In 2012, the Community Advocates Public Policy Institute (CA-PPI) released an analysis by the Urban Institute (UI) that showed that a combination of four policy changes, which CA-PPI developed in consultation with a group of local and national experts, could cut poverty by more than half.

    The policy package developed by CA-PPI consists of: (1) a Transitional Job offer, at the minimum wage and for up to 40 hours of work per week, to adults who are unemployed or underemployed; (2) an increase in the minimum wage; (3) a restructuring of the Earned Income Tax Credit under which all low-income adults (regardless of marital status or number of dependent children) would qualify for an earnings supplement, and all low-income families with dependent children would qualify for a separate earnings supplement that varies with the number of children; and (4) a new tax credit for adults who receive disability income or Social Security income.

     The UI analysis showed that the proposed policy package would have reduced poverty in Wisconsin in 2008, using the more realistic Supplemental Poverty Measure (SPM), between 58% and 81%, depending on the rate of take-up of proposed Transitional Jobs and existing economic security programs. The baseline SPM poverty rate was 8.0%. According to the UI’s estimates, the policy package would have reduced the poverty rate to between 3.4% and 1.5%. The decline in poverty was roughly the same for children, adults 18-64, seniors, blacks, Hispanics, and other groups. The UI analysis also provided cost estimates.

          The UI analysis focused on Wisconsin in 2008, and it assumed changes in federal policies. The nature of the policy package is such, however, that we believe that it would result in comparable dramatic reductions in poverty in any state—and in the U.S. as a whole—and would do so regardless of whether the policy changes took place at the state or federal level.

       The proposed presentation would cover the history of the policy package; the choices made in selecting its four components; the methodology used by UI in utilizing its TRIM3 microsimulation model to generate results; and some of the potential implications for state and federal policy.