The American Dream is based on the promise of financial and economic security, but we know that promise isn’t an option for many of our neighbors because of extractive and racist policies that have disproportionately harmed BIPOC communities. The financial insecurity our systems have produced is not a new challenge. Even prior to the pandemic, the liquid asset poverty rate—whether a family has enough in savings to live at the poverty level for three months if there is a disruption in income was 34% for White households and a staggering 60% for households of color in Oregon. Moreover, one third of U.S. families had no savings at all, and four in 10 adults would either not be able to cover an unexpected expense of $400 or would cover it by selling something or borrowing money. This was our “normal” before COVID, not because families were not working or were not working hard enough, but because of low wages, rising costs of living and rampant institutional, structural and systemic racism in all aspects of U.S. society. COVID-19 has only further exposed the economic fragility Oregonians experience and has disproportionately impacted BIPOC communities. Income and wealth inequality, which have long plagued our systems, continue to grow because of the lack of proven solutions that work. Given the multiple pandemics of racism and COVID-19, we need the political and societal will to do what’s necessary to tackle these problems.
Cash is one of the most direct and effective ways to provide financial stability to those who need it most. Cash offers the dignity and self-determination that recognizes that all too often, our programs or services offered are one-size-fits-all, and they are antiquated and rooted in distrust and racism. Years of research show that when given unconditional cash payments, people are able to exit poverty and create financial stability for themselves and their families. Unconditional cash payments work because they expand choice and cash supports individuals and families by allowing them to flexibility and freedom to use the money where they see fit. Research has shown the short-term impacts of providing cash directly can help to reduce hunger, increase academic achievement and reduce poverty as well as longer term impacts of supporting asset accumulation, increased health, and social mobility.
A new analysis of Census Bureau surveys argues that the two latest rounds of stimulus checks, a form of direct cash payments, in the past six months totaling $2000 a person, significantly improved Americans’ ability to buy food, pay household bills and reduced anxiety and depression. The data also shows that the largest benefits going to the poorest households and those with children.
As we begin the transition to reopening and rebuilding out of the COVID-19 pandemic, our policy solutions and priorities should be targeted to support those most impacted. We need to challenge ourselves to rebuild responsive and efficient programs and policies that match the unstable nature of the economy and the volatility that households experience financially from month to month. We need solutions like unconditional cash payments that transfer cash to households living in poverty without stipulations or conditions. This concept works because it helps reduce barriers to the resource and should be used as a framework to support our policy solutions.
We should not consider a return to “normal”, but instead envision a different future, with different possibilities.