The state of poverty alleviation efforts in the United States creates an opportunity for cash transfer and guaranteed income pilots.
There is an urgent need to identify and implement social policies and programs that support women’s economic empowerment and well-being. In recent years, cash transfers and guaranteed income programs, which provide money to participants in need of income assistance, have gained widespread support in the United States, with an increase in the number of pilots post-pandemic.
One in ten Americans currently lives in poverty. Safety net programs can help people meet their basic needs and provide economic stability. However, rather than investing in and expanding these programs, they have been cut multiple times over the years. There has also been a lack of support for expanded social assistance programs due to costs and racial biases, with many families left behind, especially those without income. The result is a system that is a work-based social safety net, meaning that assistance from social insurance programs goes mainly toward those who are below the poverty line but still earn an income. This is in addition to the many regulations and requirements of social welfare programs that create barriers for families to access them.
Cash transfer and guaranteed income pilots are seen today as an opportunity for the United States to provide monetary assistance and basic needs with a more inclusive and sustainable approach. However, there is much to be understood about the impact of these programs, especially regarding women, and whether they can be an answer to poverty alleviation in the US.
The Global South has been utilizing cash transfer pilots for a while now as part of poverty alleviation efforts.
The US can learn a lot from countries that have more experience with cash transfer programs. For example, Brazil, Mexico, Colombia, Jamaica, and the Philippines have long used these programs as part of their poverty reduction efforts, with the impacts transforming lives and lasting for decades. Their experience has shown these programs to be simple, flexible, and effective. Indeed, by 2016, over 130 countries in the Global South had implemented a cash transfer program, generating a large body of evidence demonstrating the positive outcomes on participants’ health (both physical and psychological), food security, and education outcomes, among others.
In 2020, the number of cash transfer programs nearly doubled, with 214 countries and territories implementing over 400 programs in response to the COVID-19 pandemic. This expansion was because these programs have proven to be a fast and cost-effective way to address monetary needs. They have also been shown to benefit individuals and households in ways that align with policymakers’ priorities, such as expenditures on food, access to schooling, and the use of health services. Evidence also shows an increase in women’s decision-making power as well as a positive impact on the well-being of women and girls by expanding educational and employment opportunities.
Guaranteed income programs in the United States are rooted in historic movements.
While the evidence from early implementers has inspired high-income countries to implement their own programs, many, including the United States, are late adopters of cash transfer and guaranteed income programs due to the already existing social protection systems.
Still, there has been an increase in cash transfer and guaranteed income pilots in the US as an alternative to existing social protection systems. Since the first guaranteed income program launched in 2018, the IWPR report “Where to from here? Understanding the Expanding Landscape of Cash Transfers in the US and their Impact on Women,” 1 finds that more than 85 cash transfer and guaranteed income pilots have been implemented across 30 states and the District of Columbia, of which 75 are identified as guaranteed income transfer pilots. Many such programs are funded by philanthropic organizations and operated by nongovernmental organizations (NGOs), while a growing number are receiving public funds. These pilots are relatively new, small in scale, funded by private donors, and have diverse targeting. Of these programs, 11 are open only to women participants, 13 require participants to be primary caregivers, and 38 require applicants to live in households with children.
The history of guaranteed income programs in the United States is rooted in the racial and gender justice movements. The Black Panther Party’s 1966 platform and Dr. Martin Luther King Jr.’s final book both advocated for providing every person a guaranteed income. The National Welfare Rights Organization, many members of which were Black women facing employment discrimination, also played a role in advancing guaranteed income in the US by challenging the stigma of welfare and insisting on the right to a decent standard of living. Movements such as these have always understood the potential of guaranteed income programs to promote gender and racial justice, and they offer an initial guide to how we must look at the design and evaluation of these programs to ensure that women and women of color adequately benefit from them.
There is evidence of a gender impact of cash transfer and guaranteed income programs from cases around the globe.
