May 19, 2022 • 28 mins
When the Covid-19 pandemic started, many people expected inequality to get worse in the U.S. But at least for the bottom 50% of Americans, something surprising happened: Many of the least advantaged boosted their wealth. To start to understand why, we look to cash payments. No-strings-attached money went to people in need in the form of federal stimulus, the child tax credit — and local guaranteed income programs. As pandemic rescue aid wanes, is there a path to making monthly cash payments permanent? Reporter Susan Berfield looks to Jackson, Mississippi, to find out.
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Speaker 1 (00:10):
Just before the pandemic was about to take hold, the
Magnolia Mother's Trust started dolling out cash. The program in Jackson, Mississippi,
gives mothers living in subsidized housing a thousand dollars a
month for twelve months, twelve thousand dollars, no strings attached.
For the couple hundred women selected. The good news came
(00:30):
by phone. So I said, oh, my goodness, I said,
Issue place, tell me I was selected? Issue laughing. I
was like, stop, you got this sneaker? You sure you
could the right person. It made me feel goody. It
was a good feeling that my spirit was uplifted. Well.
(00:52):
I was grateful, appreciative cash. It might be the best
and easiest way to help people in need, give them
money and let them spend it however they want and
for women liked wanted to Johnson, a substitute teacher with
two kids, The call from the Magnolia Mother's Trust couldn't
have come at a better time. When pandemic kid I
(01:16):
was on a screen break and we weren't able to
go back to work. So I was like wow. I
was like, I knew I hate the preserves, but then
we didn't know when we go back to work. So
I was beginning to start worrying, and then all of
a sudden, the same week I was at I got
a call from mcnodi's most Trust with that great news.
Before she says she was barely getting by. She made
(01:37):
sixty five dollars a day and was constantly juggling between
paying her car loans, her life insurance, her other bills.
She had tried to take on a second job in
the evenings, but couldn't keep up with the physical demands
of it after teaching all day marches. Needed the extra money.
I just need the extra mony. I was tryed of juggling.
The pandemic could have stretched her even thinner. When schools
(01:58):
went virtual, she was out of a job. But not
only did she get a call in March, she'd be
getting monthly cash payments from the Magnolia Mother's Trust. She
eventually qualified for enhanced unemployment benefits to an extra seven
four dollars a week. With all that money coming in,
she had enough to pay her bills on time, to
(02:19):
save to think about moving. Oh, I feel good because
I was able to go ahead and pay everything right
away on time. Just pay everything is it was due
By the end of the year, Duannata had earned thirty
thou dollars and had saved almost half of it. To
be honest, the type of money that I was bringing
in that is the type of income that I really
will look to heir. During the pandemic, cash was a
(02:42):
surprisingly common and popular antidote to the economic crisis in
the US, and for people like Dannata, it not only
helped them stay afloat, it gave them a kind of
financial security and stability they never had before. It was
the best case scenario, but can it be a permanent solution.
(03:03):
Jobless claims coming in, I mean really jumping from the
week before pretty brutal. Three point to a million records.
Six point six million Americans filed for unemployment last week.
Some of you may be asking, where's my money? I
need that one engine. Working women were the worst invested
by the pandemic. Well, now to the billionaire boom. According
(03:25):
to Bloomberg, super yacht charters are up over three hundred
and a billionaire was created every twenty six How was
during this pandemic. No, I'm not waiting in line for
COVID test with the public growth, it is time for
a Wealth tax Scan America. Welcome back to the Paycheck.
(03:51):
I'm Rebecca Greenfield. Last week we heard a worst case scenario,
skyrocketing inequality spiraling out of control. That's what a lot
of economists thought would happen around the world, and early
in the pandemic it seemed like that was the path
the US was headed down. For me, one of the
defining images of spring where those viral photos of car
(04:14):
lines sneaking around food banks two months into this pandemic.
The strain on some families is that a fever pitch
with no jobs, no income, no way to pay rent.
Even putting food on the table is difficult, Like the
lines for free food in New Orleans, Desperation is growing
by the day. That scenario would have been a continuation
(04:35):
of decades long trends in the US. Despite being one
of the most equal countries in the world after World
War Two, heading into the pandemic, wealth inequality here had
reached levels not seen in almost a century. Since Night,
the wealthiest one person of Americans have almost tripled their
share of wealth. It was a concerning situation heading into
(04:58):
the pandemic, and when the virus hit, things looked really bad.
The economy shut down, millions of people couldn't work, and
the stock market crashed. It felt a lot like the
two thousand eight recession, or worse. What in the world
is happening on Wall Street? Two year no yields six
In the blink of an nazdac, everything and more has
(05:19):
been completely wiped out. It was the worst day on
Wall Street since the crash of But then something surprising happened.
The government stepped in with a robust policy response, much
of which was targeted at low and middle income Americans.
There were multiple rounds of stimulus checks for people making
seventy five thousand dollars or less. There was enhanced unemployment,
(05:42):
an extra six hundred dollars per week for anyone out
of work due to COVID. Small business owners were eligible
for forgivable loans, and then there was the expanded child
tax credit checks that parents received in the mail every
month for six months. Ben Steveman, the Bloomberg Wealth reporter
who I spoke to last week, told me that all
those cash injections give some Americans an amount of wealth
(06:05):
they've never had before. People were saving the money they're
paying down debt, and that ended up boosting the net
worths of a lot of families in the United States
who really had never had significant amounts of wealth. You know,
if you look at surveys going back years, a significant
share of the population, more than a third, say they
(06:27):
struggled to come up with four dollars in an emergency.
