McKellogg Poverty Q2

Published by Paola Avendano on

Given the role of employment in poverty alleviation, state government can incentivize employment by lessening the impact of the benefits cliff. After families’ employment income increases, state government can adopt a revenue neutral approach through earned income disregards or expanding the Earned Income Tax Credit (EITC). EITC is one of the most effective anti-poverty poverty programs at the federal level and has a parallel state structure in California. Efforts over the last three years to expand California’s EITC have been successful by 1) increasing the income limit to account for the rising state minimum wage; 2) increasing the income limit to $30,000 and; 3) increasing the size of the credit for tax filers with annual earnings at the higher end of the income limit.

The State of California can significantly improve efforts to increase economic mobility and inclusion for families and reduce poverty through the Local Empowerment Fund, a $100 million request to scale results-focused social interventions that lead to greater economic inclusion, security, and mobility of individuals who do not have stable employment or earn a living wage. Through the Local Empowerment Fund (of which REDF is a supporter), the State can use its resources more effectively to accelerate the pace of change and begin to combat economic inequality.

State Governors can also dedicate discretionary Workforce Innovation and Opportunity Act (WIOA) funding annually to employers focused on people at the poverty line, including employment social enterprises which have an innovative service delivery model and contribute to WIOA performance goals.