mother and father crouching on the grass of a front yard, smiling and watching a baby crawl forward.
Wages for low- and middle-income workers in Massachusetts have not risen substantially since the late 1970s, while wages for upper-income workers have increased fourfold, making it difficult for people with low incomes to cover basic needs, according to to a study by MassBudget.

MA ‘baby bonds,’ expanded tax credits aim to end racial wealth divide

Legislation introduced in Massachusetts aims to reduce the racial wealth gap by creating a statewide “Baby Bonds” program.

It is a publicly-funded, pooled trust fund for newborn children in low-income households without inherited wealth or opportunities to build it.

Deb Goldberg, state treasurer, said the child can access the funds once they turn 18 to help them go to college, start a business or even buy a home.

“They are a way to level the playing field and give every child a chance to achieve their full potential,” Goldberg explained.

2015 Federal Reserve study found in the greater Boston area alone, the median net worth for white households was nearly $250,000, and for Black households, it was just $8.

Advocates for low-income families say “baby bonds” are part of a holistic approach needed to help eliminate the racial wealth divide.

Joe Diamond, executive director of the Massachusetts Association for Community Action, a coalition of more than 20 community action agencies in the Commonwealth, said expanded tax credits, a higher minimum wage, and financial literacy courses in schools can all help address the structural challenges of poverty.

“What the ‘baby bonds’ program does is, it sort of expands the effect of those public policies and helps eligible low-income children and their families really begin to plan for a hopeful future,” Diamond emphasized.

Studies show improving families’ economic stability is also good for the economy.

The Massachusetts Taxpayers Association finds the gross state product would increase by roughly $25 billion over five years if the state eliminated the racial gaps in wages, housing and investments. Similar “baby bond” programs are already in place in Connecticut, California and Washington, D.C.

by Kathryn Carley, Commonwealth News Service

Kathryn Carley began her career in community radio, and is happy to be back, covering the New England region for Public News Service. Getting her start at KFAI in Minneapolis, Carley graduated from the University of Minnesota and then worked as a reporter for Minnesota Public Radio, focusing on energy and agriculture. Moving to Washington, D.C., she filed stories for The Pacifica Network News and The Pacifica Report. Later, Carley worked as News Host for New York Public Radio, WNYC as well as Co-Anchor for Newsweek’s long running radio program, Newsweek on Air. Carley also served as News Anchor for New York Times Radio. She now lives near Boston, MA.

Languages Spoken: English

Topic Expertise: education, environment, nuclear energy

Local Expertise: Massachusetts, Rhode Island, New Hampshire, Maine, New York City, Wisconsin, Minnesota

Demographic Expertise: public schools, families, children, nutrition

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