I mean, there were a lot of people who were
really cutting it close before the pandemic, and suddenly they
found themselves feeling like they had some financial wherewithal and
some resources to rely on in an emergency. That child
tax credit alone was hugely responsible for lifting millions of
children out of poverty. In other words, the COVID crisis
(06:49):
disrupted growing wealth inequality in the US. Now, the question
is can wealth gains for the bottom continue well. Much
of the government funding was never meant to last beyond
the pandemic, and dozens of US cities cash experiments are underway.
They're not as widespread as the stimulus or child tax
credit payments, but they could offer a roadmap for a
(07:12):
more permanent wealth building tool. My colleague Susan Burfield looks
at Jackson, Mississippi, where some two hundred low income black
mothers received enough money during the pandemic to sometimes double
their income. Here she is with the story. In the
summer and fall of nineteen Tamika Calhoun was going through
a tough time. Everything just started going downhill, Like everything
(07:35):
if you could go wrong, you did. I was struggling
to find a job. I would work here and there
for different um jobs where I'm taking care of someone,
but it didn't last long because I didn't have transportation.
One day in early January, as she was on her
way to a new job, her Nissan Morano cut out.
(07:56):
It was six in the morning, dark and she was
stuck in the middle of the interstate. The police called
her a tow truck. If she paid two hundred dollars,
the driver could get the car to her home, but
Tamika was short by the time I came up with
the money they told me I would need. It was
fifty dollars a day, and I didn't have it to
need it out, and because I didn't have reliable transportation,
(08:20):
they let me go. Tamica lost her car and her job,
but then her luck started to change. She found work
she could do from home, answering calls for apple, making
almost fourteen dollars an hour. It was good timing. She
couldn't have known, but COVID was about to close in
and right after that, Tamika found out that she'd be
(08:41):
receiving a thousand dollars a month from the Magnolia Mother's Trust.
It's the first program to simply give cash to low
income Black mothers living in affordable housing. It was started
in meant for the everyday shocks and stresses of trying
to get by a not enough to give single mother
some room to breathe, to plan, And on that March
(09:05):
day of Tamika's first thought, it was about all the things,
the basic things she wanted for her family. I was
thinking about all the things that we needed for the house,
for the kids. They were growing out of their clothes.
I finally was able to get them covers for their
beds because they had the same covers for a long time.
(09:25):
Just things to clean up with them around the house,
or hair products, personal care products. I was able to
kind of back up on that stuff. They were excited
because they were looking forward to trying out for different
things at school that they usually wouldn't be able to
try out for it because I wouldn't have the funds
(09:46):
to pay for it, and the pandemic quickly changed some
of her calculations about what her family would need, and
the extra money proved crucial in the way. She couldn't
have expected no new after school activities, no vacation. Instead,
she had to set up her five kids to learn
online at home, so I had to use the money
(10:08):
is to buy them computers about them death for their
rooms to make it more structured. They also got the
new clues she had wanted for them. She got a car,
which opened up all kinds of possibilities, and eventually they
got to Gotlinburg, Tennessee for a night away and it
felt good saving to go on a vacation and not
(10:29):
just using a whole check to pay for a vacation
like we had money in our saving as we were
able to go and actually have fun. The idea behind
(10:54):
the program to MAKA participated in may sound familiar. It's
called a guaranteed income and it's about giving people cash.
Unlike most safety net programs, there's no bureaucracy, no owners requirements.
It's an idea that goes way back, but it was
in when Andrew Yang based his presidential campaign on the
(11:15):
idea that people really began talking about it again. The
first time you heard it, you're like, ha ha, that's
a gimmick that will never happen. But if you dig
into it, you will find this is not an Andrew
Yang idea, visit Thomas pain idea. This is a Martin
Luther King idea. And soon this is going to be
the idea of the American people that takes us all
away into the White House. Then came the pandemic and
(11:40):
the racial justice protests, and it seemed that giving people
cash could be one way to right some economic wrongs. Now,
cities around the country are experimenting with different programs. Some
are for any resident who lives close to the poverty line. Others,
like and Jackson, are specifically from mothers residents of color. Today,
(12:01):
applications open for the much anticipated Breathe program. It is
an l a county guaranteed income program for a thousand residents.
More than one people in Providence so are the first
to receive a monthly check four five dollars. A hundred
and fifty households across San Diego County getting a check
for five hundred dollars today. The Baltimore Young Family Success
(12:21):
Fund will support two hundred young parents between eighteen and
twenty four years old with unconditional cash payments. These experiments,
i'll have two things in common. They provide cash without
any restrictions, and they want to prove that the money
won't be wasted. Data collected over decades and across the
world already show that recipients spend the money on the
(12:45):
things they need most. And since the US government gave
out a lot of cash during the pandemic, we now
also have all the data on how those payments helped
keep people from sliding into poverty. But stereotypes persist and
critics remain. There's not a lot of trust associated with
giving money to to the working class. That's Steven Nuniez,
(13:07):
a sociologist and economist who's been studying anti poverty programs
for more than a decade and guaranteed income programs for
the past three years. He works for the Jane Family
Institute in New York. There's a sort of assumption that
they're going to misuse the funds. Maybe they'll loaf around
if you don't attach it to some kind of work requirement.
