State policymakers have many opportunities to continue building the state’s fiscal health and invest in the people of California as they consider policy priorities for 2020-21 and beyond. While California is a wealthy state home to many high-income households and businesses that have been able to greatly leverage resources and expand their wealth in the last several decades, millions more Californians live a different reality every day. Workers in low- and mid-wage jobs are unable to afford the high cost of living – from paying for housing and child care to stretching their paychecks at the end of the month to cover food and medical bills. This is true no matter what region Californians work in across the state and call home.
It’s hard work to be able to afford to live, raise a family, and eventually retire in California, especially for workers with low or moderate incomes. While the plight of these workers has never been easy — and workers who are black, Latinx, or women experience some of the greatest economic disadvantages and discrimination in the workplace — research shows that wages and benefits have significantly eroded for many Californians in recent decades. Many workers are being paid little more today than workers were in 1979 even as worker productivity has risen.
Over the span of a career, most working adults need time off to care for a new child or a sick family member. California policymakers, administrators, and advocates — past and present — have forged a path in building the first comprehensive paid family leave program in the nation. Since the implementation of paid leave in California in 2004, workers across the state have received $8.9 billion in payments while taking time off work to care for their loved ones. Research shows that paid family leave has been beneficial for the workers who have accessed the program and for their employers.
State policymakers have significantly expanded California’s Earned Income Tax Credit — the CalEITC — since the credit was first enacted in 2015. However, hundreds of thousands of immigrant families are excluded from benefiting from the CalEITC as well as from California’s new Young Child Tax Credit, which is tied to CalEITC eligibility.
The California Budget & Policy Center’s guide, The CalEITC and Young Child Tax Credit: Smart Investments to Broaden Economic Security for Californians, provides an overview of how refundable state income tax credits help people who earn little from their jobs to pay for basic necessities and support families, children, and communities.