From the Just Futures Fund –
We can make sure that people have the financial resilience to weather disasters in the future.
The Just Futures Fund brings together two big ideas: universal basic income, under which every adult and child would receive a monthly cash transfer to cover their basic needs; and Kids’ Futures Accounts, which are trust accounts that build wealth for children in asset-poor families.
Under a universal basic income system, every adult 18 and older would receive $1,000 in cash every month, regardless of employment status or other income. Parents would also receive $250 per month for each child. Kids’ Futures Accounts would provide every child with an interest-accruing trust account in their name, containing $1,000 at birth.
Every year, more money would be deposited into the child’s account based on the wealth of their family, with the amount ranging from $2,000 for very low-wealth families to $0 for very high-wealth ones. The child would receive access to those funds when they turn 18, at which point the size of the account could be around $37,000 for children from low-wealth backgrounds.
This fund would have a profound impact on people’s resilience and ability to get through disasters, both by lifting individual people out of poverty and by building wealth for entire Black and Latinx communities that they can rely on in times of need.
The Just Futures Fund has the power to virtually eliminate income and asset poverty for US households and significantly reduce racial wealth inequality. In the US, 12% of all households are living in poverty. A monthly cash transfer of $1,000 coupled with $250 for each child would reduce the overall poverty rate to 2%. Households with children would experience the largest reduction in poverty, especially single-parent households, who would see a reduction in poverty from 21% to 4%, and almost all two-parent households with children would be lifted out of poverty.
The greatest impact would be for households of color with children. The Basic Income proposal shows the largest drop in poverty for African American households with children, falling by 21 percentage points for all, and 25 percentage points for single-parent households. For Latinx two-parent households with children, poverty would be eliminated, while it would be reduced to 1% for African American two-parent households.
A report compiled by Brandeis University and the Universal Income Project lays out a number of progressive ideas that could pay for such a program. The public investment necessary to finance the Just Futures Fund can be made by rebalancing budget priorities and shifting public investments. The majority of the policy cost would be covered by a 25% tax on base income (from $0 to $43,200 for individuals and $0 to $86,400 for couples), which would recoup 90% of adult basic income payments from higher earners and raise $1.98 trillion.
The remaining cost would be covered by a combination of a wealth tax (up to $435 billion), a more progressive income tax (up to $820 billion), increasing corporate taxation and closing loopholes ($215 billion), a carbon tax ($187 billion), and a social wealth fund financed through a corporate market capitalization tax ($40 billion initially and growing over time). Combined, these funding sources total more than $4 trillion dollars, easily enough to cover the program cost.
A new analysis from the University of Michigan on the impact of recent stimulus payments shows that when people receive money with no strings attached, they lead healthier, less anxious lives. When people don’t have food or are living in poverty, they are more likely to turn to crime as a means of supporting themselves. Often enough, even those in poverty who benefit from continued support from social welfare programs like food stamps, housing assistance, and disability insurance, still barely make ends meet.
A 2018 analysis in the Social Work Research journal found that childhood poverty costs us more than $1 trillion every year—a combination of lost productivity, increased health and crime costs, and increased costs as a result of childhood homelessness and maltreatment.
By providing Black and Latinx families with greater financial resilience, a Just Futures Fund would prepare them to overcome the monetary obstacles they face, not just in the midst of a disaster, but every day. It’s time to create a safety net that provides a just future for all Americans.
To download the study on Basic Income and Generational Wealth, visit www.justfuturesfund.org.