On April 17, 2024
Opinions

Baby Bonds would empower Vermonters to improve their lives

By Ben Cohen and Jerry Greenfield

As the founders of Ben & Jerry’s, we know firsthand the power of investing in Vermont’s communities. Since opening our first location in downtown Burlington, we’ve used our platform to support economic and social justice. That’s why we wholeheartedly support the proposal to create a Baby Bonds program in Vermont.

The status quo isn’t working for regular people, both in Vermont and nationwide. High costs of higher education and housing, coupled with systemic barriers to capital, prevent many from overcoming cycles of generational poverty and achieving upward social mobility.

We know these challenges disproportionately impact BIPOC Vermonters. In 2020, White Vermonters had a homeownership rate of 72%, compared to 21% for Black Vermonters, a wider disparity than the national averages of 70% for White individuals and 41% for Black individuals.

Over the past several decades, America’s wealth gap between the richest and poorest families more than doubled. The wealthiest Vermonters currently earn over 10 times more than the bottom 20%.

While education is commonly viewed as “the great equalizer,” through which anyone can be successful if they work hard, the cost of higher education only widens the wealth gap. Vermont recently ranked ninth in the nation for the amount of student debt per borrower ($38,071).

Economic struggles are often mistakenly tied to personal shortcomings, but a more accurate explanation is the lack of access to capital. In Vermont, lacking financial resources makes it harder to attend college, purchase a home, or launch a business. This obstacle severely limits the ability to accumulate wealth and break free from inherited economic hardships.

A statewide Baby Bonds program seeks to address just that.

The proposal would establish a birthright to capital for every child in Vermont born on Medicaid. Initially, $3,200 would be deposited for each child and invested by the Treasurer’s Office, growing over time. Individuals could access their Baby Bond between age 18 and 30, with the initial investment projected to grow to over $10,000 by age 18 and nearly $25,000 by age 30.

The funds would be dedicated to wealth-building purposes like buying a home in Vermont, starting or investing in a business in Vermont, pursuing higher education or job training, or saving for retirement.

Vermonters enrolled in the program would have access to capital at a critical moment in their lives, providing opportunities to start their own financial futures. This would have a massive economic output and benefit to our communities.

We know firsthand the impact of having startup capital for a business. It was thanks to a $12,000 investment that Ben & Jerry’s opened its first location. We need to ensure all Vermonters have a hand up so they can fulfill their dreams of starting a business, owning a home, or being the first person in their family to go to college.

We urge lawmakers to support Baby Bonds, an investment to address intergenerational poverty and empower people to improve their lives.

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