A Simple Fix to Reduce Poverty and Encourage Work | Sojourners

A Simple Fix to Reduce Poverty and Encourage Work

Photo courtesy Africa Studio/Shutterstock.com.
Man holding coins, close-up of his hands. Photo courtesy Africa Studio/Shutterstock.com.

Jesus calls us to help the poor. That is a point that few would debate. One key indicator of our obedience is how we treat the poor and vulnerable among us. Where we fall in to debate is how to do it the most effectively.

One thing that gets lost in the rhetoric is that many of the solutions we have are already effective — they just need to be improved. And we have plenty of ideas that already help lift families out of poverty while encouraging them to work. Sounds perfect, right?

The Earned Income Tax Credit (EITC) is one such program. It provides a tax credit based on how much income a worker takes in — the more income they take in, the more benefit they get, up to a maximum point when it starts to phase out. This gives working people incentive to keep working rather than rely on assistance alone.

After all, a family with two minimum-wage workers simply cannot earn enough money to live above the poverty line. You may well get discouraged in their situation too, right? The EITC, combined with the Supplemental Nutrition Assistance Program (SNAP), is enough to lift these families above the poverty line.

Studies have shown that the EITC has encouraged single parents to enter the workforce while lifting millions out of poverty. The money is spent on activities that fuel positive economic growth, like getting an education or buying groceries.

That sounds like a pretty Biblical approach to helping the poor. It’s one of the reasons that Christian groups across the political spectrum pushed so hard to protect the EITC from cuts during the fiscal cliff debate and other budget discussions. There’s no reason to take a sledgehammer to programs that are working well and benefiting us all.

So where's the problem?

The problem is that it currently only works well for families. The EITC program gives about one-tenth as much support to single, childless workers — far less than the amount they pay in taxes. These workers are actually getting pushed further in to poverty because their EITC credit is too low.

What’s worse, young men and women are not eligible for the EITC program until age 25, contributing to low workforce participation among low-income young adults. Experts say that if these two problems were fixed, society at large would benefit. For example, if young men were suddenly able to work enough hours to support a family, they might be more likely to get married.

All around, a stronger Earned Income Tax Credit would be good for the economy, good for society, and good for the people who work hard to receive it. Thankfully, there are bills in Congress right now that would help young workers and single workers benefit from the program (S. 836 and H.R. 2116). It would be enough to lift over 300,000 childless workers above the poverty line, and bring 3.8 million of them much closer.

These changes would do much to help our nation answer Jesus’ call to care for the poor.

Photo courtesy Africa Studio/Shutterstock.com

Janelle Tupper is Campaigns Assistant for Sojourners.