Fortune Small Business says that a $1 an hour increase in the national minimum wage is in the works. Surprisingly, business groups don’t seem that upset at the idea. Why? They’re dealing with even greater increases in costs for employee health insurance premiums for several years running.
The final paragraph of the story illustrates how political posturing undermines the alleged rationale for policy changes:
Even proponents of the minimum-wage hike agree that it is a blunt instrument: Much of the added pay will go not to the working poor but to the children of prosperous families. Clearly, a better approach to address family poverty is to expand the Earned Income Tax Credit, which returns to the working poor a portion of the regressive federal payroll taxes that they pay. But in Washington, any boost to the EITC can be portrayed as “deficit spending.” Most pols prefer to take the credit for a minimum-wage hike and let small-business owners pick up the tab.