Texas’ working poor need help in coronavirus recession. Here’s what Congress can do
At the United Way of Tarrant County, we work to advocate on behalf of all Texans, especially vulnerable individuals and families who struggle to make ends meet. We call some of these hard-working Texans ALICE — Asset Limited, Income Constrained, Employed — because although their income is above the federal poverty line, their low-wage jobs make it nearly impossible to cover basic necessities such as food, transportation, utilities and rent.
The coronavirus pandemic threatens to send many ALICE families into poverty. We need lawmakers to support policies that will boost the economy, avert poverty and reward hard-working Texans.
Before the virus arrived, ALICE households were already struggling in our community. From 2010 to 2018, the number of Tarrant County ALICE households unable to afford to live and work in the modern economy increased from about 160,000 to almost 185,000. Statewide, this was accompanied by increases in the cost of living and stagnant wages.
The overall number of ALICE households is sure to increase due to the pandemic’s damage to our economy, which has led to unemployment, income instability and overall uncertainty about our economic future. ALICE families without savings and working essential jobs are more likely to fall into debt and may not be able to protect themselves or afford treatment if they get sick.
Now more than ever, we need lawmakers to intervene and address the widespread effect on our economy and our most vulnerable neighbors.
Although the road to a COVID-19 recovery will be long, there are strategies lawmakers can implement. One strategy is to connect hard-working Texans with the federal Earned Income Tax Credit and Child Tax Credit.
The earned-income credit encourages work, boosts incomes, and reduces poverty among families with children. In 2019, 2.6 million Texas families used this tax credit, bringing $7.1 billion into the state’s economy. Expanding the credit for childless adult workers would supplement the limited earnings of struggling workers doing essential jobs, including food preparation, in-home health services, childcare, and handling, packaging and transporting goods.
In Texas, it is estimated that more than 1.2 million workers would benefit from an earned-income expansion. Since childless adult workers are largely excluded from the credit, they are the only group in our country that is taxed into poverty. That makes it even harder for workers to pay their bills today and build the financial stability they need to succeed in the future.
Policymakers could consider making a one-time change in the design of both tax credits to make them more effective during the current downturn, especially given that essential workers like home health aides, cashiers and those in food preparation and serving occupations would benefit the most. As COVID-19 continues destabilizing the economy and more Texans become eligible for the EITC, this tax credit will help hard-working individuals and families stabilize their income.
Additionally, in preparation for the 2020 tax season, policymakers should consider allowing filers to use their income from 2019 or 2020 when calculating their 2020 earned-income credit and child credit, as has been done for those affected by hurricanes and natural disasters in the past.
We urge Sen. John Cornyn and Ted Cruz, as well as the Tarrant County delegation to the House, to let the rest of Congress know the earned-income credit and child tax credit are important to the people of Texas and should be included in future COVID-19 relief bills.