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California can lead on economic security for working families

The sun sets behind an apartment building occupied by farm workers in Huron in September. There are parts of California where poverty is deep.
The sun sets behind an apartment building occupied by farm workers in Huron in September. There are parts of California where poverty is deep. AP

Americans are feeling financial strain from the rising cost of living and stagnant wages. Even with strong job growth and the lowest unemployment rate in almost a half-century, nearly 40 percent of adults say they had trouble meeting basic needs last year.

This financial pressure cooker is even more heated in California, where the costs of housing, food, child care and transportation almost always outpace the national average. In fact, more than half of Californians are worried that they or a family member will be unable to find affordable housing. It’s no wonder so many Californians say the rising cost of living is the most important issue facing the state.

 

Opinion

Millions of jobs in our state do not pay enough to contend with life’s curveballs, but pay too much to qualify for various types of public assistance. The problem is clear: Working and middle-class people need a break.

One effective way to do that is through the Working Families Tax Credit, a proposal to provide a monthly cash payment to help ensure that no one who works full-time lives in poverty, and that the middle class isn’t living paycheck to paycheck. The policy is based on the federal Earned Income Tax Credit, one of the most effective anti-poverty tools.

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Natalie Foster

California has its own refundable state tax credit that helps low-wage working families. This could be expanded to provide as much as $2,000 a year and to push further into the middle class to cover half the state’s population, including more than 5 million children. The California Budget & Policy Center projects that this would significantly reduce the state’s poverty rate, the nation’s highest.

It is notable to see a California leader raising this issue at the federal level. Sen. Kamala Harris introduced the LIFT the Middle Class Act, which would provide households making less than $100,000 with a cash payment of as much as $500 a month. Her bill joins one introduced by Rep. Bonnie Watson Coleman of New Jersey to expand EITC benefits to Americans going to college or caring for a child or senior in their family, recognizing the massive amount of unpaid care-giving labor, primarily by women.

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Chris Hoene

Both bills will help people stretch their paychecks until the end of the month, or even save for tomorrow. And they could be paid for through new policies that reflect the fact that recent economic gains, as well as the benefits of last year’s federal tax cuts, are overwhelmingly going to the wealthiest Americans.

When our country’s racial wealth gap continues to grow, a critical benefit of these proposals is their greater impact on families of color, who are more likely to face economic insecurity.

While the details of these proposals differ, they share a common theme: It’s time for lawmakers to enact meaningful tax reform that puts more money in the pockets of working and middle-class families.

Natalie Foster is co-chair of the Economic Security Project and can be contacted at natalie@economicsecurityproject.org. Chris Hoene is executive director of the California Budget & Policy Center and can be contacted at choene@calbudgetcenter.org.

 

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