On January 7 Spotlight on Poverty & Opportunity published an interview with David Riemer, Senior Fellow at Community Advocates Public Policy Institute, on how a work-based policy package can dramatically reduce U.S. poverty. An August 2024 analysis by the Urban Institute found that the a seven-part policy package would greatly increase employment, earnings, and income, thus providing workers’ and retirees’ much improved economic security and vastly expanding America's middle class.
In the interview, Riemer highlights three core ideas that can be implemented as federal policies and programs. The first is to make work available, via Transitional Jobs, to adults who are unemployed or underemployed and want work. In addition to providing steady wages and useful work, one of the program's goals is to help adults move into the regular economy.
The second idea, encompassing the second, third, fourth, and fifth policies, involves making work pay. The Urban Institute report modeled a minimum wage increase of about $17.50 in today’s dollars. The policies to make work pay include improving the structure and increasing the amount of the Earned Income Tax Credit, bringing back the Child Tax Credit that existed in 2021, and providing the parents of young children with free child care.
The third idea, and final two policies, would raise both the Supplemental Security Income (SSI) benefit and the Social Security minimum benefit well above the poverty line.
The report found that the package would have dramatically cut the poverty rate in 2018 from 11.4% to 3.1%, a 73% reduction. “That’s 27 million fewer poor people—and if you look at the policy package’s impact on the American population as a whole, it would increase the number above 200% of poverty by 51 million people,” Riemer says.
The policy package would also increase the number of people who were employed by almost 7 million people, meaning significant gains in revenue as the people who secure employment would pay taxes.
Riemer says there is a lot of interest in the individual policies, with many states already raising their own minimum wage, supplemental Earned Income Tax Credits and Child Tax Credits, and child care programs. But Riemer emphasized that the policies that form the policy package are most effective when enacted as a whole. “Each one of these policies standing alone does a little bit to reduce poverty but it’s only when you get them together, when they interact with each other, that they produce these dramatic results,” he said.
When asked what comes next for these ideas, Riemer says he hopes to spread the word in Washington, D.C.
Read the full interview with Spotlight on Poverty & Opportunity and David Riemer at https://spotlightonpoverty.org/spotlight-exclusives/how-a-work-based-policy-package-can-reduce-u-s-poverty/
