An effective plan to lift up struggling working families

Father giving his daughter a piggy back ride.

An effective plan to lift up struggling working families

Father giving his daughter a piggy back ride.
Without a doubt, our country can vastly improve the economic prospects of families scraping by on low wages.

An effective plan to lift up struggling working families

[This commentary first appeared in The Oregonian.]

Without a doubt, our country can vastly improve the economic prospects of families scraping by on low wages. We can protect more Americans, kids especially, from the life-long consequences of lacking basic necessities. What we need is action by Congress.

For decades, evidence has piled up about the effectiveness of a pro-work strategy that increases household economic security: tax credits that put more money in the pockets of low-wage working families.

Recently, Oregon Senator Ron Wyden introduced with three other senators a proposal that upgrades our nation’s tax credits for working families. Sen. Jeff Merkley is cosponsoring this legislation, which promises to lift up more than half-a-million Oregon families. For the well-being of our state and nation, every member of Oregon’s congressional delegation should sign on and fight for the Working Families Tax Relief Act.

Low-wage work is all too common these days. More than one in three jobs in Oregon pays less than $15 an hour.

Oregonians working for low pay struggle just to stay afloat — even more so to move ahead — as they contend with the rising cost of housing and other essentials. The challenge of providing for a family on low wages is particularly acute in Oregon’s communities of color and rural communities.

That so many households struggle despite their work effort holds Oregon back. It’s time to ensure that working people can improve their circumstances and give all children a real chance to fulfill their aspirations.

The Working Families Tax Relief Act strengthens the federal Earned Income Tax Credit, a successful tax credit that has long enjoyed bipartisan support. The Act boosts the tax credit for families with children by about 25 percent. It also increases the tax credit for workers without dependent children and lowers the eligibility age to 19 so that younger workers can better make ends meet.

That’s not all. The act also improves the Child Tax Credit, making it fully available to low- and moderate-income families and increasing for families with young children. These improvements would help millions more children across the country get a good start in life.

In Oregon, the improvements in the two tax credits would make nearly 600,000 families more financially secure. More than one million Oregonians would benefit, including 570,000 children. The benefits would spread across racial groups and reach every corner of our state. The proposal would help struggling families afford basic necessities, keep stable employment, enrich their children’s lives, and seek training to get a higher-paying job.

What would the Working Families Tax Relief Act mean in practical terms? It would, for example, put an extra $3,700 in the hands of a single mother raising a toddler and a school-age child on earnings of $20,000 a year. This family would get the benefit even if — as is likely the case — its federal income tax bill is smaller, given that the tax credits are refundable. Such an income boost improves the odds of a child having better health, graduating from school, and earning good wages as an adult.

There may be an opportunity to enact some pieces of the Working Families Tax Relief Act as part of federal legislation this year to extend temporary tax breaks for businesses. In his role on the House Ways and Means Committee, Oregon Rep. Earl Blumenauer has shown support for improving tax credits for working families as part of this legislation.

If implemented, the Working Families Tax Relief Act will improve the lives of working families struggling economically, providing lasting benefits for their children. That is something that every member of Oregon’s congressional delegation should sign up for.

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Janet Bauer

Janet Bauer is the Director of Policy Research at the Oregon Center for Public Policy

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