The Power of Unrestricted Cash: Advocates Call for Permanent Policy to Support Low-Income Families

Programs like the child tax credit and guaranteed income put cash directly into the hands of people who need it most.

A family from the first Magnolia Mother’s Trust cohort, the first guaranteed income program that targets extremely low-income families headed by a Black female living in affordable housing in the U.S. Now in its third year, MMT provides low-income, Black mothers in Jackson, Miss., $1,000 cash on a monthly basis, no strings attached, for 12 months. (Sarah Stripp / Springboard to Opportunities)

While the pandemic didn’t start economic inequalities in the U.S., it’s certainly responsible for exacerbating them, including race and gender disparities in unemployment, working conditions and poverty levels. Almost two-thirds of Americans have been living paycheck to paycheck during the pandemic, and women have been forced to bear the brunt of additional challenges like child care and other domestic work that limit their ability to work outside the home.

In order to help Americans recover from the pandemic’s economic fallout, feminists are calling for new federal policies that would help working moms, low-income women and women of color in particular. By offering the flexibility and efficiency that come with unrestricted cash, policies like the child tax credit and guaranteed income seek to create an economy that works for everyone, including marginalized communities.

President Biden has already taken an important step towards making a more equitable economy a reality: His American Rescue Plan includes a child tax credit (CTC) that now provides monthly payments of up to $250 per child ages 6-17 and $300 per child under 6 for the 88 percent of families with kids that qualify. Already, struggling families say these payments have been life-changing.

“To get the child tax credit payments that started coming last month has been a huge help,” wrote one mom, I’esha (last name withheld), in an essay for Ms. “I was able to use the first payment in July to get prepared and buy my children their school things—there’s so much to get. The clothes, the shoes, the school supplies. I swear that list gets longer every year.”

However, Biden’s expansion of the CTC is not permanent (though a majority of voters want it to continue): The monthly payments started in July and will end in December, and parents will get the other half of their annual amount when they file their 2021 taxes. In response, moms across the country are calling for President Biden to push for a more permanent policy to support all low-income families. 

“If I could talk to President Biden, I would tell him that he should make the child tax credit permanent, because so many people are still unemployed and the pandemic is not over,” wrote I’esha. “And people need help even without a pandemic going on.”

(Art by Brandi Phipps)

Following a similar strategy, economic justice organizations like the Magnolia Mother’s Trust (MMT) say another policy would help low-income mothers, particularly women of color: guaranteed income. Guaranteed income involves payments directed to specific groups, like women living in poverty, in order to address economic inequities. By focusing on marginalized communities, guaranteed income can help address economic issues caused by systemic racism and sexism, and can give struggling Americans a way to meet their basic needs.

MMT is one example of how federal economic policies could have a huge impact on marginalized people. By providing Black mothers living in extreme poverty $1,000 per month for a year, MMT demonstrates that unrestricted financial benefits can have extremely powerful effects. For example:

  • The percentage of MMT participants able to pay all their bills without additional support soared from 37 percent to 80 percent during the program.
  • After receiving guaranteed payments for a year, 85 percent of the moms had completed their high school education, compared to 63 percent at the beginning of the program.
  • MMT mothers were 20 percent more likely to have children performing at or above grade level, and were 27 percent more likely to seek needed medical care than other moms not receiving guaranteed income.  

For many of the moms, the combination of guaranteed income and the CTC gave them the ability to support their families and start working towards their long-term goals—even during periods of unemployment or financial instability caused by the COVID-19 pandemic.

 For I’esha,

“Being a part of Magnolia Mother’s Trust has been so important in getting me through this year. Since I haven’t had an income since January, before the program started in April, I was living off my savings and that was stressful. Now that I have the guaranteed income money coming in, I don’t have to worry about whether I can afford bills this month or be concerned about affording household supplies. I would love to see a program like the Magnolia Mother’s Trust offered to more people, too. The government should want to pitch in a little more to help with programs like guaranteed income to help more families.”

