Last month, the U.S. economy added 235,000 jobs—below expectations and below the numbers from June and July, which hovered around one million new jobs apiece. Unfortunately, the adjusted assessment for August will likely be even lower, since the data collected did not reflect the surging COVID-19 Delta variant, wildfires in the west, or hurricanes in the Gulf and East Coast.
These crises—and their impact on the jobs and lives of the most vulnerable—are a reminder that Americans are living in a new era. U.S. policy tools must evolve to meet it. Fortunately, some solutions have proven useful in responding to the COVID pandemic—including a significant expansion of the Earned Income Tax Credit (EITC). As the debate intensifies this week over making the EITC expansion permanent, Americans must appreciate why it makes our economy more equitable and thus more resilient in a crisis-rich era.
Fifty years ago, President Richard Nixon proposed what has become known as the EITC. It became law under his successor, Gerald Ford. President Ronald Reagan expanded the EITC, calling it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” It is one of the most bipartisan and, studies have made clear, effective ways to expand and strengthen the American safety net. The EITC encourages work by increasing earnings for low-wage workers while generating substantial benefits in health, education, and quality of life.