willingness to participate in the [[labor market]], or a willingness to perform [[community services]].<ref>{{cite web |url= https://news.google.com/newspapers?id=67osAAAAIBAJ&pg=766,4664677&dq=guaranteed+minimum+income+labor+market&hl=en |title=Suggestion: Raise welfare children in institutions |website=Star-News |date=28 January 1972 |access-date=19 November 2013}}</ref>

===Refundable tax credit===
A [[refundable tax credit]] is a mechanism whereby the tax system can reduce the tax owed by a household to below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system. Examples of refundable tax credits include the [[earned income tax credit]] and the additional [[child tax credit]] in the US, and [[working tax credit]]s and [[child tax credit]]s in the UK. Such a system is slightly different from a [[negative income tax]], in that the refundable tax credit is usually only paid to households that have earned at least some income. This policy is more targeted against poverty than the minimum wage, because it avoids subsidizing low-income workers who are supported by high-income households (for example, teenagers still living with their parents).<ref name="wbur">{{cite news|title=What The Research Says In The Minimum Wage Debate|agency=WBUR|date=28 April 2014|author=David Scharfenberg}}</ref>

In the United States, earned income tax credit rates, also known as EITC or EIC, vary by state—some are refundable while other states do not allow a refundable tax credit.<ref>{{cite web|url=http://www.stateeitc.com/map/index.asp|title=50 State Resources Map on State EITCs|publisher=The Hatcher Group|access-date=16 June 2010|url-status=dead|archive-url=https://web.archive.org/web/20090423021254/http://www.stateeitc.com/map/index.asp|archive-date=23 April 2009}}</ref> The federal EITC program has been expanded by a number of presidents including Jimmy Carter, Ronald Reagan, George H.W. Bush, and Bill Clinton.<ref>{{cite web|url=http://www.cbpp.org/cms/index.cfm?fa=view&id=1649|title=New Research Findings on the Effects of the Earned Income Tax Credit|work=Center on Budget and Policy Priorities |access-date=30 June 2010|url-status=live|archive-url=https://web.archive.org/web/20100617180942/http://www.cbpp.org/cms/index.cfm?fa=view&id=1649|archive-date=17 June 2010}}</ref> In 1986, President Reagan described the EITC as "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress."<ref>{{cite web |url=http://www.cbpp.org/cms/index.cfm?fa=view&id=134 |title=Tax Reform and Poverty |publisher=Center on Budget and Policy Priorities |first=Jason |last=Furman |date=10 April 2006 |access-date=7 December 2013 |url-status=live |archive-url=https://web.archive.org/web/20131213060957/http://www.cbpp.org/cms/index.cfm?fa=view&id=134 |archive-date=13 December 2013 }}</ref> The ability of the earned income tax credit to deliver larger monetary benefits to the poor workers than an increase in the minimum wage and at a lower cost to society was documented in a 2007 report by the [[Congressional Budget Office]].<ref>{{cite web |url=http://www.cbo.gov/ftpdocs/77xx/doc7721/01-09-MinimumWageEITC.pdf |title=Response to a Request by Senator Grassley About the Effects of Increasing the Federal Minimum Wage Versus Expanding the Earned Income Tax Credit |publisher=Congressional Budget Office |date=9 January 2007 |access-date=25 July 2008 |archive-url=https://web.archive.org/web/20080731074250/http://www.cbo.gov/ftpdocs/77xx/doc7721/01-09-MinimumWageEITC.pdf |archive-date=31 July 2008 |url-status=live}}</ref>

The [[Adam Smith Institute]] prefers cutting taxes on the poor and middle class instead of raising wages as an alternative to the minimum wage.<ref>{{cite press release |title=Comment: Minimum Wage rise risks harming workers; cut taxes on the poor instead |publisher=Adam Smith Institute |date=March 2019 |url=http://www.adamsmith.org/news/press-releases/comment-minimum-wage-rise-risks-harming-workers-cut-taxes-on-the-poor-instead |access-date=19 March 2014 |url-status=live |archive-url=https://web.archive.org/web/20140413142735/http://www.adamsmith.org/news/press-releases/comment-minimum-wage-rise-risks-harming-workers-cut-taxes-on-the-poor-instead |archive-date=13 April 2014 }}</ref>