(13:28):
Maybe they'll use it on gambling and drugs and alcohol
if you don't sort of limited and turn it into
a voucher like with food stamps. None of the literature
that supports that. The literature basically shows you give people
cash and they use it sorts of the ways that
you might expect them to use it. To pay off debt,
to make big purchases, to buy toys and food and
(13:49):
clothing for their kids. For kids, especially, cash pays dividends
later in life. You know, early intervention when children are
are young to prevent them from ring up in poverty
can actually read huge rewards in terms of their long
term health, in terms of their long term labor market outcomes,
criminal justice involvement and education and so forth. It's the
(14:12):
quick and easy way to do it. It's very effective.
It can be cost effective. Ayesha Yandoro, who leads the
Magnolia Mother's Trust, came to similar conclusions through her work
in Jackson. She grew up there, left to earn a
doctorate and community psychology, and then returned after deciding academia
wasn't for her after all. She helped founds bring board
(14:33):
to opportunities to provide services that families and subsidize housing
actually asked for, like homework help for their kids and
home ownership classes for themselves. When we're talking about families
that live in extreme poverty, especially in this country, we
never asked them what it is that you want or
what it is that you need. It really is a
(14:54):
hierarchy based on us telling them what they need, what
their needs are, and it's based on deservingness or ideas
of deserving this. By though, she had become concerned that
all those programs still weren't helping enough families out of poverty.
So many of our families talk about homeownership as their
main go for themselves. They talk about the picket this,
(15:17):
and we weren't seeing that happen. Every story that we
heard was something that could be address with money. No
one was saying we need more programming. What we were
hearing is, oh, well, I can't get to my job
because my car isn't working and I have to pay
(15:37):
someone gas money to get me to my job. Or
what we heard was, you know, my daughter matriculated to
the next level of the science there. I'm really excited
for her. But now that's really stressful because I got
to figure out the twenty five dollar application fee. As
we were was listening to this and listening to families,
(15:58):
so they can't really frustrated because I was like, this
is stuff that can be fixed with money, and not
a lot of money, like a relatively small amount of money.
And so I begin research and I'm like, hey, how
do you give people money? Are you? Sha us Tamika
and a few other women about the idea of just
receiving some cash. She was asking us, I guess because
(16:21):
it would go to mothers like us, like what would
we use it for? And you know, do we think
there should be stipulations that come with it? And us
being so used to think having stipulations, we were like, yeah,
it should be some stipulation. You know, you shouldn't just
give it away. Our moms were very clear that they
(16:42):
did not want to become dependent when it's money. They
wanted it really to be a springboard. The first year,
it was a lot of even though our mom's love
and trust us, there was a lot of girl quick playing,
y'all just not gonna give us money? One to women
send me It's like, you should this really sounds like
(17:04):
a scam us And I was like, you're right, this
really does sound like a scam, and If anybody else
ever calls you're saying they're going to do this, don't
believe them. You're exactly right. Finding the money to fund
the program, even two years into the pandemic, still isn't easy.
Like almost all of the local guaranteed income experiments across
(17:26):
the country, the Magnolia Mother's Trust depends on philanthropy, not
public money. Less than one percent of philanthrophic dollars come
to the South, and of that one percent, less than
one percent goes to organizations that are run by black women.
Are black people. We have successfully helped us. You're in
(17:49):
a new movement which feels really, really good. And to
know that we are doing all of that in the
backyard of one of the least progressive states in this
country is pretty dope. In the first year of the program,
Aisha raised enough money to give twenty mothers a thousand
(18:10):
dollars a month. I know that for the families that
we work with, in a lot of instances, poverty has
been systemic, and it's been generational poverty. And I know
that we are disrupting that pattern and saying, Okay, we
see you, trust you know your brilliant, we know you
have agency we know that you should be allowed to dream,
(18:32):
just like I'm allowed to dream. Since then, the Magnolia
Mother's Trust has been able to include about a hundred
women each year, and Aisha has seen just what she
and lots of others expect to see. When people get
extra cash during the pandemic, they could pay their rent,
buy enough food for their families, make sure they had WiFi.
(18:52):
They go about living their lives and they go about
taking care of business. They get their car repaired, they
pay off debt, they go back to school, they get
better jobs because now they actually can't take off work
because you know, if you're working an hourly job, you
don't have PTO where you can take off work to
(19:13):
go interview for a job. For Tamika, the extra cash
sort of raised the stakes as it was coming to
an end. She didn't want to go back to life
on fourteen dollars an hour. I need to be able
to make an income that either matches this or surpass it.
And when I say this, I mean my job plus
the Magnolia Mother's Trust money. So Tamika decided to look
(19:37):
for another career and she found one. I worked for
a company that helps their members become homeowners. So they
apply with us to get their loan, and what we
do is we give them financial counseling to get them
ready for the home ownership process. It's fulfilling for me
(19:59):
to know that I helped them achieve their goal, a
goal that I want for myself, so I know how
they feel. Jamika started her new job in November. Didn't
she realized that with her higher salary she was likely
to lose her housing subsidy. She could finally afford to move,
even if she couldn't yet afford to buy. Her family
(20:20):
left the apartment for a house with a backyard. I
was able to move, and we didn't have to worry
about using the whole paycheck to pay for the first
month's orient or paying the deposit. Not only that, my
kid's dad he ended up finding another job, and now
(20:41):
that he's been at that job, his salary has increased.
