What the research shows:

Cash programs pull millions out of poverty

Recent experience from the temporarily expanded federal Child Tax Credit (CTC) – which briefly functioned as a guaranteed income for families in 2021 – provides some of the most compelling evidence of how direct cash can boost economic security for families. The expanded CTC contributed to a more than 40 percent cut to child poverty nationally,[2]  lifting 3.7 million children out of poverty.[3] 

Cash boosts economic security

Evidence from pilot programs shows guaranteed incomes help make families more economically secure. The research spans decades. When families receive additional resources, they spend those dollars to meet their basic needs. For example, nearly nine in 10 Oregon families with low incomes who received the expanded CTC in 2021 reported spending it on basic needs like housing, food, and utilities.[4]  Many studies of guaranteed income pilot programs show recipients use cash to pay down debts, and are less reliant on alternative financial services like payday loans or borrowing money from friends and family.[5]

One of the more prominent examples in recent years is the Magnolia Mother’s Trust, a guaranteed income pilot program for Black mothers in Jackson, Mississippi. Many of the mothers in the program were able to afford their monthly bills without having to borrow money.[6] Moreover, the share of mothers who had savings doubled, and about three in five women reported paying off debts.

A guaranteed income would make Oregon families more economically secure

Oregon families work hard, and yet many struggle to meet their basic needs. Establishing a guaranteed income is an efficient and effective way to ensure all Oregon families are able to get by.

Endnotes

[1] United Way, The State of ALICE in Oregon.

[2] Chuck Marr et. al, Policymakers Should Expand Child Tax Credit in Year-End Legislation to Fight Child Poverty, Center on Budget and Policy Priorities.

[3] Zachary Parolin, Sophie Collyer, and Megan A. Curran, Sixth Child Tax Credit Payment Kept 3.7 Million Children Out of Poverty in December.

[4] For example, Census data reveals how Americans spent the multiple rounds of COVID stimulus payments. Nearly three in four families spent those dollars on immediate needs. In Oregon, nearly nine in every 10 families with low incomes who received the expanded CTC in 2021 reported spending those dollars on basic needs like housing, food, and utilities. In many evaluations of basic income programs, recipients report being better able to meet their basic needs each month. For more, see our Guaranteed Income Resource Hub.

[5] Evidence from the Income Maintenance Experiments of the 1960s and 70s show that recipients of basic incomes often use those added resources to pay down debts. The same is true in evaluations of more recent cash transfer experiments. For example, about half of Americans reported using the second and third rounds of COVID stimulus payments to pay down debts. Participants in guaranteed income pilots also frequently report being less reliant on alternative financial services such as check cashing businesses. For example, participants in New York City’s Family Rewards Program 2.0 were more likely to have a bank account, and less likely to rely on alternative financial services after 24 months. For more, see our Guaranteed Income Resource Hub.

[6] Asia Moore, et. al, Magnolia Mother’s Trust 2021-2022 Evaluation Report.