LANSING – Macomb County House Democrats today won a major victory by creating a state-level Earned Income Tax Credit (EITC) for low-income families and protecting overtime pay for home health care workers and daycare providers.
"This is a victory for Macomb County working families who are struggling to make ends meet," Rep. Fred Miller (D-Mount Clemens) said. "A state EITC and overtime pay are crucial to helping working families in these tough economic times. These are the right changes that will put more money in people's pockets and help move Michigan forward."
Rep. Steve Bieda (D-Warren) said: "In an era of high gas prices and skyrocketing prescription drug costs, we need to do everything in our power to bring relief to Macomb County's working families. We value hard work in Michigan, and today's vote shows we're committed to standing firm with our working men and women."
The deal was reached as part of a compromise to "fix" an unforeseen side effect of increasing the state's minimum wage. When Michigan's minimum wage was increased above the federal wage of $5.15 earlier this year, certain segments of workers became eligible for overtime pay because the new state law inadvertently nullified federal overtime pay restrictions.
The state EITC will be equal to 10 percent of the federal EITC beginning in 2008. It will increase to 20 percent of the federal EITC in 2009 and thereafter.
According to a 2002 Michigan League of Human Services report, the creation of a state-level EITC will benefit 34,153 households in Macomb County and pump more than $5.2 million into the county's economy. The federal EITC can increase workers' annual pay by up to $4,400; the new state-level credit will help boost that by approximately $440 the first year, and approximately $880 in subsequent years.
House Democrats hammered out a deal that preserves the minimum wage increase for many of Michigan's workers, creates the state-level EITC and protects overtime pay for home health care workers and daycare providers.
The creation of the EITC comes as new data shows that median household incomes are dropping across the nation and in Michigan, while poverty is increasing. The annual median household income in Michigan fell by 12 percent from 1999 to 2005, according to the U.S. Census Bureau[1]. Other states' annual incomes also fell in the same period: Illinois saw a 7.9 percent decrease, Ohio saw a 9.3 percent decrease, Texas saw a 9.9 percent decrease and North Carolina saw an 11.3 percent decrease[2]. Meanwhile, the national average declined by 6 percent, according to the Census Bureau.
"This plan will put more money into the pockets of our working families and help them make ends meet," Rep. Lisa Wojno (D-Warren) said. "They've been left behind for too long, and the new state-level EITC is a change in the right direction."
The deal also protects overtime pay for home health care workers and daycare providers.
"Home health care workers and daycare providers do some of the most important jobs around –caring for our elderly parents and relatives, and caring for our children," Rep. Frank Accavitti (D-Eastpointe) said. "They put in a lot of long, hard hours, and we must show them that we value their hard work. Helping put more money in their pockets will make a big difference in the day-to-day lives of our working families."
"At a time when our students are fighting hard to succeed, we should be coming together to give them all the tools they need to compete for good-paying jobs," Miller said. "Our children's future is neither a Republican issue nor a Democratic one – it's a Michigan issue. Unfortunately, my colleagues across the aisle refuse to change the status quo and do what's right for our children."