So all of that encouraged us to just want more.
(21:03):
Some of the women who got cash from the Magnolia
Mother's Dress might otherwise have fallen through the cracks. Sharika
Washington had suffered a difficult pregnancy, couldn't work, didn't qualify
for unemployment she was still recovering from an umbilical hernia
in March when she learned she'd be getting a thousand
dollars a month for the next year. First we was like,
(21:24):
what's the kid? You know, it's gotta be a kitch somewhere.
What is the kitch? When she found out there was
no catch, Sharika told her kids that she could get
them a treat, a nerf gun for her eight year
old son and for her six year old daughter, her prince.
There's petty. She's into the nail polish and the lip
(21:46):
clouds and the lip baby bracelet and hers than Sharika
got herself a car. It was seventheen hundred. I had
a two thousand and seven port focused look Gray Little
Doo Biggie And once I get the card, I was
still able to manage the money to bill. You know,
it was the big help. It was a big financial help.
(22:10):
When I talked to Sharika and March, she was about
to receive the last of the cash. She had just
found a job working in a nursing home, making over
ten dollars an hour. It wasn't as much as she
had hoped to earn, but she was excited all the same.
Can you believe it? Oh my goodness, I want to
two interviews with my daughter, Oh my hip, But I
(22:31):
thought one Monday at seven in the morning. What's twelve worth?
Peace of mind? Some hope. New local programs like the
Magnolia Mother's Trust are starting almost every month. And while
the idea of cash grants may seem like something reserved
for these small pilot projects funded only by philanthropists, there's
(22:54):
actually a recent example of how to scale this up
in the US. It's the Child Tech Credit. Families got
up to three dollars a month for each child. The
check just came in the mail. It was one of
several government funded stimulus programs during the pandemic. I think
the child tax Credit is a perfect example of what
(23:15):
a targeting, guaranteeing and come program will look like at
a federal level. We got a blueprint right there. And
the only thing we have a blueprint, we have data,
a plethora of data that showed in real time what
both resources meant for families. But the momentum for more
permanent national support has faded. The child tax Credit wasn't extended,
(23:40):
stimulus checks won't becoming again. And for opponents of these
kinds of programs, the data maybe besides the point, that's
not really what the what the battles are about. Right again,
They're about deserving nous and you know what kind of
safety net we want and what kind of society we
want to be, And that's a that's an ongoing battle.
(24:02):
I was not naive to not really understanding how pervasive
ideologies around deservedness really are, and that how we truly
view poor people within this country, um is that they
(24:22):
deserve to be poor because of behavioral choices, not recognizing
that they are poor because of systemic choices, because of
policy choices that are put in place, and because of
policy choices that, if I'm being honest, the majority of
us aloud to be put in place. And I also
say this other part that's been hard, and this is
(24:46):
I think it's the most damning part of poverty. But
this is also I think a tactic of the system
of how they work is that because the mainstream narrative
is real about behavioral ships and behavioral changes that need
took her so many of the women that we worked
with the actually believe that. And they believe that, oh,
(25:10):
if I work enough or if I save enough, or
if I do more of this, then I will have
that American dream. And that's just not the reality. You
can't work any harder than you're already working, if you
have three jobs. But they don't see that because the
mainstream narrative is that they're the problem, and they buy
(25:30):
you into that deserving No. That's something that also came
up in my conversation with Ben when I asked him
why the response to the pandemic was so different from
previous economic crisis in the US. He said that for
(25:51):
a brief moment, nobody blamed anyone for being out of
work or needing help. They blamed the virus. That's not
how people generally see poverty here. Tamika, for her part,
thinks the policymakers are getting it wrong. I think there's
a disconnect. I don't think that they see the struggle.
I think the people who are making the rules are
(26:13):
not on the ground with them, you know, with the
people who are actually out here working and trying to
make a living for people who can't work but want
a better life, like they deserve to be in nice
houses too, and not everybody's just looking for a handout.
Some people actually want to live and live a better life,
(26:34):
but they have limited resources. We're not asking for a handout,
We're asking for help. Like just we're working. We're getting
up every day doing what we're sponsible. We just want
to be able to provide for our children next week.
On The Paycheck, we had to a part of the
(26:54):
world that had lefted millions out of poverty by educating
young girls until a pandemic hit. Now those girls are
trying to get back on track. For me, I see lights,
I see like I'm going to that move that I wanted.
Thanks for listening to The Paycheck. If you like our show,
please head on over to Apple Podcast or wherever you
listen to podcasts and rate, review and subscribe. This episode
(27:18):
was hosted by me Rebecca Greenfield and reported by Susan Burfield,
Sarah Holder, and Ben Steve Berman. It was edited by
Nicole Flata with help from Francesca Levy, Janet Paskin, Rocksheeta Soluja,
and Meat. We also had editing help from Daniel Balby,
Shelley Banjo, Kristin b Brown, Gilda to Carle, Elissa McDonald,
and Kai Schultz. This episode was produced by Gilda de
(27:39):
carl and sound engineered by Matt kim Our. Original music
is by Leo Sidrin. The women you heard at the
top of the show were to Mika Calhoun, Dwanna to Johnson,
Elsie McCoy, and Sharika Washington. Special thanks to Magnus Hendrickson,
Mckinninda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Yellow. Francesca
Levy is Bloomberg's head of Podcasts. See you next week.
