The Real Minimum Wage

Apropos Brian's recent post, it's worth noting that the federal minimum wage, for those living below the poverty line, is not really $5.15 per hour. A family (single or married-couple) with one child and one income earner working full time at minimum wage qualifies for an Earned Income Credit of $2662 (see page 53 of this PDF. If there are two or more children, the credit increases to $4110, making the effective minimum wage for full-time workers with children $6.48 to $7.21. The only federal taxes paid on this income are FICA taxes, which amount to $0.39 per hour.

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