California offers low-income workers a hand, not a hand-out

Since the 1970s, America’s debate about ending poverty has been polarized by the trope of “welfare queens,” women who have numerous kids in order to receive increased benefits and live a life of luxury. 

The image has had an enduring and damaging impact, not only on America’s working poor, but on how we make public policy to end poverty. 

The truth is that as of 2018, 41 million Americans live in poverty. What does this mean? 

In a high-cost state like California, it means a family of four living off of $2,700 or less each month. That’s barely more than the $2,350 median rent for a one-bedroom apartment in Los Angeles.

The reality of today is that workers on welfare aren’t driving luxury cars. To be clear, they never were. The truth now is that too many are living in their cars and struggling just to get by. 

The more accurate image of the working poor who are eligible for public benefits in today’s America is that of Lauren Kush, an Uber driver who recently told CNN she was living in her Toyota Prius. 

Lauren is among the more than 16,000 Los Angeles residents living in their cars—and typical in that she is working hard to pay for life’s basic necessities.

Sadly, it’s true that too many mothers are living in poverty. 

Among the Americans most likely to be poor are single mothers, for whom the poverty rate is almost three times the national average. And they are working harder than ever and making, in real wages, less than ever. In California, wages for the lowest paid workers have actually gone down over the last decade. 

The folks living in poverty today are 41% white, 30% brown, 21% black, and 7% Asian. They are all of us—who, but for the grace of God, haven’t had that $400 expense or medical issue that renders us destitute and possibly homeless.

As a society, we have been making policy around poverty alleviation based on myths and exceptions, not reality. 

Close to half of all people living in poverty are working or looking for work. Because wages at the bottom of the earnings distribution are so low, it takes 50 weeks of work for a family of three just to reach the poverty level. 

They don’t want a hand out. They need a hand up.

One of the most successful anti-poverty programs in the country is the earned income tax credit. Working Americans with Social Security numbers who make less than $56,000 can receive a tax credit worth hundreds, if not thousands, of dollars. 

In California, we established a state earned income tax credit in 2015, and Gov. Gavin Newsom has expanded the program to $1 billion this tax year, including up to an additional $1,000 young child tax credit for parents with a child under age 6. 

The power of the earned income tax credit is undeniable. 

Research shows it is a potent tool for combating generational poverty, with children whose parents receive an earned income tax credit boost having better health, performing better in school, being more likely to attend college, and going on to have higher earnings as adults. 

Studies have also found that earned income tax credit dollars are often spent locally, stimulating underserved economies, with local economic impacts equivalent to at least twice the amount of the dollars received.

While we sort through how we can make better public policy, let’s make sure we amplify what has proven to be effective. 

This tax season, please encourage anyone you know—your barista, your trainer at the gym, anyone in your network who may be struggling financially—to go to CalEITC4Me.org to find out if they are eligible, how much they could claim, and where to find free tax preparation services to help them file. 

And remember, the face of poverty may not be what you think it is. It may look a lot more like you than you think. It may even be you. Let’s help everyone claim their credit. And then let’s get to work to #EndPoverty. 

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Amy Everitt is president of Golden State Opportunity, a nonprofit dedicated to ending poverty, amy@goldenstateopportunity.org. She wrote this commentary for CalMatters.