(28:08):
M
Just before the pandemic was about to take hold, the
Magnolia Mother's Trust started dolling out cash. The program in Jackson, Mississippi,
gives mothers living in subsidized housing a thousand dollars a
month for twelve months, twelve thousand dollars, no strings attached.
For the couple hundred women selected. The good news came
(00:30):
by phone. So I said, oh, my goodness, I said,
Issue place, tell me I was selected? Issue laughing. I
was like, stop, you got this sneaker? You sure you
could the right person. It made me feel goody. It
was a good feeling that my spirit was uplifted. Well.
(00:52):
I was grateful, appreciative cash. It might be the best
and easiest way to help people in need, give them
money and let them spend it however they want and
for women liked wanted to Johnson, a substitute teacher with
two kids, The call from the Magnolia Mother's Trust couldn't
have come at a better time. When pandemic kid I
(01:16):
was on a screen break and we weren't able to
go back to work. So I was like wow. I
was like, I knew I hate the preserves, but then
we didn't know when we go back to work. So
I was beginning to start worrying, and then all of
a sudden, the same week I was at I got
a call from mcnodi's most Trust with that great news.
Before she says she was barely getting by. She made
(01:37):
sixty five dollars a day and was constantly juggling between
paying her car loans, her life insurance, her other bills.
She had tried to take on a second job in
the evenings, but couldn't keep up with the physical demands
of it after teaching all day marches. Needed the extra money.
I just need the extra mony. I was tryed of juggling.
The pandemic could have stretched her even thinner. When schools
(01:58):
went virtual, she was out of a job. But not
only did she get a call in March, she'd be
getting monthly cash payments from the Magnolia Mother's Trust. She
eventually qualified for enhanced unemployment benefits to an extra seven
four dollars a week. With all that money coming in,
she had enough to pay her bills on time, to
(02:19):
save to think about moving. Oh, I feel good because
I was able to go ahead and pay everything right
away on time. Just pay everything is it was due
By the end of the year, Duannata had earned thirty
thou dollars and had saved almost half of it. To
be honest, the type of money that I was bringing
in that is the type of income that I really
will look to heir. During the pandemic, cash was a
(02:42):
surprisingly common and popular antidote to the economic crisis in
the US, and for people like Dannata, it not only
helped them stay afloat, it gave them a kind of
financial security and stability they never had before. It was
the best case scenario, but can it be a permanent solution.
(03:03):
Jobless claims coming in, I mean really jumping from the
week before pretty brutal. Three point to a million records.
Six point six million Americans filed for unemployment last week.
Some of you may be asking, where's my money? I
need that one engine. Working women were the worst invested
by the pandemic. Well, now to the billionaire boom. According
(03:25):
to Bloomberg, super yacht charters are up over three hundred
and a billionaire was created every twenty six How was
during this pandemic. No, I'm not waiting in line for
COVID test with the public growth, it is time for
a Wealth tax Scan America. Welcome back to the Paycheck.
(03:51):
I'm Rebecca Greenfield. Last week we heard a worst case scenario,
skyrocketing inequality spiraling out of control. That's what a lot
of economists thought would happen around the world, and early
in the pandemic it seemed like that was the path
the US was headed down. For me, one of the
defining images of spring where those viral photos of car
(04:14):
lines sneaking around food banks two months into this pandemic.
The strain on some families is that a fever pitch
with no jobs, no income, no way to pay rent.
Even putting food on the table is difficult, Like the
lines for free food in New Orleans, Desperation is growing
by the day. That scenario would have been a continuation
(04:35):
of decades long trends in the US. Despite being one
of the most equal countries in the world after World
War Two, heading into the pandemic, wealth inequality here had
reached levels not seen in almost a century. Since Night,
the wealthiest one person of Americans have almost tripled their
share of wealth. It was a concerning situation heading into
(04:58):
the pandemic, and when the virus hit, things looked really bad.
The economy shut down, millions of people couldn't work, and
the stock market crashed. It felt a lot like the
two thousand eight recession, or worse. What in the world
is happening on Wall Street? Two year no yields six
In the blink of an nazdac, everything and more has
(05:19):
been completely wiped out. It was the worst day on
Wall Street since the crash of But then something surprising happened.
The government stepped in with a robust policy response, much
of which was targeted at low and middle income Americans.
There were multiple rounds of stimulus checks for people making
seventy five thousand dollars or less. There was enhanced unemployment,
(05:42):
an extra six hundred dollars per week for anyone out
of work due to COVID. Small business owners were eligible
for forgivable loans, and then there was the expanded child
tax credit checks that parents received in the mail every
month for six months. Ben Steveman, the Bloomberg Wealth reporter
who I spoke to last week, told me that all
those cash injections give some Americans an amount of wealth
(06:05):
they've never had before. People were saving the money they're
paying down debt, and that ended up boosting the net
worths of a lot of families in the United States
who really had never had significant amounts of wealth. You know,
if you look at surveys going back years, a significant
share of the population, more than a third, say they
(06:27):
struggled to come up with four dollars in an emergency.
