72°Partly Cloudy

Del. Ken Plum: Reinvigorating Virginia’s Economy

by Del. Ken Plum — January 28, 2015 at 11:00 am 11 Comments

Del. Ken Plum/File photoVirginia is well on its way to economic recovery for many families, but working families across the state are telling me and other legislators that they feel like the recession never ended. Even in Northern Virginia, home to some of the wealthiest localities in the country, too many families struggle to earn enough to pay for basic necessities despite having full-time jobs.

At the same time that households are struggling, Virginia’s economy is growing at a snail’s pace, according to studies by the Commonwealth Institute for Fiscal Analysis.

Job growth has not kept up with the number of workers who want jobs, and state revenues have fallen as a result. Virginia needs families who earn good wages, who spend their earnings in the local economy to buy fuel, food, clothes, and other necessities, and who in doing so, help jump-start our economy. But when wages stagnate, the economy stalls, and that hurts all of us.

Fortunately, we have proven policy solutions to help strengthen our working families. We can make our state’s Earned Income Credit (EIC) refundable and increase the minimum wage. Unfortunately, many of my colleagues in the General Assembly have chosen to leave these income boosting solutions on the table. That’s unfortunate and short-sighted.

The Earned Income Credit is a targeted tax credit that middle class and low-income families can claim at tax time to reduce what they owe in state income tax. It also promotes work because you have to be working in order to claim it, and the credit is structured to reward working more hours.

As it stands now, if the value of the credit is greater than what you owe in state income tax, you’re not able to get the difference in a refund. But if the EIC were refundable, working families would get back some of their wages that they paid in sales taxes in one lump sum to pay for a car repair or for the child care they need to go to work. Nineteen states provide for some amount of refund.

While the EIC provides a bump in income once a year, raising the state minimum wage will increase earnings for low-wage workers in each paycheck. If Virginia increases the minimum wage to just over $10 by 2017, close to 700,000 workers throughout the state would see an increase in their wages. Out of this group, the vast majority are 20 or older, and close to 300,000 children have at least one parent who will get a raise.

Clearly, increasing the minimum wage predominantly helps working adults, not just teenagers, and it will help many parents who rely on these wages to care for children. More money to the working poor generates economic activity for small businesses.

Making Virginia’s Earned Income Credit refundable and increasing the minimum wage should be part of an effective, long-term strategy to strengthen our families and the economy. I have introduced two bills to accomplish this purpose. I hope local business groups will drop their opposition in order for the bills to pass. These bills should not be partisan. They will benefit all Virginians and Virginia businesses.

Del. Ken Plum represents Reston in Virginia’s House of Delegates. His opinions are not necessarily those of Reston Now’s. 

  • Mike M

    “Fortunately, we have proven policy solutions to help strengthen our working families.”
    Ken, my Socialist friend, government policy doesn’t really fix economic problems. The economy does,. If you and government let it. Oh, and have you any “proof” at all?

    Why don;t you cut taxes and other burdens on those who provide jobs?

    • Greg

      Isn’t Ken Plum a product (dropout?) of the public school system?

      • Mike M

        I know little of Mr Plum’s past. I wonder is he a carpetbagger grandchild or a descendant of slaveholders. I strongly suspect the latter the way he scolds us about race relations all the time. Even though my family never held slaves unless maybe you go back 1000 years.

  • Dexter Scott

    If Virginia increases the minimum wage to just over $10 by 2017, close
    to 700,000 workers throughout the state would see an increase in their
    wages.

    And those who don’t get hired because employers can’t afford it will see no increase in their non-existent wages!

    http://www.nber.org/papers/w12663.pdf?new_window=1

    “A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employmenteffects, both for the United States as well as for many other countries… the studies that focus on the least-skilled groups provide relatively overwhelmingevidence of stronger disemployment effects for these groups.”

    • Mike M

      There is one notable, and discredited study from NJ that points the other direction. it is outnumbered 50 to 1. Yet the Dems consistently point to it as “proof.”

  • JohnGalt

    And when they raise the minimum wage to $15 an hr that will be the break point for fast food and other remedial jobs to automate. No more cashiers taking your order. Just a nice touch screen where you pick your food and swipe your credit card. Actually, that doesn’t sound too bad

    • Greg

      Bring it. The touch screen, that is.

  • CE

    “I can’t afford feed my 5 kids on minimum wage.” said the man 300 pound man on the couch from his government subsidized apartment in Reston. “They only give me $1000 in food stamps a month and we got to eat.” “I vote for Plum even though his name makes me think of fruit which I hate.”

    • Greg

      Surely you have seen the pure luxury in which he lives, no?

  • Greg

    How is it that he gets re-elected time and time again?

    • JohnGalt

      People like free stuff

×

Subscribe to our mailing list