Expand Economic Opportunity and Reduce Child Poverty

• Job training enhances wages and skills. Job training programs that focus on industry-specific skills are demonstrating significant success. In a study of six leading programs in California, New York, Michigan, Illinois, and Texas, participants increased their year-round employment levels from 23 percent to 66 percent, and increased their median earnings from $8,580 to $17,732 after two years.[i]

Kentucky and Washington State have created education pathways where adult learners avoid being trapped in basic education by seamlessly transitioning to -- or simultaneously enrolling in -- courses that lead to certificates and degrees. Kentucky improved its adult education to college transitions from 12 percent to 21 percent over seven years. In Washington State, participants in this type of program have earned 5 times more college credits than traditional basic literacy students, and are 15 times more likely to complete job training.[ii]

• Caps on payday lending save money. In the area of predatory payday lending, fifteen states and the District of Columbia curb small loan rates. Through setting reasonable maximum rates on small loans—no more than 36 percent—these states protect consumers from predatory loan practices. In all, these payday lending protection measures saved families an estimated $1.4 billion in 2006 alone.[iii]

Setting reasonable loan rates has had a big impact on North Carolina’s low-income families. In 2000, the state with the highest proportion of loans made to low-income families that were subprime was North Carolina. With reforms including rate caps, limit predatory practices and fees, and prevented abusive refinancing and loan steering, It is estimated that North Carolina citizens saved $100 million in the first year these efforts were implemented.[iv]

• Tax credit lifts millions out of poverty. The Earned Income Tax Credit (EITC) is a federal tax credit and a state tax credit in 24 states that lifts approximately 4 million people, including 2 million children, out of poverty. [v] In 2006 the Iowa General Assembly appropriated $200,000 to improve EITC outreach. The following year, EITC claims rose 30 percent in Des Moines alone, bringing an additional $2.6 million into the local economy. [vi]

T he National Tax Assistance for Working Families Campaign promotes awareness of tax code benefits among low-income families at more than forty sites in a wide variety of urban and rural neighborhoods. The number of taxpayers served through this initiative has grown from 96,000 in 2003 to over 220,000 in 2006, resulting in EITC claims totaling more than $520 million.

• Public benefit eligibility processes improve insurance access. In 2000, the State of Louisiana changed its approach to enrolling low-income families in the Medicaid and the State Children’s Health Insurnace programs. The old program had a strong emphaisis on quality control, error reduction, and thorough case documentation. After realizing they were not achieving their primary goal of helping families secure health insurance, the state agency altered its approach. The new approach worked to remove enrollment barriers and make the process “user friendly” had a primary focus of enrolling children and families, and paying special attention to the well-being of families as they transition off of TANF. As a result, the state saw 56 consecutive months of increases in the numbers children eligible of public health insurance that were enrolled and stayed enrolled throughout their eligibility cycle. This was accomplished through changes in document requirements as well as a new focus within the State Department of Health and Hospitals on ensuring more children receive public benefits.[vii]