Labor Day celebrates workers’ contributions to America’s prosperity. But even as our economy is growing, many people of color and women are struggling to get by on low wages. States can help make work pay by creating or expanding Earned Income Tax Credits (EITCs). Twenty-nine states plus the District of Columbia have enacted their own version of the federal credit to help low-wage, working households meet basic needs. States that haven’t yet enacted an EITC should do so, and those with small credits — or credits that don’t provide workers with the full value of the credit they’ve earned if it exceeds their income tax liability — should expand them.
When wages are stagnant for low-wage workers, as they have been since the late 1970s, women and people of color are particularly affected. Women comprise less than half of the workforce but roughly 3 out of 5 workers in occupations with low pay. And African American and Latino workers in general are far likelier than white workers to earn poverty-level wages. Because people of color and women are overrepresented in low-wage work, state EITCs are an important tool for advancing racial and gender equity.