Right now, there are more than 11 million children living in poverty in the United States.
However, there is no shortage of ways parents can help their children break that cycle. Solutions range from immediate guaranteed income programs to 529 accounts, in which the state actually deposits money into a college account that the child can use for college expenses at the age of 18.
Nadya Dutchin runs the nonprofit ShareBaby. The charity provides diapers and other essentials to families in the Baltimore area. She sees firsthand what happens when families can't get a handle on the financial impact of bringing a child into the world.
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"We've done some studies in the state of Maryland, and families have been missing about five days of work per month because they don't have enough diapers," Dutchin said, "It's really important for families to be able to do the things we all do, go to work and go to school, to better their family circumstances. And, you know, they can't because that gap is there."
While free diapers are one way of closing the gap, it's small. Dutchin also works closely with the Maryland Child Alliance. The organization recently proposed the city of Baltimore provide $1,000 to new parents for each child born or adopted. The plan was modeled on a similar program in Flint, Michigan called Rx Kids, the first city-wide cash program in the country. It provides $1,500 to moms during pregnancy, then an additional $500 per month during the baby's first year.
Jennifer Greenfield is an associate professor at the University of Denver's graduate school of social work. She sees both pros and cons to programs like those in Baltimore and Flint.
"So, $1,000, isn't even going to pay the entire copay of that hospital stay, but at least it's something toward those costs. It might be the cash infusion that you need to be able to go buy the crib so the child can sleep safely, that kind of thing," Greenfield says.
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However, Greenfield's concern is how quickly the new parent will burn through the cash.
"The problem is that if you give it to them at birth, then it's probably going to be spent pretty close to birth, right? For many families, that thousand dollars is going to disappear really quickly, and then they're still left kind of scrambling, trying to figure out how to make ends meet."
Guaranteed income is one way to help pull families out of poverty. However, it's not the only way. Greenfield also points to programs that offer more long-term help. Where individual states contribute towards a 529 fund. A 529 plan is a tax-advantaged savings account designed to be used for the beneficiary's education expenses . In a few states the 529 plan actually freezes the tuition rate at the time of the first deposit.
"If you put it into a savings plan, then it's something they could potentially add on to. They get the benefit of a compound interest over time, you know, those kinds of things. And so, it can be a more meaningful amount of money later on," Greenfield says.
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Fourteen states currently offer contributions towards their state's 529 program. Washington University studied state contributions toward college funds. It found that children with these types of cash development accounts have almost 3.5 times more assets compared to those who don't, thus narrowing the wealth gap.
Greenfield believes a national program is the answer.
"I think that we have seen other types of programs where these kinds of investments do end up paying off. Our Social Security program is one that was established because we had a massive crisis of poverty among older adults in the United States," Greenfield says.
Dutchin says no matter where the money comes from, the need is there.
"My hope is that we'll be able to find an amicable solution and we can get in front of poverty, or at least take the edge off of it, to help families get a really, really happy and healthy start," Dutchin said.
