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AUSTIN (Texas) — Tommy Andrade had grown tired of doing monotonous jobs by his mid-20s. He realized that he needed more than just a high school diploma to provide for his family, especially with a young child. Andrade was interested in the Austin Community College (ACC) advanced manufacturing program.
Andrade figured that some of the jobs for which graduates were trained would have salaries in the six-figure range, enough to provide financial security even in Austin, where living costs were rising fast.
Andrade had to first take a pay cut. The 14-week program required Andrade to complete an internship at $17 an hour. This was less than what he earned in his previous jobs, as a bookkeeper and salesman. Andrade was worried that he would not be able pay rent, bills, or after-school care for his son.
Unexpectedly, ACC announced some good news. It was launching a pilot program to guarantee student parents income. Program officials asked him to sign up. Participants would be paid $500 per month for two years, subject to some conditions. They had to enroll in nine semester credits and attend monthly meetings.
Andrade was excited by the additional income. He said that although five hundred dollars is not enough to live on, it was enough to make a significant difference. “I can take some risks because I have some flexibility,” he said. Andrade, now 29, lives in Seattle with his partner, and son. He recently accepted a contract job at a large tech company.
Andrade’s story highlights the potential for guaranteed-income programs. Andrew Yang, a former presidential candidate, placed these programs on the national radar for 2020. He called for a monthly income to all U.S. citizens. This idea gained popularity after the Covid-19 pandemic. It was popularized by state and local governments as well as philanthropists, colleges, and some universities like ACC. Since 2020, more than 48 guaranteed income programs were established in cities all over the country. This approach is also promising as a long-term strategy to combat poverty, especially for families with young kids, according to researchers and advocates.
Research is showing that cash transfer programs have a significant impact on children as they provide stability for their families during the child’s formative years. This could be due to parental stress being reduced. Research shows that children who experience emotional distress from their parents can also suffer. Exposure to negative childhood experiences, such as food insecurity or housing instability, can cause trauma. This can even lead to brain changes that make it less likely for young children to cope. However, this harm can be minimized if the basic needs of children are met and parents have financial security.
Michael Tubbs, a former mayor in Stockton, California and father of two, said that “that’s what it is about,” and added that he was a champion for the idea and founded Mayors for a Guaranteed income, a network which includes mayors. He said that his children depend on him for their security and sustenance. When I don’t worry about the future, when I’m not stressed or anxious, I can do this.
Stockton’s Guaranteed Income Program, for instance, found that parents were more involved in their children’s lives and were better able provide for them. An analysis of Chicago’s low-income families during the pandemic revealed that parents who had some income after losing their job were more likely than those who had lost it to have positive interactions with their children. Parents who lost their income were more likely lose their temper and yell at their children.
According to the Baby’s first years project, which offered $333 per month to low-income mothers in four U.S. towns, financial support can lead to brain activity changes that are associated with learning and thinking. A recent study showed that children whose parents received federal tax credits after the birth of their first child did better at school and earned more as adults.
Andrew Barr, co-author of the study and a professor at Texas A&M University, said that “at least for low-income individuals, the period following childbirth seems to be an period of low financial resources, and high stress.” He said that having a steady income “allows the family stay on a better track.”
Critics have suggested that such programs might encourage recipients to quit working or spend their money on drugs or alcohol, but the data strongly refutes this. Mayor Melvin Carter, St. Paul, Minnesota, said that there are many racist and classist stereotypes about “What those people will do with money.” He launched a guaranteed income program in 2020. “When low-income people have money, they can pay for groceries and rent.
A family allowance, which is a guaranteed income, is a common feature in many European countries. For example, Norway, Denmark, and Sweden all provide funds to parents at regular intervals to assist with the costs of raising children. Canada provides money to low-income families for every child below the age of 6.
America temporarily experimented with providing families with a guaranteed income during the pandemic. This was in the form an expanded child credit. Beginning in spring 2021 families with incomes below $600 received tax refunds every month, up to $300 for each child under 6. Positive effects were reported by recipients: They saw improved nutrition, a decreased reliance on credit cards, and increased investments in education such as tutoring and child care.
The poverty rates of Hispanic and Black families experienced the greatest declines. The country’s monthly child poverty rate fell by almost a third from 15.8 to 11.9 percent.
Many parents find themselves again struggling to make ends fit after the aid ended. The U.S. is becoming an expensive place to raise children, despite the pandemic. Family budgets have been strained by rising inflation, high gas prices, and exorbitant housing prices. Although child care costs rose by 41 percent during the pandemic it has remained a significant part of families’ income for many years. While the cost of raising children is steadily increasing, America’s federal minimum wages has stagnated at $7.25 an hour since 2009. It reached its lowest level in 66 years this year.
