May 2004, Vol. 127, No. 5
Rule of law
Book reviews from past issues
Making Work Pay: The Earned Income Tax Credit and Its Impact on America’s Families. By Bruce D. Meyer and Douglas Holtz-Eakin, eds. New York, Russell Sage Foundation, 2001, 400 pp., $49.95 /hardback.
The largest U.S antipoverty program for the non-aged, the Earned Income Tax Credit (EITC), is an important policy tool for encouraging the poor and particularly single mothers to take employment. Making Work Pay is a collection of essays by economists, public policy experts, lawyers, and an anthropologist. The different contributors focus on varying problems of the EITC including its effects and implementation. While the EITC does not do much to directly get people out of poverty, it does help them acquire work experience and get off of welfare. The lump-sum payments serve as a forced savings plan that often helps poor families acquire capital that will change their station. All of the essays relate to the U.S. EITC only; none cover similar programs in other countries.
Meyer and Holtz-Eakin are well qualified to edit such a book. Meyer is a professor of economics at Northwestern University. He has authored or co-authored related articles and papers in journals such as Econometrica and the Quarterly Journal of Economics. Holtz-Eakin has published in journals too numerous to mention. He is also the author of several books. Holtz-Eakin is currently at the Congressional Budget Office (since February 2003). The contributions provide informative, clear, and relevant discussions of their topic. Each contributor follows his or her work with clear tables and charts so that the data are easily accessible. There is also a comprehensive index at the end of the book.
The book begins with an exceptionally well written political history of the EITC by Dennis Ventry. This article provides us with an understanding of the process that led to the EITC’s current incarnation. We see the changing views of both the Democrats and the Republicans as well as the changing views of the government economists charged with quantifying the effects of the tax credit. Even though economic analysis has helped de-politicize the debates, politics—not economics—will continue to be the force that affects the EITC.
Work and marriage incentives are the focus of the essays in the second section of the book. One essay focuses on the difficulty of measuring the marriage penalty in the tax code and then tries to estimate the EITC’s marriage penalty under different assumptions. Another article shows empirically that the EITC does increase employment among single mothers. The second article uses a variety of techniques to see if the EITC affects marriage decisions—finding that it neither increases nor decreases marriage rates among poor mothers very much.
The essays in the third section of the book focus on the compliance problems associated with the EITC. Janet McCubbin focuses on the misreporting of children, looking at possible confusion by the tax filers because of joint custody. The article finds, however, that reducing EITC payments by 10 percent would reduce overclaims attributable to non-qualifying children by 14 percent. The other essay in this section is by Jeffrey Liebman who looks at who gets the EITC in error and finds that those families are remarkably similar to those families that should actually earn the EITC by law.
Part four focuses on the way that recipients use the money from the tax credit. Because EITC checks come as a lump-sum payment in the spring, it has a different effect than other aid to poor families. Many families use the EITC as a form of forced savings that helps them buy durable goods like cars. Another essay finds that while low income families know about the EITC and often know that it is possible to get the EITC earlier by reducing weekly tax rates, they choose not to. Low income families prefer the forced savings that the EITC gives them.
Overall, the book is a worthwhile collection of essays. It includes most of the main topics that a researcher would want covered. It is missing a few topics, for instance a review of State programs. There are several unmentioned proposals to broaden the EITC, such as a special program for the disabled. A short essay discussing back-to-work tax programs in an international context would also be useful. I would have also liked a discussion of EITC’s effect on the decision to have and the timing of children. Otherwise the book is excellent.
Washington and Lee University
Rule of law
A Strike Like No Other Strike: Law & Resistance during the Pittston Coal Strike of 1989–1990. By Richard Brisbin, Jr. Baltimore, MD, The Johns Hopkins University Press, 2002, 350 pp., $44.95/hardback.
The history of coal mining is written in books, songs, and oral histories. A Strike Like No Other Strike focuses on the 1989–1990 Pittston Coal Strike, but it isn’t meant to simply add another chapter to a normative history of coal mining in America. Instead, Richard Brisbin, Jr. looks at how American faith in the "rule of law" affected the players in this battle.
Historically, as unions evolved, they saw the law as a counterweight to mitigate managements’ control of the work environment. The National Industrial Recovery Act (NIRA), the Bituminous Coal Code, National Labor Relations Board, the Wagner Act, and other Federal actions created a framework for union activity that offered legal remedies to address workers’ grievances. Brisbin writes that these activities resulted in a set of institutions and laws that constituted a legal complex that can be seen in the 1950 accord between the United Mine Workers of America (UMWA) and the Bituminous Coal Operators Association (BCOA). The situation changed in the 1970s as the economics of coal became less favorable for BOCA members and the Reagan administration signaled a change in labor policy, resulting in BCOA seeking changes to the 1950 accord. Brisbin’s contention is that the resulting 1984 A.T. Massey strike set the stage for actions occurring in the later Pittston strike.
Comprising the balance of the book, the Pittston strike can be seen as a series of dramas on both sides. Leaders of the UMWA used words and images to define their objectives within the confines of existing law. On the other side, Pittston understood very well the legal remedies open to them and chose to exploit those legalities. As strikers increasingly turned to extralegal means out of frustration with the duration of the strike, Pittston turned to the courts for relief in the use of injunctions and large fines against the union. The two sides grew farther apart from each other, both in their rhetoric and their view of the world.
Despite instances of violence during the strike, ultimately the UMWA and Pittston settled their dispute with a contract, essentially returning to a legal means to end the conflict. Unfortunately, the conflict was not only costly, but also brought few lasting benefits to the miners, many of whom later lost their jobs as work shifted to nonunion mines both in the East and in the West. In the end, neither staying within the law nor breaking its boundaries could bring the justice and fairness sought by strikers for themselves and their families. Legalisms shaped the conflict, but faith in the rule of law proved no match to political power and economic forces.
A Strike Like No Other Strike gives fascinating insights for those involved in directing collective bargaining activities, both as managers and union activists. It is written using theoretical concepts more at home in academia than on the picket line, although one can occasionally hear the voice of the actual strikers who question the legalistic philosophy espoused by their leaders. With its emphasis on situational analysis, professors, labor lawyers, managers, and union activists will find this book more compelling than rank-and-file workers.
Bureau of Labor Statistics,
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