Making Work Pay for Men
Today, the Progressive Policy Institute released “Making Work Pay: for Men Too,” a report which examines the stalled momentum in poverty reduction during the Bush administration. Despite talk of “compassionate conservatism,” President Bush has done little to build on his predecessor’s most important social legacy - to “end welfare as we know it” and make work the organizing principle of anti-poverty policies.
In order to pick up where President Clinton and other progressive reformers of the 1990s left off, we must now focus on the plight of poor men and draw them back into the labor market.
In an op-ed in today’s Baltimore Sun, Will Marshall and I note that when it comes to work, low-income men and women are headed in the opposite directions. While the number of women in the work force has surged do the welfare reforms of 1990s, only about half of all poor men work, and just 16 percent work full time. A mere six percent of poor black men work full-time.
The absence of responsible, breadwinning fathers in low-income neighborhoods is a social calamity. It undermines marriage, deprives children of positive male role models, and leaves single moms strapped for cash.
That’s why getting more men into full-time work is critical to tackling both the economic and cultural dimensions of poverty in America. But if we are serious about putting work first, we can’t ignore the reality that many entry-level jobs pay too little to provide what most Americans would consider a minimally decent standard of living.
The single most effective policy tool for making work pay is the Earned Income Tax Credit (EITC), a refundable tax credit that supplements the wages of low-income workers. Since Clinton expanded the EITC, this credit has made work pay for the more than four million families who have lifted themselves out of poverty.
However, in its current state the EITC does little to help low-income men because they typically aren’t raising children. For example, a single working mom with two or more children can get up to $4,536 annually in EITC rebates, while childless adults get a paltry $412. The point is not to close the gap - after all, it costs money to raise kids so parents should get more - but to beef up the EITC’s work bonus to make entry-level jobs more attractive to men. That’s crucial, because when absent dads aren’t working, they probably aren’t making their child support payments either.
Additionally, the EITC unwittingly penalizes marriage. When a working mom marries a man who also has some income, their combined earnings may push them beyond the qualifying range for EITC benefits. Since research shows that marriage is second only to full-time work in enabling people to escape poverty, mitigating this marriage penalty is essential.
There is no shortage of proposals to expand the EITC. However, we offer one with a novel twist: a combined EITC expansion and tax simplification. First, we should boost EITC benefits for non-custodial dads, so long as they work full-time and meet their child support obligations.
Second, we should simplify the maze of tax credits for which low-income families are eligible. Building on a previous PPI idea, we would fold the EITC, the Child Credit, and the Child and Dependent Care Credit into a single program which we’ll call the “Family Tax Credit.” Qualifying families would receive one dollar in a refundable credit for every two dollars earned, with a maximum credit of $3,500 for a family with one child, $5,200 for two children, and $7,000 for three children.
The Family Tax Credit also would provide four million non-custodial fathers and childless workers a work bonus of $1,236 - nearly three times what they currently receive in EITC benefits. And it would soften the marriage penalty by raising the qualifying income thresholds for two-earner couples.
By marrying tax reform and new work incentives for men, policy makers today can build on President Clinton’s most enduring social legacies - reducing welfare dependence and making work pay.