If Biden’s American Family Plan goes into effect as he proposed, my great-niece Harri will finally have a “modest but decent” standard of living based on a new federal government commitment to provide social wages.
Harri is a 30 year old single mom of two children, one 3 year old and one in school. As an assistant manager at Walmart, she makes about $ 47,000 a year, but about $ 8,000 of that goes toward daycare for her preschooler. She recently started receiving $ 550 a month in a child tax credit (CTC), but that’s only a temporary boost for the next year that was part of the Democratic stimulus package in March. If the family plan becomes law, she will get CTC money for an additional five years and her preschooler will get free public pre-school education, relieving Harri from paying for day care.
Add it all up and Harris’ income increases by $ 6,600 and she saves $ 8,000 a year in daycare costs. It will increase from $ 47,000 a year to $ 53,600 a year, but excluding childcare costs, its real spending income will increase by $ 14,600, an increase of 37%. Where she lives, in central Pennsylvania, the Economic Policy Institute estimates that excluding childcare costs, she would need about $ 49,000 to have a modest but decent standard of living. Harris will have a little more. $ 53,600 won’t bring her a luxurious life, but the scale of that change should be transformative for Harri and her children.
Harri will get more than parents with fewer children or fewer preschoolers, but she will get less than parents with more children or more than one preschooler. The point is that the combination of CTC and public Pre-K (plus an additional program where parents of one and two year olds pay no more than 7% of their income for day care) made a dramatic difference in the lives of most parents as well Children. It is often claimed that the CTC alone will cut child poverty in half. But the whole combination will do a lot more for many more families, including those who are not poor but struggle to get along.
In addition to its multiple impacts on various American families, Biden’s Family Plan is a pioneering commitment to the concept of social wages, a concept that is even more widely applied. Along with other Biden initiatives, there seems to be a firm democratic recognition that most workers are underpaid in market wages to get by, and that the government has a responsibility to change that.
Social wages differ from the often (and loosely) used term “social safety net”. Safety net programs like unemployment benefits and temporary relief for families in need are designed for people who, for one reason or another, have gotten into a difficult time. Like a web, they prevent people from falling further by providing temporary income until they get back on their feet.
Social wages, on the other hand, are more permanent, less means-dependent and available to much larger groups of people. They either subsidize vital workers by increasing their wages or by reducing the cost of common goods and services. Biden’s various plans include home care and day care wage subsidies, which now average $ 23,000 and $ 22,000 a year, respectively. Obamacare grants and the income tax credit do this for a wider group of low-wage workers. Many labor force cities, such as New York, have long had reduced fares and rent controls to keep the cost of low and middle wage workers affordable, although better paid workers also benefit. In the post-war years, the Amalgamated Clothing Workers Union set up a cooperative housing and even a not-for-profit bank to help reduce the cost of living for its members and other workers.
Read the rest of this article under Working Class Perspectives.
Jack Metzgar is a retired humanities professor at Roosevelt University in Chicago, where he is a core member of the Chicago Center for Working-Class Studies. His research interests include labor policy, working class electoral behavior, working class culture, and popular and political discourse about class. He is a past president of the Working Class Studies Association.