As many of us receive our latest COVID relief payments, it’s worth considering how these funds can be utilized. For those who believe government assistance isn’t beneficial, I recommend looking into the positive outcomes it can create. For parents, this relief package mirrors a concept known as universal basic income (UBI), which has been trialed in various countries and is being proposed by the current administration. Starting in July and running through December, families with children under six will receive $300 per month, while those with children under 18 will get $250 per child.
This initiative differs from the traditional child tax credit because it targets those in greatest need: families in the lowest income brackets who have historically been overlooked in terms of financial assistance. It’s important to note that the credit is based on earned income, excluding unemployment and public assistance.
Biden’s relief measure is not the first of its kind. A notable experiment began in February 2019 in Stockton, California, where 125 individuals received $500 monthly, no strings attached. The program, known as the Stockton Economic Empowerment Demonstration, was funded by philanthropic organizations and aimed at individuals earning below the median income of $46,000 a year.
Interestingly, the outcomes of this experiment challenge common misconceptions. Participants did not lose their motivation to work or misuse the funds on substances. Instead, they utilized the money to pay bills, spend quality time with their children, and escape challenging situations.
If you’ve experienced poverty, you know that people will find ways to acquire their “luxury items,” with or without assistance. Those living in poverty face immense challenges, often juggling multiple jobs and dealing with the repercussions of a system that can be unforgiving. It’s crucial to allow individuals the autonomy to decide how to spend their money without judgment.
Recent findings from the Stockton project reveal that stable income significantly reduces stress and enables better decision-making. Especially during the pandemic, gig work has become increasingly unstable, making it difficult for many to maintain financial stability. Participants receiving the $500 monthly were less anxious and could plan for their futures, often transitioning to full-time employment.
Universal basic income does not promote laziness; rather, it enhances health and wellbeing. As Michael Tran, the former mayor of Stockton, noted, “Cash can alleviate some forms of depression and anxiety more effectively than medication. Many health issues stem from the stress of financial instability.”
Several cities across the U.S. are exploring UBI programs, but to effectively tackle poverty, a federal approach is essential. Currently, millions of children, including a significant number of Black and Latino children, do not receive the full child tax credit due to their families’ income levels. If Biden’s relief plan continues, it could lift nearly 10 million children out of poverty. The new tax credit could provide up to $3,600 annually for children under six and $3,000 for those aged six to seventeen, with payments distributed throughout the year to stabilize income.
Your views on “free money” and UBI may need reevaluation. The most effective way to assist those in need is to provide them with direct support. It’s worth noting that many affluent individuals have benefitted from generational wealth, allowing them to navigate life with fewer financial obstacles. The disparity in opportunities shouldn’t be attributed solely to hard work; luck and circumstances play significant roles.
Why should low-income individuals not have the same opportunities to take breaks, spend time with their families, and pursue their aspirations? Supporting people in improving their lives ultimately benefits all of society.
This article was originally published on March 29, 2021.
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Summary:
The article discusses the importance and benefits of Universal Basic Income (UBI), citing the Stockton, California experiment where participants received $500 monthly without conditions. The findings reveal that stable income reduces stress and encourages better decision-making, ultimately leading to improved health and well-being. The piece argues for the necessity of federal UBI programs, especially in light of disparities in wealth and opportunity, and emphasizes the positive impact direct financial assistance can have on individuals and families.