I mean, there were a lot of people who were
really cutting it close before the pandemic, and suddenly they
found themselves feeling like they had some financial wherewithal and
some resources to rely on in an emergency. That child
tax credit alone was hugely responsible for lifting millions of
children out of poverty. In other words, the COVID crisis
(06:49):
disrupted growing wealth inequality in the US. Now, the question
is can wealth gains for the bottom continue well. Much
of the government funding was never meant to last beyond
the pandemic, and dozens of US cities cash experiments are underway.
They're not as widespread as the stimulus or child tax
credit payments, but they could offer a roadmap for a
(07:12):
more permanent wealth building tool. My colleague Susan Burfield looks
at Jackson, Mississippi, where some two hundred low income black
mothers received enough money during the pandemic to sometimes double
their income. Here she is with the story. In the
summer and fall of nineteen Tamika Calhoun was going through
a tough time. Everything just started going downhill, Like everything
(07:35):
if you could go wrong, you did. I was struggling
to find a job. I would work here and there
for different um jobs where I'm taking care of someone,
but it didn't last long because I didn't have transportation.
One day in early January, as she was on her
way to a new job, her Nissan Morano cut out.
(07:56):
It was six in the morning, dark and she was
stuck in the middle of the interstate. The police called
her a tow truck. If she paid two hundred dollars,
the driver could get the car to her home, but
Tamika was short by the time I came up with
the money they told me I would need. It was
fifty dollars a day, and I didn't have it to
need it out, and because I didn't have reliable transportation,
(08:20):
they let me go. Tamica lost her car and her job,
but then her luck started to change. She found work
she could do from home, answering calls for apple, making
almost fourteen dollars an hour. It was good timing. She
couldn't have known, but COVID was about to close in
and right after that, Tamika found out that she'd be
(08:41):
receiving a thousand dollars a month from the Magnolia Mother's Trust.
It's the first program to simply give cash to low
income Black mothers living in affordable housing. It was started
in meant for the everyday shocks and stresses of trying
to get by a not enough to give single mother
some room to breathe, to plan, And on that March
(09:05):
day of Tamika's first thought, it was about all the things,
the basic things she wanted for her family. I was
thinking about all the things that we needed for the house,
for the kids. They were growing out of their clothes.
I finally was able to get them covers for their
beds because they had the same covers for a long time.
(09:25):
Just things to clean up with them around the house,
or hair products, personal care products. I was able to
kind of back up on that stuff. They were excited
because they were looking forward to trying out for different
things at school that they usually wouldn't be able to
try out for it because I wouldn't have the funds
(09:46):
to pay for it, and the pandemic quickly changed some
of her calculations about what her family would need, and
the extra money proved crucial in the way. She couldn't
have expected no new after school activities, no vacation. Instead,
she had to set up her five kids to learn
online at home, so I had to use the money
(10:08):
is to buy them computers about them death for their
rooms to make it more structured. They also got the
new clues she had wanted for them. She got a car,
which opened up all kinds of possibilities, and eventually they
got to Gotlinburg, Tennessee for a night away and it
felt good saving to go on a vacation and not
(10:29):
just using a whole check to pay for a vacation
like we had money in our saving as we were
able to go and actually have fun. The idea behind
(10:54):
the program to MAKA participated in may sound familiar. It's
called a guaranteed income and it's about giving people cash.
Unlike most safety net programs, there's no bureaucracy, no owners requirements.
It's an idea that goes way back, but it was
in when Andrew Yang based his presidential campaign on the
(11:15):
idea that people really began talking about it again. The
first time you heard it, you're like, ha ha, that's
a gimmick that will never happen. But if you dig
into it, you will find this is not an Andrew
Yang idea, visit Thomas pain idea. This is a Martin
Luther King idea. And soon this is going to be
the idea of the American people that takes us all
away into the White House. Then came the pandemic and
(11:40):
the racial justice protests, and it seemed that giving people
cash could be one way to right some economic wrongs. Now,
cities around the country are experimenting with different programs. Some
are for any resident who lives close to the poverty line. Others,
like and Jackson, are specifically from mothers residents of color. Today,
(12:01):
applications open for the much anticipated Breathe program. It is
an l a county guaranteed income program for a thousand residents.
More than one people in Providence so are the first
to receive a monthly check four five dollars. A hundred
and fifty households across San Diego County getting a check
for five hundred dollars today. The Baltimore Young Family Success
(12:21):
Fund will support two hundred young parents between eighteen and
twenty four years old with unconditional cash payments. These experiments,
i'll have two things in common. They provide cash without
any restrictions, and they want to prove that the money
won't be wasted. Data collected over decades and across the
world already show that recipients spend the money on the
(12:45):
things they need most. And since the US government gave
out a lot of cash during the pandemic, we now
also have all the data on how those payments helped
keep people from sliding into poverty. But stereotypes persist and
critics remain. There's not a lot of trust associated with
giving money to to the working class. That's Steven Nuniez,
(13:07):
a sociologist and economist who's been studying anti poverty programs
for more than a decade and guaranteed income programs for
the past three years. He works for the Jane Family
Institute in New York. There's a sort of assumption that
they're going to misuse the funds. Maybe they'll loaf around
if you don't attach it to some kind of work requirement.
