New Legislation Shines a Much-Needed Spotlight on the District’s Working Poor
DC’s elected leaders are showing signs that they understand the critical importance of helping DC residents find jobs and that DC government can also take steps to make work pay. Just last week Councilmember David Catania introduced two pieces of legislation that recognize that there is still plenty of work to be done in ensuring that the opportunity to earn a decent living is available in all parts of the city.
There is no doubt the need is great. While some District residents are doing quite well, many more in the District struggle to get by. As we noted last week, the District has one of the widest income gaps in the nation. DC’s current unemployment rate – over 11 percent – is higher than during the official recession in 2009 and the highest in 30 years. In some areas of the city, the unemployment rate is estimated at upwards of 30 percent, due to lack of adequate education and training as well as other barriers to the workforce. And among employed District residents, many struggle to make ends meet in one of the highest cost-of-living areas in the country.
The first bill, the Worker Assistance and Gainful Employment Support (WAGES) Act of 2011, expands eligibility for the District’s earned income tax credit (EITC). The EITC, a tax credit targeted on low-income workers, plays a critical role in reducing poverty among residents in low-wage jobs. Councilmember Catania’s bill would expand eligibility to all working residents aged 18 and older. Currently, working residents between the ages of 18 and 24 without children are not eligible for the EITC. The WAGES Act would also provide a tax credit to employers that provide training to certain DC residents, including those who qualify for the EITC, recently incarcerated residents, TANF recipients, and those who have been unemployed for more than 6 months.
The second bill, the District Workforce and Business Fairness Act of 2011, cosponsored by Councilmember Mary Cheh, gives preference in the District’s procurement process to businesses that maintain a workforce that is composed of at least 50% District residents. Currently, a business located in DC can be certified as a Local Business Enterprise simply by being based in the District, regardless of how many District residents they actually employ.
These pieces of legislation, like all legislation, deserve scrutiny. For example, previous efforts to provide tax credits to employers who hire low-income residents have had mixed success, and the EITC changes should be examined to assess whether they would add a lot of complexity to the current credit. But the bills deserve credit for raising new ideas and offering tangible ways to help unemployed DC residents get back to work and afford to live in the city where they work.