While the District, as a whole, has fared better than most through the course of the Great Recession, some of our communities continue to struggle with upwards of 30 percent joblessness and growing levels of poverty.
In fact, according to the Brookings Institution, the District is the only jurisdiction in the nation where some neighborhoods suffer a poverty rate over 40 percent. Despite a strong jobs engine, too many District residents continue to be left out of the economic security and prosperity afforded by the city's strong employment market.
It is because of that continued exclusion from economic security and prosperity that I recently introduced two pieces of sweeping legislation that will empower the chronically unemployed and reform existing government policies to create new opportunities for District workers. The "Worker Assistance and Gainful Employment Support Act of 2011" (WAGES Act of 2011) increases the financial stability of low-income workers and incentivizes transferable skills training.
The "District Workforce and Business Fairness Act of 2011" strengthens resident employment requirements for certified business enterprises. The reforms contained in these bills will get more money into disadvantaged workers' pockets, provide real financial incentives to hire and train District residents, and harness the tremendous economic power of our procurement dollars in a way that more fully benefits District residents and businesses.
First, the WAGES Act will expand eligibility for the District's earned income tax credit. Experts agree that the earned income tax credit is one of the most effective anti-poverty programs ever implemented. As it is currently configured, the credit remains unavailable for many District residents to whom it would be similarly effective. Young workers ages 18 to 24 -- who are not claimed as dependents on another's return or do not have children of their own -- are ineligible for the credit. The WAGES Act will expand access to the District's earned income tax credit to all residents ages 18 and older who meet the income requirements for the federal credit and are not eligible as a deductable child on another individual's tax filings.
Additionally, the WAGES Act expands the reach of the District earned income tax credit to more low-income non-custodial parents. Under current law, only individuals below the age of 30 can qualify despite the average age of a non-custodial parent being 34 years old. The WAGES Act removes the age limit entirely for non-custodial parents who pay child support through a court ordered program, increasing the credit amount available to those taxpayers.
Expanding access to the District's earned income tax credit will get more money into the pockets of those individuals who need it the most. The "District Workforce and Business Fairness Act of 2011", which I introduced along with my Ward 3 colleague Councilmember Mary Cheh, ensures the District government keeps up its end of the bargain when it comes to job creation for District residents.
Our local government procures hundreds of millions of dollars of goods and services every year and thousands of individuals are employed by District contractors and subcontractors. With the unacceptably high number of residents who are chronically unemployed or underemployed, it is time that our procurement process places a premium on ensuring that District residents are put to work. The "District Workforce and Business Fairness Act of 2011" would make it mandatory that at least 50 percent of the employees of a business enterprise be District residents in order for that business to be certified as a Local Business Enterprise. Current law gives Certified Business Enterprises (CBEs) a massive 12-point benefit in the District government's procurement process.
The Act will ensure that the preference given to CBEs is reserved for true District businesses that actually employ a significant percentage of District residents. Under existing law, a business may claim the benefits of being a certified LBE without employing a single District resident. As a result, the current certification requirements erode the value of being a true local business. The Act would also require a cost assurance program wherein the winning bid of a CBE may not be greater than 12 percent above the cost of the goods or services in the commercial market.
Under current law, a company can be certified as an LBE without any on-site verification by the Department of Small and Local Business Enterprise Development. The "District Workforce and Business Fairness Act of 2011" will improve oversight and reporting for all CBEs. The Act would require the Department of Small and Local Business Enterprise Development, which administers the CBE program, to conduct yearly on-site inspections and audits as a condition of certification. The number of businesses claiming certification as a CBE has grown to over 1000 as of this past year. The bill will ensure oversight keeps pace with that growth.
Chronic unemployment and exclusion from economic security are problems that the District has grappled with for generations. The solution, however, is not likely to fall upon us at random nor is it simply a matter of implementing one perfect policy. The solution does not lie in begrudging those with education and jobs and it certainly does not lie in the oversimplification and victimization of those who have neither.
The real solution is to constantly and creatively implement public policies and programs that chip away at the walls that poverty has created in our communities. Both the WAGES Act and the Workforce and Business Fairness Act are examples of creative, targeted policies that can impact entrenched poverty long term.