(13:28):
Maybe they'll use it on gambling and drugs and alcohol
if you don't sort of limited and turn it into
a voucher like with food stamps. None of the literature
that supports that. The literature basically shows you give people
cash and they use it sorts of the ways that
you might expect them to use it. To pay off debt,
to make big purchases, to buy toys and food and
(13:49):
clothing for their kids. For kids, especially, cash pays dividends
later in life. You know, early intervention when children are
are young to prevent them from ring up in poverty
can actually read huge rewards in terms of their long
term health, in terms of their long term labor market outcomes,
criminal justice involvement and education and so forth. It's the
(14:12):
quick and easy way to do it. It's very effective.
It can be cost effective. Ayesha Yandoro, who leads the
Magnolia Mother's Trust, came to similar conclusions through her work
in Jackson. She grew up there, left to earn a
doctorate and community psychology, and then returned after deciding academia
wasn't for her after all. She helped founds bring board
(14:33):
to opportunities to provide services that families and subsidize housing
actually asked for, like homework help for their kids and
home ownership classes for themselves. When we're talking about families
that live in extreme poverty, especially in this country, we
never asked them what it is that you want or
what it is that you need. It really is a
(14:54):
hierarchy based on us telling them what they need, what
their needs are, and it's based on deservingness or ideas
of deserving this. By though, she had become concerned that
all those programs still weren't helping enough families out of poverty.
So many of our families talk about homeownership as their
main go for themselves. They talk about the picket this,
(15:17):
and we weren't seeing that happen. Every story that we
heard was something that could be address with money. No
one was saying we need more programming. What we were
hearing is, oh, well, I can't get to my job
because my car isn't working and I have to pay
(15:37):
someone gas money to get me to my job. Or
what we heard was, you know, my daughter matriculated to
the next level of the science there. I'm really excited
for her. But now that's really stressful because I got
to figure out the twenty five dollar application fee. As
we were was listening to this and listening to families,
(15:58):
so they can't really frustrated because I was like, this
is stuff that can be fixed with money, and not
a lot of money, like a relatively small amount of money.
And so I begin research and I'm like, hey, how
do you give people money? Are you? Sha us Tamika
and a few other women about the idea of just
receiving some cash. She was asking us, I guess because
(16:21):
it would go to mothers like us, like what would
we use it for? And you know, do we think
there should be stipulations that come with it? And us
being so used to think having stipulations, we were like, yeah,
it should be some stipulation. You know, you shouldn't just
give it away. Our moms were very clear that they
(16:42):
did not want to become dependent when it's money. They
wanted it really to be a springboard. The first year,
it was a lot of even though our mom's love
and trust us, there was a lot of girl quick playing,
y'all just not gonna give us money? One to women
send me It's like, you should this really sounds like
(17:04):
a scam us And I was like, you're right, this
really does sound like a scam, and If anybody else
ever calls you're saying they're going to do this, don't
believe them. You're exactly right. Finding the money to fund
the program, even two years into the pandemic, still isn't easy.
Like almost all of the local guaranteed income experiments across
(17:26):
the country, the Magnolia Mother's Trust depends on philanthropy, not
public money. Less than one percent of philanthrophic dollars come
to the South, and of that one percent, less than
one percent goes to organizations that are run by black women.
Are black people. We have successfully helped us. You're in
(17:49):
a new movement which feels really, really good. And to
know that we are doing all of that in the
backyard of one of the least progressive states in this
country is pretty dope. In the first year of the program,
Aisha raised enough money to give twenty mothers a thousand
(18:10):
dollars a month. I know that for the families that
we work with, in a lot of instances, poverty has
been systemic, and it's been generational poverty. And I know
that we are disrupting that pattern and saying, Okay, we
see you, trust you know your brilliant, we know you
have agency we know that you should be allowed to dream,
(18:32):
just like I'm allowed to dream. Since then, the Magnolia
Mother's Trust has been able to include about a hundred
women each year, and Aisha has seen just what she
and lots of others expect to see. When people get
extra cash during the pandemic, they could pay their rent,
buy enough food for their families, make sure they had WiFi.
(18:52):
They go about living their lives and they go about
taking care of business. They get their car repaired, they
pay off debt, they go back to school, they get
better jobs because now they actually can't take off work
because you know, if you're working an hourly job, you
don't have PTO where you can take off work to
(19:13):
go interview for a job. For Tamika, the extra cash
sort of raised the stakes as it was coming to
an end. She didn't want to go back to life
on fourteen dollars an hour. I need to be able
to make an income that either matches this or surpass it.
And when I say this, I mean my job plus
the Magnolia Mother's Trust money. So Tamika decided to look
(19:37):
for another career and she found one. I worked for
a company that helps their members become homeowners. So they
apply with us to get their loan, and what we
do is we give them financial counseling to get them
ready for the home ownership process. It's fulfilling for me
(19:59):
to know that I helped them achieve their goal, a
goal that I want for myself, so I know how
they feel. Jamika started her new job in November. Didn't
she realized that with her higher salary she was likely
to lose her housing subsidy. She could finally afford to move,
even if she couldn't yet afford to buy. Her family
(20:20):
left the apartment for a house with a backyard. I
was able to move, and we didn't have to worry
about using the whole paycheck to pay for the first
month's orient or paying the deposit. Not only that, my
kid's dad he ended up finding another job, and now
(20:41):
that he's been at that job, his salary has increased.
So all of that encouraged us to just want more.