Ebony (left) and Chephirah (right), two mothers enrolled in the Magnolia Mother’s Trust, which each year provides more than 100 Black mothers living in extreme poverty in Jackson, Miss., a guaranteed income of $1,000 a month for a year. (Art by Brandi Phipps)

The CTC and guaranteed income put cash directly into the hands of people who need it most. Having “no strings attached” money allows women to make the best decisions for their families, and gives them the freedom to invest in long-term goals.

One mom, Chephirah, reflects,

“[MMT] has really helped me in preparing for [my daughter’s] school. The money has also helped me cover my monthly bills, and get caught up on some old debts. It also helps to pay for things like my daughter’s school books. And then she wanted to have a dinner and a trip down to New Orleans for her birthday, and I was able to do both because of that help of the program and my family. I think that’s probably the first time we’ve been able to take a trip as a family in at least seven years. It’s been a long, long time since we had a little vacation.”

Too often, economic policy relies on faulty assumptions that low-income people do not know how to effectively manage money. In contrast, the moms receiving guaranteed income through MMT have proven that they know how to save, invest and spend their money to best support their families. 

“I do a good job at saving,” wrote MMT mom Sabrina. “I learned to save. I do couponing, and I just put money to the side and don’t touch it. I just think about, ‘What is light, what is gas, what is rent, what about an emergency?’”

And another mom, Ebony, says guaranteed income has allowed her to start her own beauty salon business:

“I’ve been able to invest probably $11,000 into my salon since I started receiving the money. New items to sell, putting money into making it look nicer, now we have this beautiful pedicure area in the back. So I used the Magnolia Mother’s Trust money to make money, and I’ve helped some other moms in the program from my year do the same—one woman started a clothing boutique. And I have other dreams—one day you’re going to see my name in Essence. Maybe as a celebrity stylist, or because I started a school for entrepreneurs.”

For Tia, guaranteed income was life-changing because it alleviated much of her financial stress. 

“I just wasn’t so stressed out about everything, because it’s different when you have that little extra help. My rent went up, and that was okay, I could handle it. My car broke down, I was able to get it fixed right away. Things would happen, but I could take care of them. Before, I would’ve had to wait at least until the next pay period to take my car in. It was always just living paycheck to paycheck.”

“Then there’s just knowing that if your kids get sick, it’s going to be okay. That if I needed to, I could take time off to care for my child without having to worry that my paycheck would be short. So that felt really, really good. Normally, I’d have to move something around to cover taking time off. But my baby got sick and I was able to say, “Okay, I have some money in the bank, it’s going to be fine.” To not have that stress, it was wonderful. Won-der-ful.”


Policies like the CTC and guaranteed income place trust in low-income people, and allow them to make the best financial decisions for their specific circumstances.

Existing welfare policies too often take an overly paternalistic approach that requires low-income women to use benefits in specific ways that may not be the most effective strategy for them. In Mississippi, for example, Supplemental Nutrition Assistance Program (SNAP) benefits require everyone ages 16–60 capable of work to accept any offer of suitable work, and also restricts people from using their benefits to order groceries online. These barriers make it harder for people without transportation or child care to effectively utilize their benefits, and leave women vulnerable to abusive workplaces or employers. 

“Let’s give people money—not vouchers, not subsidies—and not have people prove to us that they are poor enough for support,” said Aisha Nyandoro, CEO of Springboard to Opportunities and its MMT. “Imagine having to go back to prove that you are poor enough. What would that do to you psychologically? What would that do to your self-worth?”

That’s why programs like MMT, which center the voices of those most affected, instead of treating guaranteed income as simply an academic question, are so valuable. 

Based on the experiences of these moms, a permanent CTC and guaranteed income would give low-income Black mothers more opportunities to provide for their children without financial stress, and invest in their personal goals. By getting cash into the hands of people who need it, these policies would make a huge difference for struggling Americans, and would be a step towards creating an economic system that values the lived experiences and unique perspectives of marginalized people.

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Katie Fleischer (she/they) is a Ms. editorial assistant working on the Front and Center series and Keeping Score.