Why the EITC Doesn’t Make Work Pay

Alstott offers an evaluation of the significance of the credit and, in a historical spirit, hark back to an earlier, critical perspective on the earned income tax credit (EITC)--a perspective rarely heard in recent years. She argues that these concerns remain apt, despite the expansion of the EITC and oft-repeated praise for its importance as an antipoverty program. Moreover, she highlights three features of U.S. law that constrain the effectiveness of the EITC in improving the wellbeing of low-income workers and their children: labor and employment laws that structure markets that produce low wages and harsh working conditions, laws that condition access to primary goods on market earnings, and a social safety net with gaps through which low-income workers often fall. Furthermore, she suggests the importance of reforms in the laws governing labor markets, consumption opportunities, and the social safety net.