Childhood Poverty
Remedied by Universal Basic Income.
The issue of childhood poverty has long plagued the US population. According to the US Census Supplemental Poverty Measure, for much of the last fifteen years, childhood poverty rates have hovered between 18 and 12.5%, except for a brief window between 2020 and 2022. The long-term impacts of childhood poverty often lead to lifetime poverty issues as children become adults. According to The Center for Law and Social Policy, the long-term effects of childhood poverty are:
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There is a five times increased likelihood of adult poverty compared to peers not raised in poverty.
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Reduced educational attainment (less than 80% of children who experience poverty complete high school.)
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Worse mental and physical health outcomes as adults (Twice as likely to report poor overall health and higher levels of psychological distress.)
From 2020 to 2022, the apparent difference in America's economic landscape was centered around the COVID-19 pandemic and the government’s response to this burden. According to the Pandemic Oversight reporting,(2) three rounds of stimulus checks went out on the following dates:
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March 2020, $1200 per income tax filer, $500 per child (CARES Act)
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December 2020, $600 per income tax filer, $600 per child (Consolidated Appropriations Act, 2021)
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March 2021, $1400 per income tax filer, $1400 per child (American Rescue Plan)
The reduced poverty rate during this period indicates that the Universal Income payments received went towards the welfare of families to lift children out of poverty. The City of Chicago and Cook County have both embarked on tests of Universal Basic Income Programs. The Chicago Resilient Communities Pilot, as recently published in a University of Chicago study, saw reduced barriers to accessing funds and an ability for participants to support themselves and their families flexibly(3).
It is recommended that a full-scale universal income program be applied for tax-filing families to receive unrestricted regular funding to help reduce childhood poverty and the cascading effects that follow children who grow up in impoverished conditions. By proactively responding to the childhood poverty epidemic, nearly one trillion dollars in economic benefit could be gleaned.
Causal Factors:
Income Inequality, Cost of Living
According to inequality.org, the income gap in America has been rapidly widening for over 30 years (4), beginning with the erosion of social safety net programs from the 1970s to today. This unfortunate reality is despite increased economic growth and continued efficiency gains brought about through automation and the rapid evolution of modern work. All of this has left those families at the lower end of the economic spectrum struggling through an era of modernization. As society has widened in terms of income inequalities, winners and losers, wages remain relatively flat compared to the cost of rent, food, and essentials. This means that more families falling in the bottom 20% of earners find themselves in impoverished conditions and increasingly shackled to the generational hardship caused by poverty.
Families found in this wage band are often stressed by any number of hardships not just limited to being single-parent households, challenged by illness or caregiving needs, headed by income earners with incomplete educational circumstances. With the reorganization of social services in the 80s and 90s, these families often need more services to reach their full potential.
Racial Inequities & Historically Disadvantaged Communities
There is a noted history of redlining and marginalization that faces the communities most impacted by poverty, childhood poverty specifically. In these communities, poverty is generational and is often a key predictor of outcomes when looking at the children who grow up in these neighborhoods. Unfortunately, what we see in the data is that there is a racial component to childhood poverty that can trace its roots back to the redlining policies of the twentieth century. Through the systematic implementation of housing discrimination and imminent domain policies, vibrant urban communities of color were segmented and displaced, leading to huge losses of wealth. These circumstances have left the communities hollowed-out versions of their once-vibrant selves and the residents without the necessary tools to restore them.
This history has left many of the generational members of this community without the resources to lift themselves out of poverty because of a lack of government intervention. This means that many of the children born into these communities will be born and raised in poverty. Statistically, those children who spend more than seven years in poverty have an increased rate of continuing in poverty as adults, continuing the cycle unless some sort of intervention is made.
Recommendations/Solutions:
In response to the listed long-term effects, the data published by the University of Chicago, and the reactive program cost analysis, a universal income program is suggested to be expanded to all families living below the federal poverty limit (FPL). These funds should be guaranteed to a level that lifts the family to the FPL and then tapers off for families until they reach a threshold of 150% of the FPL. This rate would be $500 per month or $6000 annually per child.
As seen in the Chicago Guaranteed Income program reporting, when families receive these funds, they apply that income to their families' benefit. This funding subsequently combats childhood poverty and reduces its potential negative impacts.
If handled at the federal level, funding should be reappropriated from other line items or taken in through a tax increase on high earners and large corporate entities. After taxes are calculated and income is verified, these funds can be disbursed directly to families. Federal social service funding could be reallocated to fund this program in a direct payment or holistic service network model if implemented at the state or local level.
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Outcome:
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The intended outcome of this policy is to lift millions of children out of poverty and provide families the opportunity to create a better outcome for their children through unrestricted support. This is demonstrated by the preliminary success of the city of Chicago’s resilient communities pilot and the census data captured during the direct stimulus given to children and families. It is believed that, in most cases, these funds will be used to reduce the burden on families and begin to mitigate the harms caused by financial stress and lack of resources. Some of the expected ripple effects of this program would be:
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Reduced domestic/family violence
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Stress and anxiety reduction, greater health access
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Economic stimulus/community revitalization
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Increased housing security
This program is meant to support families and, by extension, the communities and networks connected to these families. Over time, these supports are expected to allow historically underserved communities to heal and eventually exit a stage of needing social safety nets and reach sustainability.
Beyond the direct support of families, this proactive response also helps to mitigate the ongoing costs of long-term poverty impacts such as crime, health care, lost earnings, and criminal justice. The Peter G. Peterson Foundation reported that these issues create an economic drag of over 1 trillion dollars. The entire cost of this program for all children in poverty would be roughly 57 billion dollars a year, with a net savings of over 973 billion dollars per year as poverty is lifted.