Insights, News

Investing in Families – This is a Significant Moment

Mar 31, 2021

Twin Cities

By: Simone Hardeman-Jones

Let this sink in – our child poverty rate is higher in the United States than in any other wealthy nation. Nearly 11 million children in the United States live in poverty further exacerbated by the COVID-19 pandemic. We also know that children of color are disproportionately represented among children who experience poverty.

The immediate impacts of growing up poor are numerous and well documented. In addition, studies show that children who grow up poor have a harder time escaping poverty as adults. Long-term consequences in education, health, and even brain development often follow a child well into adulthood, impacts that are even more profound for children of color. These impacts of child poverty are estimated to cost the nation between $800 billion and $1.1 trillion per year in terms of productivity, public safety and incarceration, health care expenditures, homelessness, and child maltreatment.

My career has been dedicated to advancing equity so that a zip code and/or the color of one’s skin does not determine the quality of one’s life. Prior to my role as executive director of GreenLight Fund Twin Cities, I spent years working as a policy advisor in the U.S. Senate – negotiating legislation, creating new policy ideas and fighting for policies and initiatives that would ensure equity and opportunity… and ultimately improve the lives of children, especially Black, brown and our most disadvantaged. After ten years of around-the-clock work and some of the biggest policy wins and toughest policy losses, I eventually grew exhausted of the politics that often get in the way of meaningful and impactful policy and doing what is right for kids. But something happened recently that renewed my faith in our country and gives me hope for the future.

On March 11, 2021, President Biden signed into law the American Rescue Plan, a $1.9 trillion stimulus bill with the goal of providing much-needed relief to American people who have been hit hard by the COVID-19 pandemic. Embedded in that bill, is a revolutionary shift in how our country and government has traditionally supported children and families, especially our most disadvantaged, and takes an historic step towards reducing child poverty. While currently only in place for a year, sources say the universal child benefit stands to cut child poverty in half and advocates are already strategizing around how to preserve it long-term. Almost all wealthy nations provide some form of child allowance to help with the costs of raising children. These allowances are part of these countries’ network of social policies and are effective at keeping children out of poverty. Sadly, for decades, our country has used a patchwork approach of government programs (Supplemental Nutrition Assistance Program, limited tax credits and others) in an effort to provide support to families living in poverty that many would say have not moved the poverty needle in any significant way. But, change is on the way.

The universal child benefit provides qualifying families with $3,600 for each child 5 and younger, and $3,000 for children 6 to 17. Imagine a family who earns $14,000, the average for the poorest 20% of American families, and has 3 children ages 4, 7 and 10. They will receive $9,600, substantially increasing their financial stability. Implementation of this profound policy in concert with other financial support provided through the American Rescue Plan will not only cut the child poverty rate in half but will cut the Black child poverty rate by even more than half and will also raise the total incomes of the bottom fifth of American families by 33 percent.

Average Benefit of Universal Child Benefit

In Minnesota, nearly 12% of all children live in poverty, with a disproportionately high number being children of color and American Indian children. In the Twin Cities, that number is even greater with 33% of children living in poverty in St. Paul and approximately 30% in Minneapolis. Across the state, the universal child benefit is estimated to lift 44,000 children above the poverty line and hopefully bring another 41,000 children closer to that mark. As a former Senate staffer, I can tell you that bold policy proposals like this rarely, if ever, become law. This is a significant moment.

At its core, GreenLight Fund seeks to eliminate poverty and increase economic mobility for the most underserved. While the universal child benefit does not address the myriad of systemic barriers that stand in the way for so many Black, brown and underserved, it inches us closer to what is known as universal basic income – a fixed monthly “no strings attached” income that begins to account for the centuries of disinvestment and discrimination Black communities and communities of color have faced, which many cities across the country are piloting including St. Paul, MN. GreenLight will continue to partner in each of the communities we’re in to address systemic barriers, create inclusive economic prosperity and open opportunities so families who are under-resourced are able to thrive. This work, in combination with the additional resources the American Rescue Plan puts in place, can accelerate families’ abilities to reach their goals.

I am filled with optimism and hope that such a significant new policy, coupled with the work GreenLight does to bring proven programs to address community-identified unmet needs and the incredible work already happening in our cities, will enable many thousands of children and their families to thrive.