The Differences Between UBI and Guaranteed Income Reveal the Importance of Equity

Many anti-poverty groups agree that strategically targeted guaranteed income, not universal basic income, is the best path forward to ending poverty, advancing gender and racial equity and supporting low-income Americans.

That’s why guaranteed income programs like the Magnolia Mother’s Trust (MMT) focus on low-income Black women to address the deeply entrenched economic inequities caused by systemic racism and sexism. MMT moms have used their monthly payments to go back to school, find stable housing, escape predatory cycles of debt and start their own businesses.

Guaranteed Income As a Path Towards Gender and Racial Justice

Guaranteed income is an essential strategy for centering Black women and their families. It involves consistent payments directed to specific groups, like Black women living in poverty, in order to address economic inequities.

It’s one component of the Black Women Best framework, which has officially entered mainstream political awareness. And it’s a particularly salient time to talk economic solutions: Over two-thirds of voters say the economy is their top concern ahead of the November midterm elections.

Guaranteed Income Doesn’t Just Help Low-Income Parents—It Also Improves Their Children’s Brain Development

New research suggests receiving monthly payments—like guaranteed income and the child tax credit—contributes to greater development of cognitive processing skills and increased memory in kids.

This experiment concludes what low-income people have always known—that poverty and the stress associated with it has a negative impact on children’s health. Providing unrestricted monthly payments—instead of complex welfare systems that require parents to jump through confusing hoops—will benefit low-income families across the U.S.

The Child Tax Credit Proved Unrestricted Cash Keeps Families Out of Poverty. Without It, Low-Income Families Are Struggling

As the childhood poverty rate rises—from 12 percent in December to 17 percent in January—Black and Latino families are being hit the hardest by the end of the child tax credit payments. Experts estimate that the poverty rate for Black and Latino children will jump to over 25 percent. One reason the CTC was so successful in reducing poverty rates is because it puts unrestricted cash directly into the hands of people who need it most. Over 90 percent of low-income families used the CTC to afford basic needs—food, clothing, school supplies, utilities and rent.

“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,” revealed one low-income mom, I’esha. “And people need help even without a pandemic going on.”

Build Back Better Is in Peril. Low-income Families Can’t Afford To Lose It

As families hope Democratic leadership will find a different path to pass Build Back Better policies like childcare or paid leave, another revolutionary policy is just beginning to enter mainstream awareness: guaranteed income.

Guaranteed income involves regular payments directed to specific marginalized groups, as a way to address economic inequities caused by systemic racism and sexism. Economic justice organizations like the Magnolia Mother’s Trust argue that a federal guaranteed income program would not just help low-income families pay their bills, but also reduce financial stress and set their families up for long-term success. 

Investing in Social Infrastructure Provides a Recovery Path for All—But Especially Low-Income Families

Too often, policies that are perceived to be “feminine” or unequally benefiting women are dismissed in favor of more “serious” policies. The two infrastructure bills working their way through Congress are no exception.

In reality, policies like the child tax credit, paid family leave and guaranteed income result in better outcomes for everyone.

Stimulus Payments and the Child Tax Credit Are Transforming U.S. Families—What Happens When They End?

Neither the COVID-era stimulus payments nor the child tax credit were designed to be permanent solutions—but if they were, they would especially help working moms, low-income women and women of color.

The Magnolia Mother’s Trust puts this into action, demonstrating that giving women an economic safety net leads to families escaping poverty and having the ability to set themselves and their families up for success.