Around this time last year, the United States and the rest of the world experienced a once-in a-century phenomenon -- the COVID-19 global pandemic. The devastating public health impacts, job losses and school closures shed light on the deep-rooted inequities in this country. Many low-wage workers, racial and ethnic minorities, immigrants and women lost all streams of income and/or depleted their savings, while others worked on the front lines to keep our society afloat.1  

Through our 2020 emergency cash assistance work, we demonstrated that families need more money, plain and simple. In the process of addressing systemic inequities, we must get cash in the hands of families so they can support and stabilize themselves in “good times” but especially now, as they face evictions, unpaid bills and accumulated debt. Alongside the COVID-19 pandemic, we saw the murders of Ahmaud Arbery and George Floyd, which shed additional light on state-sanctioned violence and the undeniable interconnectedness of race, gender and class. Last year has taught us that that if we are going to thrive as a country, we must center those most impacted by deep-rooted inequities and oppression and recognize the inextricable connection between racial justice and economic justice. It is not enough to classify people as essential. We need to treat them as such. 

We are grateful to announce that with ongoing support from the Wells Fargo Foundation, we will continue collaborating with the East Los Angeles Community Corporation (ELACC) to implement a short-term, basic income initiative which will center families adversely impacted by the ongoing racial and economic crises.  

Although rapid vaccine distribution has raised hopes that the COVID-19 mortality rate may be reduced, it’s clear that communities most exploited and harmed will continue to face the devastating ripple effects of losing income, loved ones and any financial cushions they may have had pre-pandemic. Recent data shows that Latinx, Indigenous and Black Americans have borne the brunt of COVID-19 infection and death rates.2 This is not coincidental. Prior to the pandemic, the liquid asset poverty rate was 58% for Black and Latinx families, one-third of U.S. families had no savings at all, and four in 10 adults would either not be able to cover an unexpected expense of $400 or would cover it by selling something or borrowing money. This was our “normal,” due mainly to large systemic issues such as low wages, outrageous rising costs of living and rampant institutional, structural and systemic racism which permeates all aspects of U.S. society. Our recent nationwide survey showed that nearly half of all families were unable to fully cover one basic expense such as housing, food or medical care. These numbers will continue to grow as Black, Latinx and other communities of color struggle to reenter the economy, endure low wages and navigate compounding crises.  

In continuation of our 2020 emergency cash assistance work, Prosperity Now and ELACC are once again partnering, with support from the Wells Fargo Foundation, to launch a five-month unrestricted cash transfer initiative. This initiative draws on lessons from the Stockton Economic Empowerment Demonstration Project (SEED), the LIFT Family Goal Fund and our previous project. We will continue to provide recurring cash assistance to families at the lowest income level in hopes of increasing financial stability and stimulating the local economy. 

ELACC works primarily serving Boyle Heights and the East Los Angeles community, advocating for economic and social justiceby advocating for affordable housing and neighborhood economic development, encouraging grassroots leadership and supporting street vendors. One in three people in East Los Angeles have been COVID positive, and most of them are considered essential, low-wage workers. Latinx and Black households were more likely to turn to costly credit products that could increase financial vulnerability, such as credit cards and payday loans.3  

Through this initiative, 72 families will receive $500 per month for five months to help stabilize their precarious financial situations. Many of these families are undocumented and unable to access federal or state aid, like unemployment or the stimulus payments. Recent data shows that among lower income households, those in the lowest income bracket making under $25,000 were less likely to receive a check than those with higher incomes. ELACC also hopes to help small business owners survive the pandemic. Many of the participants are also street vendors, mariachis or craft artists who have been unable to work because of the COVID-related stay-at-home order.  

While our 2020 emergency cash assistance work gave families a one-time payment, this iteration will deliver monthly unrestricted cash transfers to support families for five months to demonstrate just how impactful unrestricted funds can be to a household’s financial stability and the individuals’ mental health. Prosperity Now will offer capacity building and thought partnership to ELACC to support the launch of this initiative and enhance related data tracking processes to demonstrate the impact of these funds. Look out for project findings from ELACC’s critical work in a field-facing webinar and public report at the end of 2021!