Forty percent of Connecticut residents don’t earn enough to cover their basic needs. Advocates say state-supported “guaranteed income” could help.
WSHU’s Ebong Udoma spoke with CT Mirror’s Erica Phillips to discuss her article, “Support for ‘guaranteed income’ is growing. Is public funding next?” as part of the collaborative podcast Long Story Short. You can read her story here.
WSHU: Erica, guaranteed income became a national issue in the Democratic presidential primaries four years ago, and a major focus of much of the COVID-era American Rescue Plan Act spending. What exactly is it?
EP: Well, it’s really simple. The concept is just to give people money. So over 100 pilot programs have tested this out in different communities, in different cities, among different populations in the U.S. and even more abroad. One example, there’s one right here in Connecticut, an organization called the Bridge Project, which has programs here and in a couple of other places, that give expecting mothers and pregnant people a cash stipend every month, leading up to the birth, and then for a number of months, I think it’s roughly two years after, and the amount changes a little bit over time. But basically it’s just no strings attached cash. And if you’re a mother with a tiny child, the assumption of these programs is you’ll know how to spend it. You know what you need to spend it on, and so that’s the concept, just give people money.
WSHU: Now it’s been operated in other parts of the country. As a matter of fact, the very first program was in Mississippi, I believe, and then in Stockton, California. Have they done studies on this, and what’s the impact?
EP: Yeah, Stockton is one that I think a lot of people have heard about, because it was the first one that the city said, we’re going to try this out as a city. And it picked a number of families and made these cash payments every month and studied the impact. The participants in that program saw improvements in their health, their mental health, and sort of really fascinatingly, out of that study, it showed that they were more likely by the end of the program to be employed. This is sort of counterintuitive to what you might think, which is, if you give people money, you know, they’re not going to want to work. Well, actually, the result of this program was that it gave them the ability to get training, or the time to do whatever they needed to do, to set themselves up to be able to work, or what have you. So there was kind of a fascinating result out of that.
Other studies have shown similarly, you know, improved health outcomes. One of the other questions that a lot of people have about these programs is, are people going to spend the money responsibly? A lot of the studies that have been done on these pilot programs have shown that the money was spent really on essentials, food, rent, and transportation. So to a large extent, this isn’t cash that’s just going to entertainment or what have you.
WSHU: The COVID-era programs also had a component of cash transfers. Some of the red states pushed against that. They didn’t want to do that, but states like Connecticut did. Could you just tell us how it worked in Connecticut and what we’re looking at going forward?
EP: Yeah, so, during COVID, a couple of things were going on. One was, there was the federal child tax credit that went into effect, which basically was, you know, depending on the number of children in the family, you got cash infusion. Studies have shown that it reduced childhood poverty in the United States by almost half. So, you know, again, something to point to; you give people money, and kids are better off. But in Connecticut, there’s an organization called 4-CT that launched a number of programs during COVID and the way that program works is they put cash on a debit card and give it to people. It’s almost a little bit too many programs to sort of list, because they’ve done this in a lot of different contexts. Often they work with a nonprofit organization. And you know, folks who are seeking services from that organization may also just get a debit card from 4-CT that they can use for whatever they need to use it for.
But one of the specific ones I can talk about is they worked with folks who have been incarcerated, and they’re now reentering, and just giving a bit of extra cash to folks in that position. You know, there’s so many kinds of things when, when you’re going through that process that you have to keep on top of, you know, getting an ID, getting set up with all the various social programs, getting a place to live. And so the idea was that the cash led to some easing of some of those responsibilities, while everything, all those many things that are going on, and that one has, has shown some success as well.
WSHU: Now the COVID-era programs have pretty much run out. Is that why there’s now talk about having the state put more public money into these types of programs?
EP: Yeah, yeah, exactly. So the federal child tax credit, obviously, was a public program, but largely, these pilot programs are funded by philanthropy, and that’s the case because they’re trying to prove the concept. They’re still in the phase of trying to prove that this works. And so there are philanthropically funded programs. They do a study, they show the results. And the reason they’re doing all that is because they’re hoping that public money will soon come to this type of effort. The federal child tax credit, obviously, has run out, but in the state of Connecticut, which also had a small child tax credit during COVID, there’s a huge discussion, and will be a huge discussion this year at the legislature, over whether Connecticut reinstates that state’s Child Tax Credit. And it’s, you know, that’s a form of a direct cash program.
A lot of people may quibble with the term guaranteed income, but it’s a form of giving cash directly to families that have kids. And we’ll just have to see how that conversation goes during this session. The other piece I want to mention is that, you know, the argument in favor of it is that it’s a relatively simple thing to administer because it’s just a tax credit. You don’t have to start a whole new department to figure out people’s eligibility and administer this. And that is the way you would with a lot of safety net programs; a tax credit is a little bit simpler and more straightforward.