Today’s Solutions: December 01, 2021

What happens when you give gig workers no-strings-attached emergency cash grants of up to $1,000? In a new study, researchers found they were able to get back to work quicker after an emergency, felt less stressed, and, in some instances, got on track toward new financial goals, like saving to be able to cover future emergency expenses.

Those findings come from a new study by The Workers Lab, an organization that funds experiments and innovations to build power for low-wage working people, and Commonwealth, a 501(c)(3) aimed at helping struggling Americans become financially secure. The study looked at the impact of the Workers Strength Fund, a pilot in which gig workers could receive one or more grants, totaling $1,000, over the course of 2019.

“The crux of [this pilot] is a sense that sometimes just solving the problem in a fast way, that signals trust and confidence in the person who’s in crisis, is something we haven’t really done so much in this country, either in the public safety net or in the context of the workplace,” says Timothy Flacke, cofounder and executive director of Commonwealth.

Over the year, 350 workers received grants, and almost all of them requested the full $1,000. The Workers Strength Fund gave out more than $345,000 total. Workers had to say what emergency the money was needed for, though no documentation of that emergency was required. Nearly two-thirds of the recipients surveyed said they were unable to work because of their cited emergency, and 75% of that group said they returned to work as a direct result of receiving funds.

Though most recipients said they felt “an immediate increase in financial security” after receiving emergency cash, that feeling didn’t really last. A month after receiving the money, only 37% reported a continued increase in financial security; other workers were still in debt or faced additional struggles since the grants.

Still, nearly all recipients saw psychological benefits; 96% said the funds made them less stressed about their finances, and they almost universally reported feeling relief, gratitude, and happiness after receiving the grants. To Flacke, the fact that the grant process gave these workers agency over how, when, and for what to spend this money helped bolster that impact.

Of course, providing cash grants won’t solve everything, but then again it’s not all about the money: it’s that recipients feel respected and supported as they try to get life back on track, which is something we see from many basic income experiments such as the one that took place in Finland.

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