The Working Families Tax Relief Act would boost the incomes of 46 million American households, many of whom are in the service industry or work low-wage healthcare jobs. This bill would expand the Earned Income Tax Credit (EITC) as well as the Child Tax Credit (CTC), strengthen the EITC for childless workers, and make the CTC fully refundable. A blog by Chuck Marr of the Center on Budget and Policy Priorities breaks down the impact:
To see the difference that the Working Families Tax Relief Act could make for millions of hardworking people, consider a mother of two children, a 4-year-old and a 7-year-old, who makes $20,000 as a home health aide. The bill would raise her Child Tax Credit by $2,210 and her EITC by about $1,460, for a combined gain of about $3,670. Or consider a fast-food cook who works full time at the federal minimum wage and earns $14,500, only slightly above the poverty line. He now pays more than $1,250 in combined federal income and payroll taxes, which push him below the poverty line. The bill would increase his EITC by about $1,530, so he’d no longer be taxed into poverty.
The bill would particularly benefit workers of color.
White households constitute the greatest number of those benefiting because they’re the largest share of the population, but the bill would help a greater share of Black, Latino, and other households of color because they are over-represented in low-wage jobs due to long-standing racial barriers to economic opportunity.
Is the economy working for workers this Labor Day?
While the national unemployment rate is low, this measure by itself doesn’t tell us nearly enough about how workers are truly faring in today’s economy. For this reason, the Economic Policy Institute has released a series of essays, timed for Labor Day weekend, that look deeper into the labor market and explain the barriers that many workers still face:
In essence, they examine the many ways economic policy has conspired to let so much of the nation’s productivity escape the paychecks of typical workers—a trend highlighted in a well-known EPI chart (shown here) comparing growth in economy wide productivity and hourly pay for typical workers. Productivity and pay marched upward in lockstep for decades following World War II yet have diverged markedly since the late 1970s.
Wage penalties for women hurt families
Middle class households increasingly depend on women’s wages to stay afloat. In fact, 40% of middle-class families rely on a woman to be the breadwinner today, as opposed to 26% in 1975. And because women’s wages are more significant to the average household than they were four decades ago, “motherhood wage penalty,” the hit many women take in future wage growth after having children, plays an even more substantial role in holding back middle-class families. Brookings’ Richard V. Reeves and Ashley Schobert explain:
Far from being “pin money,” the earnings of women, including mothers, are keeping middle class families economically afloat. Because the drop in a woman’s earnings following the birth of a child is so severe, household income drops by six to eight percent, a hit that persists for years. Over the last few decades, the wages of men with less than a college education have not been growing, while the wages of women have risen across the board, though much more so at the top. What this means is that the motherhood wage penalty has become a family wage penalty.
Paying attention to race in hunger policy
Government programs that address hunger, such as the Supplemental Nutrition Assistance Program (SNAP), have typically taken a blanket approach to the problem without explicitly considering the needs of communities of color. A new report by Marlysa D. Gamblin and her team at Bread for the World Institute shows what a race equity lens would look like when applied to three federal anti-hunger initiatives: SNAP, the Special Nutrition Program for Women, Infants, and Children, and the Child Nutrition Programs:
The methodology for applying a racial equity lens was founded on the goal of centering the needs of communities of color. Given the current racial nutrition divides that exist, this process was divided into two thought processes. The first part of the thinking was on closing the current racial nutrition divide, whereby the programs would need to achieve equal outcomes for recipients of color relative to their white counterparts. The second part of the thinking was on ensuring that communities of color benefited from reaching optimal nutrition. As explained in the Foreword, policies that are centered on those who have been traditionally left behind will automatically benefit all who receive those policies, including white recipients. Both stages of thinking are integral to achieving comprehensive equity for all communities.
Number of the Day
20,000 – The number of AT&T workers in the South currently on strike. Communications Workers of America, the union representing the striking workers, argues that AT&T has failed to send people with decisionmaking authority to participate in contract negotiations. (Source: The AP)whereby the programs would need to achieve equal outcomes for recipients of color relative to their white counterparts. The second part of the thinking was on ensuring that communities of color benefited from reaching optimal nutrition. As explained in the Foreword, policies that are centered on those who have been traditionally left behind will automatically benefit all who receive those policies, including white recipients. Both stages of thinking are integral to achieving comprehensive equity for all communities.