Barriers Quote by Paul Krugman
“Raising the minimum wage and lowering the barriers to union organization would carry a trade-off - higher unemployment. A better idea is to have the government subsidize low-wage employment. The earned-income tax credit for low-income workers - which has been the object of proposed cuts by both President Clinton and congressional Republicans - has been a positive step in this direction.”
About This Quote
Source Speech: Economic Commentary, 2000s
Increasing minimum wage and easing union rules may raise unemployment; subsidizing low‑wage jobs via earned‑income tax credits is a more targeted solution.
In simple terms: Higher wages can cause job loss; subsidies help low‑income workers.
Key Takeaway
Use targeted subsidies instead of broad wage hikes.
Themes
economics
labor policy
public finance
Mood
analytical
concerned
Type
policy
economics
When to use this quote
- policy debate
- legislative proposals
- business hiring decisions
- low‑income household budgeting
Key Concepts
minimum wage
unionization
earned income tax credit
subsidies
Questions to Reflect On
- How can subsidies be funded sustainably?
- What are alternative ways to support low‑wage workers?
A Different Perspective
Subsidies may be politically fragile and costly to fund.
