Harish I. Patel is executive director of Economic Security for Illinois and co-led the Chicago Resilient Families Task Force. Ameya Pawar is a fellow with the Open Society Foundations and the Economic Security Project. He co-chaired the task force and served two terms as alderman of the 47th ward. This originally appeared in the May 5th edition of Crain’s Chicago Business.
Ameya Pawar will be our guest this Friday, May 22nd on a live broadcast of Hitting Left with the Klonsky Brothers. 105.5fm in Chicago and streaming at http://www.lumpenradio.com
Then came the COVID-19 pandemic.
To deal with the economic fallout from the pandemic, Congress took action in late-March and passed the CARES Act. The act authorizes trillions in no-strings-attached backstops for the credit markets. Last we checked, there was no outcry from free-market activists about the moral hazard or corporate socialism. A recent study showed that 80% of the benefits of the CARES Act went to millionaires. Even dollars meant for mom and pop businesses disproportionately flowed to large businesses like Shake Shack and Potbelly Sandwich Works. Both promised to return the funds following public outcry. Still, minority and immigrant small business owners were largely left out.
And we have reason to be optimistic. Just last month, House Speaker Nancy Pelosi told reporters that regular, direct cash payments should be a part of the solution to the economic crises caused by the COVID-19 pandemic. Pelosi’s statement is a major win for those advocating for cash as a solution to poverty. This is a tectonic shift in thinking and narrative, but we need more voices to demand cash as part of the COVID response and recovery from every level of government.
Some members of Congress are proposing a basic income of $2,000 per month for every American, and we strongly support this proposal.
We don’t need any more studies or taskforces to trust people with cash. Our report detailed how cash provides dignity, flexibility, and agency. We can strengthen millions of households with a basic income. If a report isn’t convincing, then look to the results from the Stockton SEED demonstration led by Mayor Michael Tubbs. Or Aisha Nyandoro’s Magnolia Mother’s Trust in Jackson, MS. Tubbs, and Nyandoro have been piloting cash transfer programs in their communities. The results are indisputable. When people have unconditional cash, they pay their bills and take care of their families. Two centuries of myths about the working poor and their deservedness have been busted.
We are over ten weeks into this economic crisis and economists are predicting prolonged economic contraction with unemployment numbers to surpass 25%. People have to pay their rent and put food on the table. A one-time $1200 check helped, but bills are due again in May. They will be again in June. In July. And beyond. The situation is dire.
We don’t need more bailouts for big oil and hand-outs for banks and hedge funds. We do need a hand-up for the American people.
Pelosi’s comments helped shift the narrative on Guaranteed Minimum Income and cash transfers. Now is the time to move from narrative shifts to policy change. It is time to send every American a regular, cash payment on a monthly basis for as long as this crisis lasts.