Alabama one of four states with no state-level EITC or minimum wage

Alabama is one of only four states with neither a state minimum wage nor a state-level Earned Income Tax Credit (EITC), according to a recent report from the Center on Budget and Policy Priorities (CBPP), a nonprofit research organization in Washington, D.C.

Both policies are designed to help workers and are “twin pillars of making work pay” for low-income families, the CBPP report finds. By adopting these policies, Alabama could seize two powerful opportunities to boost consumer spending, reduce income inequality and lift thousands of families out of poverty, Arise Citizens’ Policy Project executive director Kimble Forrister said.

“Too many working Alabamians can’t afford basics like nutritious food, decent housing and reliable transportation because their wages are simply too low,” Forrister said. “A state EITC and a higher state minimum wage would allow hundreds of thousands of hard-working Alabamians to spend a little more at the grocery store or the drugstore. These policies also would make it easier to pay for quality child care, emergency car repairs and other things that allow people to keep working.”

Alabama, Mississippi, South Carolina and Tennessee are the only states with neither a state minimum wage nor a state EITC, according to the CBPP report. Creation of a state EITC in Alabama was one of the key recommendations of a recent report issued as part of ACPP’s State of Working Alabama 2014 series. The federal EITC lifted 166,000 Alabamians out of poverty and pumped $1.4 billion into the state’s economy in 2011, the report found. A state EITC could help offset stagnant wages and expand economic opportunity for even more Alabamians, Forrister said.

“A state EITC would put more money in the pockets of working Alabamians, and that would send more money flowing through our state’s economy,” Forrister said. “Boosting family income through a state EITC would help put low-income children on a better path in Alabama. It would help kids go further in school, seek better educational opportunities and enjoy higher earnings as adults. That would be a win for workers, a win for our economy and a win for Alabama’s future.”

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