The relatively new programs in the US provide opportunities for research on how they can be designed and targeted to have a positive and sustainable impact on women and their families. For instance, taking household dynamics and gender norms into consideration when deciding on strategies to target beneficiaries can prove beneficial. Conversely, ensuring that women specifically will receive the monetary compensation might lead to unwanted results, such as an increase in unpaid household work, one of the reasons why design is important, and policymakers should not risk “sacrificing equity for speed”.
Yet, research based on other countries’ experience shows that cash transfer pilot programs that are designed to incorporate gender-sensitive elements have the potential to increase women’s empowerment, improve household well-being, and reduce intimate partner violence. A report on cash transfers given to low-income people in 37 low- and middle-income countries found a 20% reduction in the risk of death among adult women.
Sending cash transfers to women also enhances their well-being by giving them access to essential needs and services and allowing them to pursue income-generating activities. These pilots enable women to participate in the labor market, which allows them to have control over their resources and address gender-specific constraints. Furthermore, prioritizing women in these pilots allows for a shift from traditional practices and in the dynamic of the household, leading to less intimate partner violence.
Finally, the first mayor-led guaranteed income initiative in the US, the Stockton Economic Empowerment Demonstration (SEED), found that for women who dedicate a lot of their time to unpaid care work, the alleviation of some financial stress gave them time to prioritize themselves and improve their quality of life, with some of their new free time going toward things such as preventative medical care and centering their own needs and wants.
Despite evidence, more research and consideration are needed to successfully implement guaranteed income programs in the United States.
There is still scarce research conducted on the gender impact of cash transfers and guaranteed income specifically in the United States. Furthermore, while a lot of literature from other countries found positive impacts from these pilot programs on women and families, some found negligible changes and a negative impact on gender norms. The research that has been done proves that there needs to be careful consideration of how these pilot programs are implemented.
A roundtable held by IWPR on June 26, 2023, titled “The Future of Cash Transfers and Guaranteed Income in the US,” convened a group of experts on guaranteed income to discuss the wave of pilots taking place across the country. That gathering pointed to many challenges, including how limitations in funding and the short duration in which these programs are implemented lead to program administrators having to make strategic decisions around the resources dedicated to evaluation. Despite the large pool of eligible participants, funding limitations also contribute to the limited scope of guaranteed income programs. And when designing gender-responsive cash transfer and guaranteed income programs, it is not enough to simply target more women: their differential needs and vulnerabilities must be considered.
The roundtable also highlighted that the way that guaranteed income programs are set up can create poverty traps. When participants of these pilots start receiving a small cash allowance, there comes a point when their income no longer qualifies them for the safety nets that the US provides, despite still being unable to sustain a household. Therefore, when these programs come to an end, they can be left without any governmental or private assistance whatsoever.
The current state of poverty in the United States needs an alternative to temporary pilots that could reduce poverty and to the social safety net that falls short of alleviating people from poverty. Moreover, some critiques have also made the claim that cash transfer pilots focus “on increasing the spending power of the poor” instead of focusing on transforming the economy of communities.
Nonetheless, advocates have made the argument that a single coordinated program providing a basic income is much more efficient than the multitude of welfare programs that the US currently has in place, which are riddled with overlaps and gaps. In other words, there is a need for a permanent federal guaranteed income because it allows people to meet their basic needs while being cost-efficient and politically viable.
Guaranteed income programs offer a unique and innovative opportunity to address women’s ongoing economic insecurity stemming from inequality while providing a wider social safety net in the US. Still, more needs to be understood when designing and evaluating these programs to better benefit women and women of color. The US can—and should—learn from developing nations that have successfully implemented these programs to create pilots that strengthen women’s economic status.
While cash transfer and guaranteed income programs show great promise as possible innovative solutions for addressing the economic gaps that exist in the United States, there is much to be understood about how they can best fit into the economic landscape. Further research is also required to understand the difference between cash transfer and guaranteed income, and which would benefit participants in the US more.
For an in-depth understanding of the categories, you can read the latest IWPR report, “Where to from here? Understanding the Expanding Landscape of Cash Transfers in the US and their Impact on Women.”