Cash will get us through
The coronavirus pandemic is shining a spotlight on what most already know: There are giant gaps in our economic system, and disasters aren’t status levelers. This pandemic is being exacerbated by deeply embedded economic inequities.
We know that only 4 in 10 people have $400 for an emergency and a large percentage of Americans live check to check. With new social distancing measures in place, millions of people will be out of work for extended periods. For these reasons we are demanding bold solutions from our city, state and federal government to stabilize communities. We must act fast and give our friends and neighbors what they really need now: cash.
Cash transfers—a measure the Trump administration indicated Tuesday it would pursue— aren’t a new idea. Each year, more than 22 million American families and individuals receive the earned income tax credit, a cash rebate tied to employment. In 2008, President George W. Bush’s Economic Stimulus Act cut $152 billion in checks to everyday Americans to stimulate consumer spending.
Over the years academics have conducted nearly 200 research studies on these efforts, and all draw the same conclusion: Cash transfers are cost-effective and have the strongest track record to reduce vulnerability.
A recent report by The New York Times shows the serious implications of the coronavirus on industry. We’ve seen a few employers step up and say they will pay their hourly workers, as the owners of the Chicago Blackhawks and Bulls are doing for workers at the United Center. This is a welcome start, and more businesses should step up in similar ways. The government needs to do the same. Simply calling for the private sector to do more will not cut it this time.
Food banks, social service providers and churches will continue to deliver services and serve as our front lines. But placing the bulk of responsibility on service providers increases the risks for their staff members and volunteers. A technology-backed cash transfer program can get cash safely to those who have access and serve as a triage function for service providers.
Every family situation is unique, and now is not the time to fall back on a funding orthodoxy that prioritizes programs over individual agency. A family that is staring into a bare pantry, an overdrawn bank account or the prospect of taking care of a loved one knows exactly what they need to do now to be safe two weeks from now. Through cash transfers we can provide people the agency and dignity they deserve, while saving lives.
Let’s not look back and realize we could have done more to support one another.
Ebony Scott is the Chicago director of the Family Independence Initiative. Ameya Pawar is a senior fellow with the Economic Security Project and a Leadership in Government Fellow with the Open Society Foundations.