I recently had the opportunity to participate in a working group tasked with identifying strategies that encourage CalWORKs clients to take full advantage of asset building programs and services. As mandated by AB 1078 (Lieber), a bill that was signed into law earlier this year, the California Department of Social Services (CDSS) assembled this large working group in Sacramento recently.

As I’ve reflected on this day, I’ve been struck by the promise this group has and what a shift this conversation represents. I was heartened that asset-building was finally being officially integrated in the state’s approach to helping low income families get ahead.

Representatives from the public and nonprofit sectors working on local, county, and state levels engaged in lively discussions to identify effective administrative and legislative strategies that encourage CalWORKs families to take advantage of

Earned Income Tax Credit (EITC), a refundable tax credit that is among the nation’s most effective tools in helping families leave poverty;

Save or invest part of their EITC funds;

And, leverage their savings through matched savings programs such as Individual Development Accounts (IDA)

The upshot of this group will be a formal report to elected officials. Findings and recommendations made by EARN and APIC along with other public and nonprofit organizations will be outlined to the legislature and released December 1, 2008. We hope creative conversation like this grow within California and in states around the nation.

Recent Census Bureau data finds that incomes declined and poverty increased for low -and middle - income Californians in 2007.

This reversal in trend is exacerbated by steadily increasing unemployment rate. In July 2008, California’s unemployment rate reached 7.3% —the highest level in 12 years. That’s not all; to cope with the current economic downturn, employers are cutting workers’ hours. This has profound implications in a state where nearly 29% of its households are asset poor - in other words, living paycheck to paycheck. Because many households lack the savings necessary to weather unexpected financial emergencies like job loss, we are seeing more and more families turning to public assistance programs like CalWORKs, Food Stamps, and Healthy Families program to make ends meet.

As California faces what many economists expect to be an extended period of slow economic growth, it seems our state’s workers and their families have little to celebrate this Labor Day.

To learn more, download California Budget Project’s new report, Labor Day 2008: Little to Celebrate.