What is the earned income tax credit? It’s a refundable tax credit that functions as a low income wage subsidy. Here’s how it works:

The earned income tax credit (EITC) subsidizes low-income working families. The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum; both the percentage and the maximum credit depend on the number of children in the family. The credit then stays flat at that maximum as earnings continue to rise, but eventually earnings reach a phase-out range. From that point the credit falls with each additional dollar of income until it disappears entirely.

The link features a helpful graph that will give you a sense of how it operates and what it is set up to do. The EITC is just behind SNAP as the biggest welfare program aimed at helping poor families. It does a good job of that: “The Center for Budget and Policy Priorities, using Census Bureau data estimates that in 2012, ‘the credit lifted 6.5 million people out of poverty, including over 3 million children’” (see also the Poverty Calculator breakdown of EITC’s effect).

So all in all, a helpful program. And yet all is not well in the world of EITC policy evaluation; at National Affairs, Lawrence Mead has some concerns. Claiming that the EITC has been ‘oversold’ — that is, that its pro-work effects have been inflated by unrelated improvements in employment which merely provided the illusion of a dramatic work incentive — Mead lodges the following complaints:

“Even among advocates of work requirements, however, confusion reigns regarding how public policy can best encourage lower-income Americans to seek work. Increasingly, many on the left contend that we need not enforce work through the heavy-handed means that characterized the ’90s welfare reform — requiring welfare mothers to enter the work force and empowering case managers to make sure they did. Many liberals believe that it is enough to subsidize wages for those of meager means, and that the resulting incentive will motivate them to seek work on their own…

The chief evidence for this view is the supposed success of the Earned Income Tax Credit in lifting work levels among welfare mothers during welfare reform. The EITC subsidizes the earnings of low-income workers, thus effectively raising their wages. But its success in “making work pay” and combatting [sic] poverty among Americans who are employed has too easily been confused with success in causing more Americans to go to work…

….Further, work incentives assume that non-working adults want to work and will do so when the payoffs improve. First-hand accounts of low-income life, however, suggest that regular employment is usually not an immediate priority. Poor non-workers typically want to work, yet their lives are not organized around employment, as is true for the better-off. Single mothers are absorbed with family problems, while many men make money off the books without holding steady, legal jobs. Everyone struggles with immediate difficulties, mostly in private life, rather than working regularly to earn income….

…there are ways we might reform it [the EITC]. The credit as currently structured has no hour threshold, for instance, and that could be changed…Another way to help the credit promote work would be to support state-level staff to reach out to eligible people and persuade them to put in the working hours needed to claim the benefit…”

The whole story here, as told by Mead, is this: the EITC helps poor people absolutely, by giving them more money than they would have otherwise. What it doesn’t do as effectively as it’s been credited with, however, is force them to work. Mead is emphatic: the poor just constitutionally do not desire work; they fail to organize their lives around work, and instead become absorbed with what he appears to view as ancillary in their condition — family, children, and so forth. Therefore, by Mead’s lights, the EITC could make itself useful to the rest of us by forcing more work out of poor mothers punitively: take away the EITC from people who simply don’t work enough hours, and employ staff to ‘encourage’ them to work enough hours to acquire it. Arbeit macht frei.

 

It’s quite notable that in the first half of his piece, Mead frequently references ‘welfare mothers,’ ‘poor mothers’, and ‘single mothers.’ But in the latter part of his essay, when he is offering ideas on how to reform the EITC to force more work, he doesn’t mention ‘mothers’ — only ‘women’ and ‘men.’ You can sort of imagine why that might be.

For one, the notion that poor mothers aren’t ‘working’ is ludicrous. Remember when Ann Romney’s job was much, much harder than Mitt’s? The hardest job in the world, by some lights, never ends. You put in nine months of your own flesh and blood, then twenty odd more years of the same, and it’s a twenty-four-seven occupation. I don’t think the Romneys were wrong about this; it’s clear that in-home labor is work: otherwise, you wouldn’t be paying someone else to do it when you can’t or don’t want to. But as it stands, childcare costs money, and so do laundry services, private chefs, and maids. Poor mothers, like all mothers, work.

You don’t have to take it from me. Consider the American Enterprise Institute’s Charles Murray waxing sentimental about all the amazing things women do when they don’t have full-time jobs. Community vitality, he argues, rests principally with women who don’t work full-time, and who can devote themselves to family and friends more fully. Totally agreed; sounds great, wish we actually took it seriously.

And this isn’t a purely rhetorical point. If poor moms aren’t caring for their kids, cooking their food, and washing their clothes, someone will be doing it, and the poor mothers will be paying them — that is, if they can. But this certainly means that poor women who are trying to work up to the EITC threshold that Mead proposes are in a really, really screwed up position: having to pay some service to look after their kids while they try to make enough money to qualify for the EITC. So they’re bleeding money while not even making enough for welfare.

That’s dystopic in itself. But we should further ask: is it either good or right to discount the in-home labor mothers do? Why on earth would we value market labor over in-home labor, if we’re serious about this “hardest job in the world” rhetoric? Why would we want to force poor mothers to work — especially low-income jobs, the sort that are least accommodating to motherhood in general? The wise approach to me would be to say: poor mothers (even so-called “welfare mothers”) are already working; if they collect welfare benefits without putting in a particular threshold-amount of labor market hours, that’s perfectly fine, because they’re not indolent, just occupied with more serious things. Mead appears to want poor mothers to ‘organize their lives’ around working, but this should strike us all as an absurd reversal of priorities, and one without any clear social benefits, unless you are, as Mead is, really attached to labor market work.