Today’s Solutions: June 04, 2023

Michael D. Tubbs, mayor of Stockton, California, initiated a daring experiment in February 2019. He randomly selected 125 residents at or below the city’s median household income to receive $500 a month for 24 months. Two years later, the Stockton Economic Empowerment Demonstration, as the pilot was known, analyzed the program’s first year—the results are astounding.

After a year in the program, 40 percent of the participants obtained full-time jobs, up from 28 percent at the beginning. Income volatility decreased, and participants who were depressed or anxious participants were improving or even thriving as a result. The monthly payment gave one participant time to earn his real estate license. The money allowed him to study, which completely turned his life around.

From an unusual experiment to common practice

Experiments like Stockton’s were unorthodox just a few years prior. It’s now a nationwide movement. Tubbs established Mayors for a Guaranteed Income, a group of mayors with 99 affiliates around the United States. 

Early attempts, such as those in Stockton and Jackson, Mississippi, which give Black mothers $1,000 per month for a year in what is now the country’s longest-running guaranteed income program, are now being emulated across the country and targeting vulnerable populations such as single mothers and transgender people. Refugee families facing work difficulties in St. Paul receive $750 a month for a year. 

Participants in United Sound End Settlements’ Striving Toward Economic Prosperity program, which pays low-income Boston-area parents $800 a month for 18 months, say they’ve been able to save for down payments, take first-time homebuyer classes, and avoid credit card debt.

The Guaranteed Income Pilots Dashboard, created in September by Stanford’s Basic Income Lab, the University of Pennsylvania’s Center for Guaranteed Income Research, and Mayors for a Guaranteed Income, tracks guaranteed income schemes like these and their impact. The quarterly reports aim to “shed light on ways in which unconditional cash is providing people the opportunity, freedom, and resilience to build financial security.”

“Cash transfers are one of the most researched things in the developing world. There’s really profound literature for unconditional and conditional cash transfers in Asia, Africa, and Latin America,” says Stanford Basic Income Lab associate director Sean Kline. He adds there is less direct research on the effects of monthly cash distributions in the U.S. and North America.

“There was clearly an opportunity to learn more about what cash payments could mean for people, particularly during the pandemic, but also at a time when there’s growing recognition of the tremendous income and wealth inequality in the country, which is particularly racialized and gendered.”

Studying the effects of unconditional cash

The dashboard does not track all national guaranteed income pilots. Instead, researchers began with 21 comparable pilots with extensive and comparable data in order to do a rigorous “apples to apples” comparison, according to Kline. The target is to have at least 30 pilots on the dashboard by early next year.

The researchers hope that breaking down the comprehensive analyses of these initiatives would inspire city, county, state, and federal policymakers to establish more of them because they work.

Kline says unconditional cash is a wise choice. He and other project researchers hope the dashboard will make guaranteed income projects seem less like radical experiments and more like effective policy investments.

Jeremy Rosen, director of economic justice at the Shriver Center on Poverty Law, believes that pilots like those on the dashboard are helping guaranteed income plans “move from pilot to policy.”

California champions guaranteed income programs

The state of California has already transitioned from local to state policy on guaranteed income.

The state’s 2021-2022 budget allocated a five-year, $35 million general fund for guaranteed income pilots that target adolescents who have aged out of extended foster care around age 21. The program’s call for grant applications expired in September.

Following pandemic assistance such as the Child Tax Credit included in the American Rescue Plan, Rosen believes the moment has come to use tax policy to begin implementing larger-scale guaranteed income programs.

Targeted local projects in California and elsewhere continue while this big statewide fund rolls out. San Francisco will start giving low-income transgender and gender-diverse citizens monthly stipends in January. The city will add guaranteed income pilots, including one for pandemic-affected artists.

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