Although the concept of a minimum wage is usually relegated to economic dis-cussions, it has important implications for social work. Most low-paid workers lack economic security during recessions or changes in the employment market. Many are not covered by unemployment insurance and are consequently the most likely candidates for public assistance. If the minimum wages of available employ-ment were adequate to support a family, it is likely that fewer people would be de-pendent on public assistance.
EARNED INCOME TAX CREDIT
Recent public policy efforts to make employment worthwhile centered on the Earned Income Tax Credit (EITC) program, which was discussed in Chapter 8. En-
acted in 1975, the legislation allows for a decrease in taxes paid for low-income workers. The program is administered through the filing of a tax return and there-fore does not involve additional federal agencies or administrators. The provisions of the EITC are complicated and vary according to income level and size of house-hold. Generally, the lower the income, the higher the tax credit. In cases where the income is extremely low, families may qualify to receive a direct grant. As demon-strated in Chapter 8, the program can have a positive impact on the economic situ-ation for low-income families who participate in the labor force and file an income tax return.
The program has received support from both political parties. It is supported because it rewards people for working, and it is efficient because it is handled through the existing Internal Revenue Service (Hutchinson, Lav, & Greenstein, 1992). Critics charge, however, that although the EITC helps low-income indivi-duals, it also keeps wages low. Why should employers raise wages when the gov-ernment subsidizes poor workers to accept the low wages? In effect, the EITC uses tax dollars to supplement poorly paid workers instead of placing the responsibility on the employers themselves (McDermott, 1994). This brings us back to the ques-tion of who should be responsible for determining wages: the government or the marketplace? Should wage levels be left entirely to the ebb and flow of economic conditions, or should the federal government intervene? If the government inter-venes, what should that action be? Should employers be regulated, or should work-ers be supplemented? Those questions continually surface in the ongoing debates regarding economic policy and social well-being.
IMPACT OF THE FEDERAL BUDGET ON SOCIAL WELFARE POLICY
How do the workings of the federal budget affect social workers and their prac-tice? The federal budget may seem far removed from the day-to-day activities of social service providers. As demonstrated throughout this book, the impact of gov-ernment policies flows through all levels of our social welfare system and ultimately affects our direct practice. The federal budget is the main source of revenue for na-tional social welfare programs and services. Federal money is used to fund services for children, families, health care, unemployment, retirement, education, national security, and other areas of social welfare. Budget cuts necessitate reductions in social welfare programs and services.