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Recently, many of us have received our latest round of COVID relief checks. How you choose to use your funds is entirely up to you, but if you’re among those who believe government assistance is unwarranted, I’d be happy to point you towards individuals and communities that could truly benefit from your perspective. For parents, this relief package offers a glimpse into the principles of universal basic income (UBI), an idea being explored globally and also proposed by the Biden administration. Starting in July, families with children under six will receive $300 monthly, while those with children under 18 will get $250 per month.
This new credit differs from the existing child tax credit as it targets those in greatest need: families in the lowest income brackets who haven’t previously earned enough to qualify for crucial assistance. Indeed, only those with minimal income can benefit, as the credit hinges on earned income and taxes paid, excluding unemployment or public aid.
Biden’s relief initiative isn’t the first to explore the implications of providing “free money.” A significant study began in February 2019 in Stockton, California, where 125 participants received $500 a month, no strings attached. The findings are now available, and researchers are excited to share them.
Funded by philanthropic organizations, the Stockton Economic Empowerment Demonstration selected individuals with average incomes below the median of $46,000 annually and provided them with $500 each month to spend as they wished. There were no drug tests or work requirements; participants were simply trusted and supported.
Contrary to the skepticism of those who have never sought assistance, recipients of this aid did not become less motivated to work or indulge in drugs, alcohol, or other so-called “temptation goods.” Instead, they managed their bills, spent quality time with their families, and escaped toxic relationships.
As someone who grew up in poverty, I can affirm that individuals find ways to obtain their “temptation goods” regardless of assistance. Living in poverty is incredibly challenging, often intertwined with addiction, abuse, and the struggle of juggling multiple jobs just to survive. While some may use a pack of cigarettes or a drink as a coping mechanism, it doesn’t necessarily perpetuate their poverty. I don’t presume to speak for everyone in poverty, nor do I believe all make perfect financial choices. However, I recognize the rationale behind spending that may appear unnecessary to outsiders. It’s not for others to dictate how people use their money.
Newly released data from the Stockton experiment emphasizes the advantages of predictable income for those living paycheck to paycheck. Gig work has become increasingly erratic during the pandemic, and for gig workers, the fluctuating nature of employment complicates meeting monthly expenses, let alone planning for the future. Participants receiving $500 monthly reported reduced stress levels and improved decision-making for their futures. They were able to transition from part-time to full-time work and experience a sense of relief.
Universal basic income doesn’t breed laziness or frivolity; rather, it fosters health and well-being. “Cash is a more effective remedy for certain forms of depression and anxiety than Prozac. Many of the issues we see in our community stem from toxic stress and anxiety linked to income instability and the inability to cover basic needs,” stated Alex Rivera, former mayor of Stockton, who championed the project.
Several other U.S. cities are exploring universal basic income initiatives, but to truly address poverty, a federal approach is essential. Currently, 27 million children in the U.S.—including a significant proportion of Black and Latino children—missed out on the full child tax credit because their families earn too little. If Biden’s historic relief bill were extended, it could lift nearly 10 million children above the poverty line. The new tax credit would increase the maximum benefit for many families to $3,600 per child under six and $3,000 per child aged six to 17, up from $2,000. Furthermore, parents would receive payments throughout the year rather than just during tax season, thus reducing income volatility, a benefit highlighted by the Stockton study.
Your views on “free money” or universal basic income may be misguided. The most effective way to support those in need is to provide them with the resources they require, rather than offering criticism or suggesting alternatives. And let’s not forget about trust fund babies or the privileged ones who glide through life, supported by generational wealth that affords them a safety net. When taxes are paid on income, how is that income truly “earned”? Why do some children gain access to financial support while others do not?
It’s not merely about hard work or determination; it’s about luck and opportunity. Many individuals living in or near poverty work exceptionally hard yet still lack access to equitable opportunities. And who says we must labor incessantly? Why shouldn’t lower-income individuals be allowed to take breaks, spend time with their families, take risks, and pursue opportunities that could enhance their emotional and physical well-being?
If your aim is to minimize government expenditures on “those people,” wouldn’t it be in everyone’s best interest to empower individuals to become self-sufficient by providing them with the means to do so? Absolutely.
For more insights on this topic, check out our other blog posts on privacy and home insemination, and learn more about the journey of artificial insemination through reputable sources.
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Summary:
Universal basic income (UBI) has shown promising results, as evidenced by the Stockton experiment where participants received $500 a month with no conditions attached. This initiative highlighted the positive impact of predictable income on stress reduction and decision-making. With many children and families still lacking adequate financial support, expanding UBI at a federal level could substantially lift individuals out of poverty and provide them with necessary resources.