As we approach Labor Day, many workers in DC are out of work, going hungry and falling behind on rent because of the pandemic. Black residents especially have felt the grip of the pandemic downturn in an economy that has been built on racial inequities. Thankfully, the DC Council made some critical investments in the upcoming fiscal year’s budget that will support the well-being of workers and our economy.
Among the biggest wins for workers is the DC Council’s creation of the nation’s most generous state and local Earned Income Tax Credit (EITC), a refundable tax credit for working people with low incomes that will now be delivered monthly. Right now, someone with three or more kids can get a maximum credit of $6,728 — which DC matches at 40%, adding $2,692. By 2026, DC will match the federal amount at 100% — meaning that such working families would receive a combined EITC of $13,456 that year, holding all else equal. DC residents will also collect most of the credit as monthly payments starting in 2023.
Putting money directly into residents’ pockets every month can help them pay bills, care for their children and possibly save for a rainy day, providing more stability and financial security. It provides a boost to our economy, too.
This year, the DC Council also raised taxes on wealthy DC residents — in part, to help pay for higher wages for underpaid early educators who are the foundation of our early learning system and shape the most defining years of infants’ and toddlers’ development. DC’s early educators — who are primarily Black and brown women — earn a median annual income of $31,950, which is barely above the minimum wage. Inadequate pay has resulted in 1 in 3 early educators living in poverty, and many leaving the industry in search of higher wages.
Raising pay for early educators is a transformative investment that will help create an economy that works better for everyone, move them closer to pay equity with public school teachers, and improve the quality of and access to early learning for DC’s kids.
At the same time, not all workers have been able to stay at or keep their jobs. For some, caregiving responsibilities came up at home; in other cases, it’s because businesses paused operations or closed. For these workers, the DC Council amped up paid leave, voted to send one-time $500 payments to people who had to wait more than 60 days to get their unemployment benefits, and devoted additional money for cash assistance to workers who have been excluded from traditional unemployment payments.
The pandemic has made it undeniably clear just how important it is to be able to take paid time off to care for our own health or the health of our loved ones. This year, the council increased personal medical leave, which allows workers to take time for their own serious illness, from two to six weeks. In the future, DC will also gradually extend benefits to 12 weeks each of parental, family caregiving and personal medical leave. By strengthening job protections, the council also helped ensure that workers who take leave won’t be risking their jobs.
Many workers — street vendors, domestic workers, day laborers, sex workers, and immigrants who are undocumented — aren’t eligible for unemployment benefits. When employed, these workers are often paid low wages, experience wage theft and lack job security. These poor working conditions leave them less equipped to navigate hard times when they are unemployed.
Advocates for these excluded workers asked for $200 million to pay for direct cash assistance. The approved budget set aside $41 million. Still, the final number is four times the investment provided to excluded workers last year and will help these vital workers stay afloat.
On Labor Day, workers in DC will be serving meals in restaurants, ringing up back-to-school supplies, or caring for our children — jobs we have determined to be essential over the past year and a half. The investments made by the DC Council to directly help workers with low incomes most harmed by the pandemic will help create a just recovery that extends to all residents.
They will also begin to address the persistent racial inequities that have left Black and brown communities in DC more vulnerable to the COVID-19 crisis by excluding them from employment opportunities and economic gains. Research has shown that Black and brown workers face longer rates of unemployment both during the peak of recessions and throughout economic recovery because of structural racism and ongoing labor market discrimination. In DC, prior to the pandemic, Black workers still had not fully recovered from the Great Recession — 10 years after its peak.
As a victory achieved by labor activists, Labor Day as a federal holiday is itself a reminder that many of our rights and protections on the job are hard-won. This year, DC took important steps toward supporting workers and building a more equitable economy — but these steps can’t be our last.
For instance, the DC Council did not include funding for “Hero Pay” for essential workers who put their lives on the line to keep the District running during the pandemic. They can correct this shortcoming by finding funding in the next budget season. The council should also work to create stronger supports for those who are unemployed for extended periods and make the necessary investments to ensure a just recovery for excluded workers.