8.9 million Californians find it difficult to afford housing, food, and some of the basic necessities needed to survive. Over the last 40 years, productivity has increased by approximately 74%, yet wages for most low- and moderate-income people have not kept pace, with median hourly compensation rising only 9% over that period, according to a report by Economic Policy Institute featured in The Atlantic Monthly.
Children bear the brunt of this, sadly. California leads the nation in residents living in poverty, and our poverty rate for children, 27%, is worst in the country, according to a recent report from the Annie E. Casey Foundation.
The EITC is one bright spot, however; from 2010 to 2012, the federal EITC pulled 1.3 million people, including 629,000 children, above the federal poverty line in California. To make work even more effective at reducing poverty for low-income families, California’s United Ways, working through our United Ways of California state network, are sponsoring Assembly Bill 43 (Stone), which would create a state refundable Earned Income Tax Credit (EITC) program, as twenty-five other states have done.
A California EITC would encourage work, provide some much needed relief for working families by helping them secure an apartment or repair a car, and spur demand for goods and services by increasing purchasing power for tax filers in local economies that need it most.
Momentum is building. In recent weeks, United Way CEOs Elise Buik (Greater Los Angeles), Carole Lee Hutton (Silicon Valley) and Anne Wilson (Bay Area) have published op-eds on the importance of a refundable state EITC:
- Carole Leigh Hutton in San Jose Mercury News
- Elise Buik and Assemblymember Patty Lopez in La Opinión
- Anne Wilson and Assemblymember Tony Thurmond in Contra Costa Times
United Ways of California is co-sponsoring an educational briefing on the role of an EITC in an integrated asset-building strategy, with Bay Area Asset Funders Network, Northern California Grantmakers and CalNonprofits, June 4 at the East Bay Community Foundation.