(21:03):
Some of the women who got cash from the Magnolia
Mother's Dress might otherwise have fallen through the cracks. Sharika
Washington had suffered a difficult pregnancy, couldn't work, didn't qualify
for unemployment she was still recovering from an umbilical hernia
in March when she learned she'd be getting a thousand
dollars a month for the next year. First we was like,
(21:24):
what's the kid? You know, it's gotta be a kitch somewhere.
What is the kitch? When she found out there was
no catch, Sharika told her kids that she could get
them a treat, a nerf gun for her eight year
old son and for her six year old daughter, her prince.
There's petty. She's into the nail polish and the lip
(21:46):
clouds and the lip baby bracelet and hers than Sharika
got herself a car. It was seventheen hundred. I had
a two thousand and seven port focused look Gray Little
Doo Biggie And once I get the card, I was
still able to manage the money to bill. You know,
it was the big help. It was a big financial help.
(22:10):
When I talked to Sharika and March, she was about
to receive the last of the cash. She had just
found a job working in a nursing home, making over
ten dollars an hour. It wasn't as much as she
had hoped to earn, but she was excited all the same.
Can you believe it? Oh my goodness, I want to
two interviews with my daughter, Oh my hip, But I
(22:31):
thought one Monday at seven in the morning. What's twelve worth?
Peace of mind? Some hope. New local programs like the
Magnolia Mother's Trust are starting almost every month. And while
the idea of cash grants may seem like something reserved
for these small pilot projects funded only by philanthropists, there's
(22:54):
actually a recent example of how to scale this up
in the US. It's the Child Tech Credit. Families got
up to three dollars a month for each child. The
check just came in the mail. It was one of
several government funded stimulus programs during the pandemic. I think
the child tax Credit is a perfect example of what
(23:15):
a targeting, guaranteeing and come program will look like at
a federal level. We got a blueprint right there. And
the only thing we have a blueprint, we have data,
a plethora of data that showed in real time what
both resources meant for families. But the momentum for more
permanent national support has faded. The child tax Credit wasn't extended,
(23:40):
stimulus checks won't becoming again. And for opponents of these
kinds of programs, the data maybe besides the point, that's
not really what the what the battles are about. Right again,
They're about deserving nous and you know what kind of
safety net we want and what kind of society we
want to be, And that's a that's an ongoing battle.
(24:02):
I was not naive to not really understanding how pervasive
ideologies around deservedness really are, and that how we truly
view poor people within this country, um is that they
(24:22):
deserve to be poor because of behavioral choices, not recognizing
that they are poor because of systemic choices, because of
policy choices that are put in place, and because of
policy choices that, if I'm being honest, the majority of
us aloud to be put in place. And I also
say this other part that's been hard, and this is
(24:46):
I think it's the most damning part of poverty. But
this is also I think a tactic of the system
of how they work is that because the mainstream narrative
is real about behavioral ships and behavioral changes that need
took her so many of the women that we worked
with the actually believe that. And they believe that, oh,
(25:10):
if I work enough or if I save enough, or
if I do more of this, then I will have
that American dream. And that's just not the reality. You
can't work any harder than you're already working, if you
have three jobs. But they don't see that because the
mainstream narrative is that they're the problem, and they buy
(25:30):
you into that deserving No. That's something that also came
up in my conversation with Ben when I asked him
why the response to the pandemic was so different from
previous economic crisis in the US. He said that for
(25:51):
a brief moment, nobody blamed anyone for being out of
work or needing help. They blamed the virus. That's not
how people generally see poverty here. Tamika, for her part,
thinks the policymakers are getting it wrong. I think there's
a disconnect. I don't think that they see the struggle.
I think the people who are making the rules are
(26:13):
not on the ground with them, you know, with the
people who are actually out here working and trying to
make a living for people who can't work but want
a better life, like they deserve to be in nice
houses too, and not everybody's just looking for a handout.
Some people actually want to live and live a better life,
(26:34):
but they have limited resources. We're not asking for a handout,
We're asking for help. Like just we're working. We're getting
up every day doing what we're sponsible. We just want
to be able to provide for our children next week.
On The Paycheck, we had to a part of the
(26:54):
world that had lefted millions out of poverty by educating
young girls until a pandemic hit. Now those girls are
trying to get back on track. For me, I see lights,
I see like I'm going to that move that I wanted.
Thanks for listening to The Paycheck. If you like our show,
please head on over to Apple Podcast or wherever you
listen to podcasts and rate, review and subscribe. This episode
(27:18):
was hosted by me Rebecca Greenfield and reported by Susan Burfield,
Sarah Holder, and Ben Steve Berman. It was edited by
Nicole Flata with help from Francesca Levy, Janet Paskin, Rocksheeta Soluja,
and Meat. We also had editing help from Daniel Balby,
Shelley Banjo, Kristin b Brown, Gilda to Carle, Elissa McDonald,
and Kai Schultz. This episode was produced by Gilda de
(27:39):
carl and sound engineered by Matt kim Our. Original music
is by Leo Sidrin. The women you heard at the
top of the show were to Mika Calhoun, Dwanna to Johnson,
Elsie McCoy, and Sharika Washington. Special thanks to Magnus Hendrickson,
Mckinninda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Yellow. Francesca
Levy is Bloomberg's head of Podcasts. See you next week.
(28:08):
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