Advocates for guaranteed income believe such programs are essential. Multiple financial barriers and stressors can often be faced by families. Carter of St. Paul said that even a small amount of money can unlock a whole new world of economic potential for families.
Andrea Coleman, 41, is a single mother of three children in St. Paul. She said that the $500 she received each month through the city’s program after the birth of her youngest child was a great comfort. She was able to purchase winter coats, shoes, and Christmas gifts for her children with the money she received. She had to have her car’s brakes repaired and her oil changed. This was crucial for her job as a private nursing nurse.
Coleman was also able postpone her return to work in order to bond with her infant girl, something she had missed with her middle child. She said, “I’m thankful.” She had previously been suffering from depression when she began the program. However, after several months of having more income, the depression started to disappear. Coleman explained that she was simply unable to provide for her family. Coleman said that she was able “keep stress levels at a minimum” with the extra income.
Experts believe that small-scale pilots such as the one in St. Paul can set the stage for federal and state action by normalizing universal guaranteed income and providing data about the benefits of such programs.
“The way good public policy developed in the United States is that the states adopted strong policies and then the federal government adopted them,” stated Jeremy Rosen, director for economic justice at Shriver Center on Poverty Law. “I think that’s what will happen here.”
Some states have already made investments in these programs. California provided $35 million for guaranteed income pilot programs last year. This was over five years. Alaska has a guarantee income program. It is funded with oil, gas, and mines revenue. Since 1980, Alaskans have received an average of $1600 per year. This program, along with other benefits, has helped to reduce extreme poverty and ensured that disadvantaged youth stayed in school.
Andrade, a parent and student from Austin, used the monthly income he received through Austin Community College for car and insurance payments, as well as tutoring, clothes, and after-school activities. He didn’t have to work odd jobs to make ends met; the extra money could be used to help his son and his studies.
He was able to afford to take chances, such as accepting a lower pay in the short-term with the assurance that he would eventually earn more. His leap of faith paid off in May.
He was only 15 credits away from graduating with an associate degree in engineering technology construction management. However, he was offered a position at a Seattle-based firm that designs vehicle crash test systems. He and his partner moved more than 2,100 miles north to find a 2 bedroom apartment in West Seattle. To finish his degree, Andrade enrolled online at ACC. He was offered a better job as a contractor, earning twice the amount he earned before he started at ACC.
The ACC guaranteed income program was created to help students parents and to encourage upward mobility. The guaranteed income program, which is a partnership between ACC, United Way for Greater Austin and the Dallas Fed, is funded by the Annie E. Casey Foundation and federal pandemic relief funds from the City of Austin. Becca Bice is the director of Family Pathways at United Way for Greater Austin. The program supports student parents while they pursue a degree. They just have a greater load than other students.
Bice stated that participants have used the stipend to cover unexpected expenses such as car repairs, medical emergencies, and other unplanned costs that could sometimes force them to drop out. Students used the stipend to pay rent or child care and to reduce their work hours to be able to focus on their studies and spend more time with their children. Officials from the program are monitoring outcomes to determine if money has an effect on college persistence and graduation rates. They also collect informal data about participant stress levels, college experience, and overall college experience.
Although guaranteed income programs such as ACC’s are growing and providing benefits to individual participants, their scope remains limited. Cities often receive thousands of applications to fill a few hundred spots or less. Participants can face challenges: Having an additional income can make it difficult for families to receive other public support such as food stamps or child care assistance. St. Paul’s guaranteed-income program is also very expensive to sustain and support. A second round will start in this year. It will support 333 residents for two consecutive years at $5 million. Funding for the program comes from a combination of federal coronavirus funds as well as private donations.
“Five hundred dollars isn’t enough to live on, but it’s enough for me to make a difference.” I can take some risks because I have some flexibility.”
Experts say that there is a better, more permanent way to boost families’ income. This is because of the many challenges involved in running these programs. This could be achieved by expanding existing programs like the child tax credit. President Joe Biden stated that he supports this as part of a national strategy for reducing child poverty and hunger. The money would not cause other benefits to be lost if it was viewed as tax policy and not extra income.
Andrade doesn’t view such programs as a handout. He sees them more as a way of giving people who are starting from scratch a temporary boost. Andrade stated that they have the chance now and don’t need to struggle. “In the end, if my son is in a better place, I’ve succeeded.”
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