Public investments benefit families, communities, and the economy
Investments in public supports can reduce the costs of poverty and provide a return to the economy in terms of increased earnings, health, and taxes paid. States that tend to invest more in public supports show more positive outcomes of economic well being.

The Center for American Progress, in their 2007 report Poverty to Prosperity, a National Strategy to Cut Poverty in Half, shows that federal investments in an expanded EITC and Child Tax Credit, increasing child care subsidies to reach families up to 200 percent of FPL and raising the minimum wage to 50 percent of the average non-supervisory wage could cut poverty by 26 percent. Each proposal alone also reduces poverty as would increasing housing vouchers, raising food stamp participation, and eliminating the legal immigrant restrictions on public benefits participation. Reducing poverty costs money. The cost of poverty is also high. Another recent analysis shows children growing up in poverty tend to experience poor health and lower productivity, a cost to the economy estimated at $500 billion per year.

Typically one in four or one in three families work and still cannot achieve a basic standard of living for their family. People may have a hard time knowing what services are available to them. And, even when they are eligible, funding may be so limited that they are refused assistance. Even if people receive all the supports for which they are eligible, the total still may not be enough to reach a basic standard of living. Finally, as a family’s income increases they can lose valuable supports that decrease their overall resources.

The National Center for Children in Poverty (NCCP) has studied this “cliff” effect in Iowa and Washington. NCCP’s Family Resource Simulator illustrates the costs of making ends meet and the interaction of public support policies and increases in earnings to show at what point and by how much families are affected by the loss of certain public supports.

In addition to benefiting the individual and family, public supports also provide a significant return to the community in terms of dollars invested and in an expanded tax base from the greater economic productivity of families receiving supports. The Iowa Policy Project is currently investigating this return on investment of public supports.

Investing in and coordinating public supports in a manner that encourages workers to move up the income ladder and sustain their well being is a key strategy for improving economic security and reducing poverty.

Iowa Policy Project
Expanding Iowa's Earned Income Tax Credit - The Long Term Benefits to the State
A Healthier Iowa Labor Market: Medicaid Expansions and the Impact on Incomes and Work Choices
Education Pays in Iowa : The State's Return on Investment In Workforce Investment
Strengthening Child Care Assistance in Iowa - The State’s Return on Investment - March 2009