===Collective bargaining===
Italy, Sweden, Norway, Finland, and Denmark are developed nations where legislation stipulates no minimum wage.<ref name=":0" /><ref name="NYT-20141027-LA" /> Instead, minimum wage standards in different sectors are set by [[collective bargaining]].<ref>{{cite news |url=https://news.google.com/newspapers?id=sqBfAAAAIBAJ&dq=minimum%20wage%20standards%20collective%20bargaining&pg=4131%2C2944514 |title=Labor Criticizes |work=Lewiston Morning Tribune |date=2 March 1933 |agency=Associated Press |pages=1, 6}}</ref> Particularly the Scandinavian countries have very high union participation rates.<ref name="Olson">{{Cite web|last=Olson|first=Parmy|title=The Best Minimum Wages In Europe|url=https://www.forbes.com/2009/08/31/europe-minimum-wage-lifestyle-wages.html|access-date=14 February 2023|website=Forbes|language=en}}</ref>

=== Wage subsidies ===
Some economists such as [[Scott Sumner]]<ref>{{Cite web|url=http://www.themoneyillusion.com/?p=10232|title=TheMoneyIllusion " You can't redistribute income . . |last=Sumner|first=Scott|website=www.themoneyillusion.com|access-date=11 August 2017|url-status=live|archive-url=https://web.archive.org/web/20170811222858/http://www.themoneyillusion.com/?p=10232|archive-date=11 August 2017}}</ref> and [[Edmund Phelps]]<ref>Phelps, Edmund S. "Low-wage employment subsidies versus the welfare state." ''The American Economic Review'' 84.2 (1994): 54–58.</ref> advocate a wage subsidy program. A wage subsidy is a payment made by a government for work people do. It is based either on an hourly basis or by income earned.<ref>{{Cite news|url=https://www.manhattan-institute.org/html/wage-subsidy-better-way-help-poor-7778.html|title=The Wage Subsidy: A Better Way to Help the Poor {{!}} Manhattan Institute|date=25 September 2015|work=Manhattan Institute|access-date=11 August 2017|url-status=live|archive-url=https://web.archive.org/web/20170811230231/https://www.manhattan-institute.org/html/wage-subsidy-better-way-help-poor-7778.html|archive-date=11 August 2017}}</ref><ref>{{Cite web|url=https://www.usnews.com/opinion/economic-intelligence/2015/08/19/wage-subsidies-are-better-than-raising-the-minimum-wage|title=A Better Wage Hike|last=Cass|first=Oren|date=19 August 2015|website=US NEWS|archive-url=https://web.archive.org/web/20150820110346/http://www.usnews.com/opinion/economic-intelligence/2015/08/19/wage-subsidies-are-better-than-raising-the-minimum-wage|archive-date=20 August 2015|url-status=dead|access-date=11 August 2017}}</ref> Wage subsidies lack political support from either major [[political parties in the United States|political party]] in the United States.<ref>{{Cite web|url=http://noahpinionblog.blogspot.com/2013/12/wage-subsidies.html|title=Noahpinion: Wage subsidies|last=Smith|first=Noah|date=7 December 2013|website=Noahpinion|access-date=11 August 2017|url-status=live|archive-url=https://web.archive.org/web/20170811224635/http://noahpinionblog.blogspot.com/2013/12/wage-subsidies.html|archive-date=11 August 2017}}</ref><ref>{{Cite news|url=https://www.motherjones.com/kevin-drum/2013/12/wage-subsidies-might-be-good-idea-republicans-will-never-support-it/|title=Wage subsidies might be a good idea, but Republicans will never support it|last=Drum|first=Kevin|date=3 December 2013|work=Mother Jones|access-date=11 August 2017|url-status=live|archive-url=https://web.archive.org/web/20170811224733/https://www.motherjones.com/kevin-drum/2013/12/wage-subsidies-might-be-good-idea-republicans-will-never-support-it/|archive-date=11 August 2017}}</ref>

===Education and training===

Providing education or funding apprenticeships or technical training can provide a bridge for low skilled workers to move into wages above a minimum wage. For example, Germany has adopted a state funded [[apprenticeship]] program that combines on-the-job and classroom training.<ref>{{cite web| url = https://www.theatlantic.com/business/archive/2014/10/why-germany-is-so-much-better-at-training-its-workers/381550/| title = Why Germany Is So Much Better at Training Its Workers| website = [[The Atlantic]]| date = 16 October 2014}}</ref> Having more skills makes workers more valuable and more productive, but having a high minimum wage for low-skill jobs reduces the incentive to seek education and training.<ref>{{cite web| url = https://work.chron.com/alternatives-raising-minimum-wage-18704.html| title = Alternatives to Raising Minimum Wage| work = Chron - Work| last1 = Dowd| first1 = Mary}}</ref> Moving some workers to higher-paying jobs will decrease the supply of workers willing to accept low-skill jobs, increasing the market wage for those low skilled jobs (assuming a stable labor market). However, in that solution the wage will still not increase above the marginal return for the role and will likely promote automation or business closure.