It solves – scalable, accessible program that is proven to significantly reduce poverty rates.
Indivar Dutta-Gupta et al. 18, Co-Executive Director of the Georgetown Center on Poverty & Inequality (GCPI), where he leads work to develop and advance policy recommendations that alleviate poverty and inequality, advance racial and gender equity, and expand economic inclusion for all people in the United States, Published in 2018, “Working to Reduce Poverty: A National Subsidized Employment Proposal,” https://www.rsfjournal.org/content/rsfjss/4/3/64.full.pdf // KG
The total direct compensation costs of serving 20 percent of the full universe of eligible par- ticipants would be $15.9 billion annually to pro- vide subsidized employment for 2.4 million participants—which would benefit more than seven million members of those workers’ households.9 In addition to these direct com- pensation costs for wages would be added costs for payroll taxes and net tax benefits, wrap- around services, and state and local adminis- trative costs, which would further add to the annual costs.
The total additional earnings received would reduce the nation’s overall poverty rate (SPM) from 14.3 percent to 14.0 and thereby lift approximately one million people out of SPM poverty. The reduction in the poverty rate of expected program participants—who are significantly more disadvantaged than the overall population, having a poverty rate nearly 2.5 times the overall rate—would be far greater. For participants, the reductions in the poverty rate and the deep poverty
rate (those with poverty levels less than half the supplemental poverty measure’s threshold) would be sharp. The poverty rates among participants would be reduced from 35 percent to 20 percent and the deep pov- erty rate would fall from 14 percent to below 4 percent. Participants would also see a sharp reduction in the poverty gap (the difference between household income and the poverty threshold), eliminating the majority (62 per- cent) of their poverty. Low-income families that have incomes above the poverty level but less than twice the poverty level would also see ben- efits that would increase their families’ income- to-needs ratio by nearly 20 percent.
These calculations account for the likely change in tax benefits net of taxes paid, such as the EITC and the CTC, but not some net sav- ings that would occur for federal spending on other programs, such as Supplemental Nutri- tion Assistance Program (formerly Food Stamps), for which higher earnings would re- duce benefit amounts for participants (West and Reich 2014). The size and benefits of the program could also easily be scaled for lower participation levels of 10 or 15 percent of the universe targeted for services or higher partic- ipation levels of 30 percent.