Virginia is a retired state employee in Stockton, California, who sells Avon cosmetics. The pandemic shut down her Avon business, costing her income she relies on. Of course, her story is common: In the past month, 26.5 million Americans filed for unemployment, and even before this crisis, four in 10 Americans had no financial cushion.
But Virginia is getting by for now because she currently receives $500 a month from a guaranteed income demonstration project in the city. These payments allow Virginia to buy medicine and food for her kids and grandkids. It is a powerful example of how cash payments can help stabilize families before and during a crisis.
Government programs proposed as an emergency response, like unemployment insurance, SNAP and Medicaid, are also essential to helping families in need. But they’re not enough. Americans also need direct cash payments to make it through and stay out of poverty.
There aren’t enough housing vouchers in the world to address the current crisis—there aren’t enough even in normal times. On top of that, many essential safety net programs, especially those implemented at the state level, are designed to omit or discourage those deemed undeserving of support: the poorest families, people with disabilities, those who can’t work and immigrants, among others.
No matter how many programs we have, too many families still struggle to make ends meet. Cash gives people the tools to solve their own problems. There is no program for fixing your transmission so you can get to your job. There is no program for “my kid needs shoes this month, and my mom needs medicine next month.”
Putting money in people’s wallets does the most good for the most people in these uncertain times, and it builds long-term economic security. We must demand that Washington do more to help Americans directly.
Recently, direct cash payments have received a popularity boost, thanks in large part to Andrew Yang, who ran his presidential campaign on the promise of $1,000 monthly checks for all. For his platform, Yang borrowed from Martin Luther King Jr., and from the success of demonstration projects led by Mayor Michael Tubbs in Stockton, California, and Aisha Nyandoro in Jackson, Mississippi. Progressive political leaders pushing for guaranteed income policies include Bernie Sanders, Sherrod Brown, Kamala Harris, Cory Booker, Ro Khanna, Rashida Tlaib and Gwen Moore.
And Congress recently authorized $1,200 payments, no strings attached, to low- and middle-income Americans, including for the first time ever those with no income—a temporary income floor in America. While the payments are too small and leave millions out, they signal an important shift in our racialized and gendered notions of deservedness.
These $1,200 payments were critically needed: Early research shows people spending the money on food, medicine and gas. Our own research from demonstration projects in California and Mississippi has shown similar spending on basic needs.
Additional payments complement expanded unemployment benefits: Gig and part-time workers are not eligible for state unemployment benefits. Millions who lose their jobs will lose their health care as well. Some cannot access benefits at all as state hotlines are overwhelmed. Similarly, employer subsidies leave many people out, which is why leaders like Representatives Pramila Jayapal and Alexandria Ocasio-Cortez support both subsidies and direct financial support.
Now, Congress must double down on direct payments. While many industries got bailed out for a year, individuals got bailed out for a month or two. Congress must fix this in the next relief package by making cash payments bigger, regular and lasting: $2,000 a month until the economy recovers. Congress should also include undocumented immigrants and college students.
With nearly all Americans facing economic insecurity, this is the watershed moment for using cash to create an income floor for individuals. The need couldn’t be more abundant, nor the solution more clear. And public support for an income floor is near universal: A poll earlier this month showed that nearly 90 percent of all voters, Democrats and Republicans, support direct payments.
If we were wise, we would continue direct payments to those in need after this recession to help Americans find a strong financial footing and begin to close the racial wealth gap. The goal isn’t just getting back to the pre-crisis status quo. The massive inequality that existed before the crisis is contributing to poorer Americans and people of color dying from coronavirus at higher rates.
We must seize this moment to fix a system that siphons wealth to the top at the cost of leaving the poor and middle class one emergency away from crisis. By putting money in people’s wallets alongside safety net programs, we can ensure that when the next crisis inevitably arrives, families and the economy are more resilient to its effects.