Over the past five-plus years, as the country has dug itself out of the Great Recession, U.S. workers with lower levels of income and education have not experienced much of an economic recovery. We all know the story by now. Workers' wages remain flat. The unemployment rate is twice as high for those with high school degrees, compared with college graduates. And too many of the jobs being created come from low-paying sectors like retail, home health care, or tourism and hospitality.
The latest budget proposal from President Obama, released Tuesday, tries to combat this by seeking to expand the earned-income tax credit for low-income workers without children. (Right now, this group can only claim up to $500 from this tax credit, with strict restrictions on age and income eligibility, whereas a family with children claimed an average of $2,905 from the same credit in 2011, according to the Center on Budget and Policy Priorities, a left-leaning think tank).
Beyond the mechanics of how the tax credit would work, the administration's proposal is a huge yet subtle admission that the country's labor market remains too weak. The plan is basically a mea culpa, acknowledging that low-wage positions no longer cut it financially for a wide swath of Americans — and that they probably won't in the future either, unless the federal government somehow intervenes.