PATERSON, N.J. (CN) — Most babies born in New Jersey next year will get a $1,000 bond, Governor Phil Murphy announced Wednesday, acting on a plan to narrow the Garden State’s income gap.
Murphy first announced the proposal in late August, tipping his hat to New Jersey Senator Cory Booker who had proposed similar legislation in 2018.
Speaking this afternoon at Barbour Park in Paterson, Murphy said that, while his proposal is bold, there is no time to wait on it.
“Today is exactly the time for bold ideas,” said Murphy. “Baby bonds are exactly that kind of bold idea.”
If enacted, the program would be the first of its kind in the country. Starting in January 2021, the state will put $1,000 into an interest-bearing account for babies who families make up to $131,000. Murphy estimated that the bond will benefit 3 out of 4 New Jersey children born next year.
Reacting to the news Wednesday, Senator Booker noted that wealth inequality is at “its highest point in decades, which is severely limiting equal opportunity for many Americans.”
“In a country as wealthy as ours, every child should have an opportunity to build assets, create wealth, and achieve upward mobility,” Booker said in a press release.
For every dollar that a white family with children has, Black families with children having about one penny in wealth, according to state data.
“New Jersey is a place where anyone can pull themselves up by their bootstraps, but to do so one first has to have boots,” said Murphy. “Too many of our children begin their lives essentially barefoot.”
Getting economists on board with the plan will be trickier.
“Presumably, both Black and white families would be eligible for this grant, other things being the same,” Harvey Rosen, an economics professor at Princeton University, said in an email. “So, if they are both getting the same amount, how could it affect any gap between them? If the governor really cares about the gap between Black and white incomes, he should focus on improving the quality of education.”
Addressing similar criticisms Wednesday afternoon, Murphy insisted that every little bit will help, especially for families of color.
“Getting from nothing to something is a breakthrough,” said Murphy.
The governor’s wife, Tammy Murphy, also touted the bond proposal at Wednesday’s event.
“For working families across our state who live paycheck to paycheck, a baby bond will give their children an opportunity to break the cycle of income inequality,” the first lady said in a press release. “And, it will send every child in New Jersey the clear message that we believe in them, and they should believe in themselves too.”
Murphy noted that the fiscal state of New Jersey is not the best right now, partly due to Covid-19, but mentioned that more money can be added to the bond accounts as the economy improves. He also added that donations for the accounts will gladly be taken.
“While Covid-19 has had an enormous financial impact on many New Jersey families, it has laid bare systemic inequities that have disproportionately denied families of color an equal chance to achieve upward mobility,” said Murphy in a press release. “To emerge from this crisis as a stronger, fairer, and more resilient state, we need to lay the foundation for the next generation of New Jerseyans to secure their spot in the middle class and break the cycle of economic inequality.”