We know the solution to child poverty (it’s cash)

A version of this column originally appeared in The Alpena News.

Nearly 1 in 5 children in Michigan are growing up in poverty. And in some counties in the state, the rate is closer to 1 in 4. These children are much more likely than their peers to experience stress and deprivation that has profound negative impacts on healthy development, school readiness and other lifelong outcomes. But it does not have to be this way.

In 2021, lawmakers in Washington expanded the federal Child Tax Credit to reach children traditionally left out, those whose families earn too little to receive the full credit. During the expansion, the vast majority of families, including those earning less than $30,000 a year, received $3,000 per child ages 6 and up and $3,600 for young children under age 6. This temporary policy change was transformative, cutting child poverty in half in 2021 and ensuring families had their needs met during an otherwise turbulent economic period. 

Despite the success of the program, the extension was not renewed, and today 1 in 4 kids receives less than the full Child Tax Credit because their families don’t earn enough. This especially affects families in rural areas, where wages are lower and families are more likely to fall below the income threshold. 

Families need cash to afford the basics, from health care and groceries to child care and car insurance, but right now 40% of households in Michigan cannot even afford these essentials according to the United for ALICE “survival budget.” 

Cash also helps families keep a single unexpected cost from derailing their financial goals. A mom in Hillsdale County recalled a time her insurance denied coverage for her son’s insulin, “Who has $550? For most of us, that’s deciding between food and car insurance… I work full-time and I could not afford his medication on my own.”

Another parent in Wexford County reflected on the financial challenges of raising five children, “We budget for food, soccer and all that, and then we got a $17,000 bill to repair our house foundation. Every dollar is crucial.”

Fortunately, the Child Tax Credit is not the only option to get cash in the hands of families. A growing number of states are exploring guaranteed income programs to ensure families have the cash they need to make ends meet. In Michigan, the innovative Rx Kids program provides up to $7,500 for babies in a growing number of communities around the state.

Launching in Flint but since expanded to 15 other communities throughout the state, Rx Kids provides a one-time payment of $1,500 during the third trimester and monthly payments of $500 during the first six or twelve months of a baby’s life. The program is being widely studied by interested researchers and has been found to improve access to prenatal care, reduce postpartum depression, lower the rates of preterm and low-birthweight babies and decrease maltreatment allegations among infants.

Programs like Rx Kids demonstrate the transformative impact cash can have not just on reducing child poverty but also on child health and overall well-being. If we want to take steps to dramatically reduce child poverty here in Michigan, we need to be investing in cash. This should include expanding Rx Kids to more communities and adopting a state Child Tax Credit, something 15 states have already done. 

This year, alone, lawmakers in six states created or expanded state Child Tax Credits. This includes Georgia, which passed a $250 credit for children under 6, and Utah, which expanded the qualifying ages for the state’s $1,000 credit up to age 6. In Michigan, cash is a bipartisan issue. Republican and Democratic lawmakers have proposed state Child Tax Credits, although neither version has seen movement in recent months. 

Another policy lever we can activate to get cash into the hands of families with children is the Family Independence Program, which provides cash assistance to families in deep poverty, but, due to policy barriers and a low payment standard, it only reaches 1% of children statewide today.

We have the tools, research and data to guide our policymakers in developing and expanding programs that reduce child poverty. In 2026, we need the will to champion them.