The Great Recession officially ended several years ago and the overall economic recovery in our state has been robust, but too many California families continue to struggle each month. Communities hardest hit by the recession – including cities up and down the Central Valley – remain impoverished.
This uneven economic growth has left so many families behind. Nearly 1 in 4 Californians – more than 8 million – lived in poverty in 2013. This shameful rate, the highest among all states, includes 2 million children. Children who grow up in poverty tend to complete less education, experience more physical and mental health issues, have poorer nutrition and have fewer job prospects. Many kids who grow up poor stay poor as adults. Clearly, it benefits all Californians to address our state’s appalling poverty rate.
To keep children from growing up in poverty, families need opportunities and incentives. Creating more jobs isn’t the whole solution; more than two-thirds of poor California households have family members working in low-wage jobs. The state can and should do more to help working families.
That’s why we have authored two proposals being considered in the Legislature – a refundable state tax credit and a minimum wage increase.
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Assembly Bill 43 would establish a refundable California earned income tax credit that would mirror and supplement the federal refundable tax credit for low- to middle-income working households, which has a proven track record of lifting families out of poverty. In 2013, more than 10 million Californians received $7.3 billion in federal credits.
A state earned income tax credit would have an immediate, measurable effect. More than 178,000 Californians would be lifted out of poverty, including 82,000 children, and more than 3.1 million would begin to move out of deep poverty, including 1 million children. Additionally, communities with large populations of low- and moderate-income workers would see noticeable economic benefits as recipients spend their credits where they live.
This proposal would be strengthened by Assembly Bill 1007, which seeks to raise the minimum wage above the supplemental poverty level for a family of three. Despite the great strides that our state’s economy has made recently, wages have remained virtually stagnant. Studies have shown that an increase in the minimum wage is necessary for working families to share in the benefits of a robust economy.
California needs to take bold steps to reduce the poverty rate and improve the economic outlook in its impoverished communities. It’s time to join 25 states that have an earned income tax credit and to lead the way with a livable minimum wage. Let’s take this opportunity to lift more hardworking families out of poverty and help ensure that the next generation of Californians isn’t suffering the consequences of childhood poverty.
Assemblyman Mark Stone, D-Scotts Valley, represents the 29th Assembly District. Assemblyman Kevin McCarty, D-Sacramento, represents the 7th Assembly District.