As many of us have recently received COVID relief payments, how we choose to use that money is personal. However, if you believe that government support is misguided, I can point you towards those who could truly benefit from your concerns. For parents, this relief package offers a glimpse into universal basic income (UBI), similar to initiatives being explored globally and suggested by the current administration. From July to December, families with children under six will receive $300 monthly, while those with kids under 18 will get $250 per child.
This initiative differs significantly from the existing child tax credit, as it’s designed to help those in the most desperate situations—particularly individuals in lower income brackets who haven’t historically qualified for assistance. This new credit targets those with earned income, excluding unemployment benefits, which means it aims to lift those struggling, not the extremely impoverished.
Biden’s relief package isn’t the first instance of testing the concept of giving “free money” to those in need. A notable experiment began in Stockton, California, in February 2019, where 125 individuals received $500 a month, no strings attached. The results have been enlightening, with researchers eager to share their findings.
Supported by philanthropic organizations, the Stockton Economic Empowerment Demonstration provided a monthly stipend to randomly chosen participants earning less than the median income of $46,000 per year. These individuals were not subjected to drug tests or work requirements; they were simply given support and trust.
Contrary to common misconceptions, recipients of this aid did not become less motivated to work or squander funds on drugs or alcohol. Instead, they paid bills, spent quality time with their families, and escaped abusive situations.
Having grown up in poverty myself, I can attest that people in difficult financial situations will find ways to obtain “temptation goods” regardless of assistance. Living in poverty is incredibly challenging, often filled with addiction and the burden of juggling multiple jobs to survive. Those small indulgences, like a pack of cigarettes or a drink, can sometimes provide necessary relief but don’t necessarily keep someone trapped in poverty. While not everyone makes the best financial decisions, it’s crucial to respect how individuals choose to spend their money.
New data from the Stockton experiment underscores the positive impact of predictable income on those whose earnings fluctuate month to month. This volatility became even more pronounced during the pandemic, making it increasingly difficult for gig workers to make ends meet. Participants receiving the $500 monthly allowance reported reduced stress and improved decision-making, allowing many to transition from part-time to full-time employment.
Universal basic income does not breed laziness or disinterest in work; rather, it fosters better health and well-being. As Michael Turner, the former mayor of Stockton, noted, “Cash is a more effective remedy for some forms of depression and anxiety than medication. Many health issues stem from toxic stress and anxiety linked to income instability.”
Several cities across the U.S. are considering UBI programs, but to truly eradicate poverty, a federal initiative is necessary. Currently, 27 million children in the United States, including a significant proportion of Black and Latino children, miss out on the full child tax credit due to insufficient family income. If the proposed enhancements to the relief bill were to persist, nearly 10 million children could be lifted above the poverty line. The new tax credit would increase the maximum annual benefit to $3,600 per child under six and $3,000 for those aged six to 17, up from the current $2,000 limit. Additionally, families would receive these payments throughout the year, reducing income volatility—a key lesson from the Stockton study.
Your perceptions about “free money” or universal basic income may be misguided. The most effective way to assist those in need is to provide them with necessary resources, not unsolicited advice or criticism. Have you considered the advantages that wealthy individuals have, often stemming from generational wealth, allowing them to navigate life with ease? This disparity raises questions about why some children receive financial support while others do not.
It’s not merely about hard work; it’s often about luck and opportunity. Many individuals in or near poverty work tirelessly yet still lack access to equitable opportunities. Why should lower-income earners be expected to constantly labor without the chance to rest, bond with their children, or pursue personal growth? Supporting individuals in their journey away from welfare ultimately benefits society as a whole.
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In summary, universal basic income presents a viable approach to alleviating poverty, as evidenced by the Stockton experiment. By providing financial stability, we can empower individuals to thrive rather than merely survive.