A new study using Wisconsin data found that the $2 billion Work Opportunity Tax Credit — which rewards employers for hiring people from disadvantaged groups — does not increase hiring or earnings among eligible workers, with researchers estimating that 97% of subsidized hires would have occurred anyway. Despite this evidence, a bipartisan group of lawmakers is seeking to expand the credit, which expired in December, with industry groups backing its reauthorization.

Sarah Hamersma, associate professor of public administration and international affairs, studied the Work Opportunity Tax Credit as a graduate student more than 20 years ago and found the same result as was found in the new study—that the credit appeared to benefit employers rather than low-income workers, unlike the Earned Income Tax Credit.

“They’re not passing it along to the workers in the form of higher wages. They’re just sort of being like, ‘Awesome, I got more money,’” says Hamersma, also an O'Hanley Faculty Scholar.

Hamersma hopes legislators read the new study, and that it might sway them. 

“They’ve checked every angle you could possibly check, and the program is not working,” Hamersma says, calling it an “ironclad case.”

Read more in the Wisconsin Watch article, “Tax credit meant to help struggling workers mostly helps employers, Wisconsin study finds.”