Guaranteed income for children has arrived in America
Last week the next chapter in America’s great guaranteed income experiment continued. Almost every parent with a child in this country had a check deposited in their bank accounts, again. Don’t be fooled by the name, the child tax credit isn’t just a tax credit. This is an unconditional monthly allowance, a form of guaranteed income – just one that targets our undeniably most deserving population, our children.
And it has the potential to change the way Americans think about who deserves access to money and how we get back to work.
The CTC is also revolutionary in its scale and the speed of its effectiveness. He is expected cut child poverty by almost half this year, even if it helps middle-class families save for college and pay for summer camp. And it will have a much needed and disproportionate impact on those living in severe poverty, as well as on Black, Hispanic, and Native American children as a whole.
It is both an extremely effective anti-poverty program and a tax cut for the middle class. As the recent analysis of Urban Institute Emphasized, programs such as stimulus checks and the CTC can dramatically reduce poverty in a remarkably short period of time.
The first round of CTC payments made a huge difference to individual households and to the economy in general. Retail sales in July rose to 10.9 percent, almost quadruple the average growth in July.
And since the CTC is an almost universal benefit, it helps people in every community in this country: urban, rural, suburban and everything in between. In a recent analysis, the Niskanen Center found that when looking at state gross domestic product, rural states had the greatest relative advantage in the advantage.
The radical common sense of these direct money programs has a lot to teach us about how we can rebuild our economy. The organization I co-founded, the Economic Security Project, made it their mission to improve these lessons. We have invested and partnered with local organizations and cities to learn from the guaranteed income pilot programs.
But not everyone is so sure that all of this direct money is a good thing. Under unfounded fears that available money will deter people from taking jobs that help our economy run smoothly, 26 states rushed to end federal unemployment benefits this summer, ahead of their scheduled expiration in September.
As one can see, these actions did not stimulate job searches and probably only reduce household spending. In addition, the most recent jobs report indicated strong hiring gains, especially in the leisure and hospitality sector, thwarting the notion of labor shortages.
The last time the United States had a vested interest in bringing women into the workforce, it invested in a federal version of universal child care. It was a short-lived effort that ended when the men returned after the end of WWII, but the women, who benefited from this program, who had the choice and flexibility of its implementation. , protested. They demanded permanence.
Like Eleanor Roosevelt wrote As a result, “Many thought it was purely an emergency measure of war. A few of us felt that maybe this was a need that was with us all the time, but that we had neglected to address in the past.
As American families continue to receive these payments and use them to help pay for basic needs or to save for their children’s college education, it behooves Congress not to let the CLC expire.
The CTC has found political will at a time of global crisis. Let’s make sure we learn important lessons from COVID-19 and be better prepared for the future.
Natalie Foster is co-chair and co-founder of the Economic Security Project, a support network for exploring and experimenting with guaranteed income, and a senior fellow at the Aspen Institute Future of Work Initiative.