Memo to Barack Obama: Subsidizing low-wage work is an inefficient anti-poverty program

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Barack Obama, speaking to the BlogHer community, responded to a question about the economy and "helping families break the cycle of poverty."

Obama made his number one answer the Earned Income Tax Credit, or EITC:

It starts with just making sure that if people are working they get an adequate income.

So the earned income tax credit, expanding that so that low-wage workers are lifted out of poverty, if they are committed to working. That I think is the best anti-poverty program we can have.

Wrong, Senator Obama.

Money conditional on low-wage work subsidizes the worst jobs and the worst employers in our economy.

Ensure that no one needs to work for $7 an hour to survive, and there won't be any $7 an hour jobs– there will be better-paying jobs, and more empowering jobs, doing things that are more productive for an economy.

And if big employers refuse to pay living wages even if no one will show up for less, and replace every minimum wage worker with more computerized machines, if people have money to spend on one another, everyone able to work will have the opportunity to make a living meeting one another's needs.

Just a little thought about justice and practical economic solutions become much clearer.

Currently, the fact of inequality itself generates an unjust situation that pushes toward more inequality. Without wealth, one has less opportunity to invest in one's own skills and connections and far less bargaining power to hold out for a fairer deal. Understanding this and taxing wealth – which has much less of a negative incentive on economically productive activities than taxing income or spending – with immediate redistribution of taxed wealth to all people, not to government programs, could ensure not only that no one lives in poverty, but that the cause poverty is addressed.

The root cause of low wages is lack of power— a lack of power to demand fairer compensation, a lack of power to change our life situation to obtain more rewarding work, a lack of power to make a living doing things that benefit our own community directly (rather than filtered through a system that rewards the wealthy at the expense of everyone else).

The Earned Income Tax Credit – as important as it is in mitigating poverty, and as much better as it is as an incentive and a sense of worth than being paid to not work – fundamentally increases the power of those who already have too much power over the people they hire, the larger employers that tend to pay low wages on the legal job market (as opposed to small businesses more likely to be "under the table"). A true anti-poverty program increases the power of people to control their own lives.