By Jean Rhodes
Let’s take a moment to celebrate some really good news for American youth and their families. Tucked into the new economic stimulus bill is the most sweeping anti-poverty effort in generations.– a guaranteed income for families with children. Although this provision hasn’t gotten much attention, it is expected to cut child poverty rates in half. That bears repeating–a 50% reduction in child poverty! Because the vast majority of youth served by mentoring programs are from low-income families (78%), and are twice as likely to be living in poverty than America youth overall (Jarjoura et al., 2018), this has important implications for mentoring programs and the families they serve.
New York Times reporter, Jason DeParle, who has devoted his career to covering children and poverty, was recently interviewed Daily Podcast (excerpted below with inserted subheadings). The bottom line is that this provision will fundamentally will reduce childhood poverty and lift the lives of our nation’s youth. in a year that has brought so much grief and upheaval, this week’s news brings hope and joy.
Why is the stimulus package so historic?
- DeParle: “It includes a guaranteed income for families with children: [The bill] provides direct payments to most American families. It extends unemployment insurance, expands food assistance. But the thing I think is really revolutionary about it is something I think most listeners probably haven’t heard of, and that’s called the child tax credit, which is really a guaranteed income for families with children. …. Guaranteed income for children. I mean, just that the government is guaranteeing income for all families with children by sending them checks on a huge scale. The parents of ninety three percent of American kids, 69 million people, would be getting monthly checks of up to three hundred dollars a month. Three hundred dollars per child, no matter how many children, no matter how many children…. It can be used for whatever the parent wants. They can use it to subsidize the rent. They can use it to put food on the table. They can use it to pay for the music teacher. They can use it to take the kids out for pizza. It’s their money. They can do it as they see fit. A family with three children under the age of six [would receive] an annual benefit of nearly eleven thousand dollars. And for low income people, that would be on top of anything else they might qualify for, like food stamps or other forms of assistance. [It does not apply to the 6% of families with an annual income threshold of one hundred and fifty thousand dollars].
- It represents a major values shift: This bill is the government saying that, you know, there’s just a level beneath which no child should be able to fall in the United States. That’s a fundamentally different way of thinking about what children need and what the government’s responsibility is in providing it. I thought, are you serious, really, in the United States of America? I mean, this idea just seemed so unlikely for so long. It was astonishing. I think most clear eyed poverty analysts would have said this wasn’t even a long shot because the United States had always been very resistant to income guarantees and dismissed these kinds of ideas as European socialism.
- It will dramatically reduce in childhood poverty in the US. It would cut the child poverty rate nearly in half and by more than half for African-American children. It’s a universal benefit, but it disproportionately helps families at the bottom. Think about it like Social Security. Social Security, almost everybody gets Social Security. It’s a universal program, but Social Security vastly cut the poverty rate among elderly Americans. So when you put in an income floor, it helps everyone, but it helps the people closest to the floor the most. So this would be the parallel for four children.
- It is a universal benefit and an antipoverty program at once: So we should think about this as a universal income program for children. And we should think about this as an anti-poverty program. And that’s really at odds with the way most of American social policy is done, which is a much more targeted benefit. We don’t have universal health care. We have Medicare, a program for the elderly. We have Medicaid, a program for the poor. It takes the opposite approach. It says we’re basically going to help virtually all families with children except for the most affluent. So it is both a universal benefit and an anti-poverty program at once, which makes the politics of it, of course, very different.”
Putting the new bill into historical context
“There have been debates about whether to provide an income floor for children for many decades. In fact, in the 1930s in the New Deal, we created a program of income guarantees for poor children and aid to families with dependent children. But the country took a very different approach. In the 1990s. We went the opposite direction….President Bill Clinton abolished that program, abolished aid to families with dependent children, and began a system where we only aided families who were working. There was a concern that providing people money without demanding anything in return produced negative consequences, that it was a disincentive to work, that it was a disincentive to marry, that it was subsidizing self-destructive behaviors…. Government aid became defined as the problem. So it wasn’t that we would provide less aid to the poor. In fact, aid to the poor grew, but it only went to families with earnings. It left fewer protections for families who, for whatever reason, didn’t find or keep work and eroded the safety net for the children in those families.”
What changed to enable this universal benefit, regardless of whether a parent works?
- Formative years: “The recognition of how important early childhood was. Even a short stay in poverty could bring lifelong negative consequences, lower educational attainment, worse health, lower earnings, higher involvement in the criminal justice system. I think as a society, we gained an increased appreciation of the importance of the formative years.
- Growing inequality: The growing economic inequality and poverty began to seem less like a phase and more like a fate that I think broad sections of the American public began to lose some of the faith they had in upward mobility. The idea that anybody could work their way out of poverty, I think became a bit of a harder sell… In the 1990s, I think the broad world view was that American society was generally prosperous and there was generally opportunity for most people. Yet there was this minority who were unable to participate in the broader prosperity of society that were stuck somehow. And I think the framework now is really quite different. I think there’s a shaken faith in how broad prosperity is and how much opportunity there is in American society. And this says that as people at the top flourish, we can’t leave behind this large segment of families who find themselves going up and down the economic ladder and battered by income volatility.
- Pandemic effects…The economic crisis caused by the pandemic has really changed the policy environment. With so many more people needing aid, the politics of providing cash assistance has lost some of its stigma.
- Social unrest: With the unrest of the past year, the Democratic Party in particular is looking for ways to address structural racism and historic injustice. And this is a policy that, while Universal, has the greatest effect on reducing poverty among blacks and Latinos, and that enhances its appeal….I think some political scientists would call it a classic window of opportunity where something’s been building for 20 years and then a crisis erupts in society and gives it the opportunity to sail through.
- Fertility …There’s also a potential fertility effect. And we’re in a time of declining fertility rates and we’ve dipped below replacement. And this subsidizes child rearing. So conservatives who fear we’re not having enough children might look favorably on this as a subsidy for having more.”
“The law President Biden is expected to sign this week establishes the benefit just for a single year. The Democrats have made clear they see this as the future of social policy. I mean, this is a seed that plants what they hope will be a revolution in social policy. They want to make it permanent… The Democrats hope this will follow along the same lines and become just a fixture of the social safety net and seem as unremarkable to future generations as Social Security does to ours.”