New Study: Looking at the Best Ways to Move on Up

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Growing support for the idea of Universal Basic Income is challenged in a new report from the California Business Roundtable (CBRT) which argues that it is better to recognize workers value in society through programs like the Earned Income Tax Credit (EITC) rather than promote Universal Basic Income “which essentially discards lower-income residents as obsolete resources.”

That assertion was among a number of recommendations offered in the report titled “Jobs, Poverty and Upward Mobility.”

Concerned that current government programs are designed to merely make poverty more tolerable, the project (with help of a grant from the James Irvine Foundation) looked at opportunities for upward mobility for the working poor and those living in poverty so as to create a strong middle class.

Business Roundtable president Rob Lapsley stated in a release, “There is a widening divide between the very wealthy and the working poor in California. Without changes and reforms to facilitate upward mobility among the lower-income level, the state risks creating generational poverty for many Californians.”

The research behind the report lasted a year, included eight focus groups, and talked to those involved in the state’s assistance programs as well as employers and academics. Recommendations were made in the areas of  housing, affordability, education and workforce development. Pointedly, the release notes that the report’s recommendations can be accomplished without new revenues.

One item the report focused on is a measure that I have supported previously and highlight here: the Earned Income Tax Credit.

The Business Roundtable report argued that, “Universal basic income is giving up; the EITC is providing Californians with resources to fight back and secure their place in a changing economy.”

The complaint of workers who are making progress escaping poverty is that as they climb up the economic ladder support is pulled from them as they work to get ahead. An expanded EITC would provide the support.

Last January, I backed the notion put forth by Gov. Gavin Newsom of doing more with the Earned Income Tax Credit. I wrote at the time “Just as lower income tax rates are an incentive to work and produce, an “earned income” tax credit also encourages work even if an individual’s current circumstances are on the lower end of the economic ladder. There is a cost to the EITC but there is also value to the idea. Its purpose is to encourage work.”

The CBRT report also recognizes the value in the EITC credit. The report suggests strengthening the EITC credit by restructuring and expanding the program and calculate it as an add-on to the federal EITC.

The bottom line is that an Earned Income Tax Credit is a proven way to lift those working for a better life to make progress toward their goals and achieve middle class status.

It is also a program that emphasizes that work matters.

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