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POLICY INSIGHT
BEYOND THE NUMBERS

Hardship in America, 2013: A Portrait of Another John Stewart

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Senior Director of Federal Tax Policy

The Washington Post profiles a very different John Stewart today.  Not Jon, the comedy show anchor, but John, who works for low wages helping elderly people board planes at Philadelphia’s airport.  Typically, he boards a bus around 2:00 a.m. and transfers to another before completing the seven-mile trip to begin his 4:00 a.m. shift.  “I can’t save money…,” he told the Post, “to buy the things I need to live as a human being.”  Proposals pending in Congress could help change that. America has millions of people like John Stewart.  They help dress and bathe many of our parents and children, and they cook many of our meals.  Almost one in 11 Americans with a job works in the food-preparation sector (cooks, servers, dishwashers, and the like), and workers in this sector earned a median wage of only $9.10 an hour in 2012.  Looking ahead, four of the ten occupations that the Bureau of Labor Statistics expects to generate the most new jobs by 2020 — home health aides, food preparers, personal care aides, and retail salespersons — pay poverty-level wages. The work that these people do makes our lives and the economy run smoothly.  We need to do more to reward the work of Mr. Stewart and the millions like him, and policymakers can make it happen. They can, for instance, expand the Earned Income Tax Credit (EITC) — a pro-work success story that has long received well-deserved bipartisan support.  It works for many people, but it largely leaves out childless adults like Mr. Stewart.  Childless adults are the only group that the federal government taxes into, or more deeply into, poverty (see chart).  House and Senate bills would change that, making more childless workers eligible for the EITC.  Such proposals hold strong promise of boosting employment and reducing poverty among people like Mr. Stewart.
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Additionally, policymakers could supplement the EITC’s income support with an increase in the federal minimum wage, and the Senate may soon vote on a minimum wage proposal.  Increasing the EITC and the minimum wage aren’t substitutes; policymakers should pursue both to reduce poverty.