A city in California just pays residents $ 500 per month: how does this affect their lives?

Products, electricity bills, tuition fees for children. These are some of the current expenses Thomas Vargas Jr., a Stockton resident in California, can now afford, thanks to 500 dollars a month, which he receives from the local government.

Фото: Depositphotos

Vargas Jr. is one of 125 residents in the city who were randomly selected to participate in the government’s first government experiment on guaranteed basic income, writes CBS News.

“I was surprised, then shocked, and now I’m grateful,” Vargas Jr., 35, said of the program.

According to him, his family and close friends are aware of the government payments they receive, which are credited to his account every month without any obligations on his part, but many others believe that it is too good to be true.

Basic Details

The pilot program of basic income was initiated by the Economic Security Project, a network focused on basic income in the United States, in conjunction with Stockton Mayor Michael Tubbs, who proposed using these payments as a way to reduce the gap between the rich and the poor.

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The privately funded program made the first of 18 payments in February 2019. Recipients had to be adults living in the Stockton area with income at or below the city average of $46 per year. From these people, 033 people were randomly selected and began receiving $125 a month from the government in February. The money goes to a special debit card for each recipient.

Support for the future

Vargas, who works as a supervisor in a logistics company, is currently getting a higher education in business administration. He lives in Stockton with his fiancee and two children of a couple: a six-year-old son and a seven-year-old daughter. He also has an 12-year-old son from a previous relationship.

He does not have a higher education, and believes that attending college will help him advance through the ranks. He also does not want his children to face the same obstacle as he, so he made their education one of the main priorities of his family; this decision influenced how he spends money received from the government.

“I can now afford tutoring for my son and daughter so they can be successful in school,” he said of the additional funds.

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He also creates a money cushion to prepare for the future without money from the government, because payments must be completed in August 2020 of the year.

Vargas hopes that his investment in individual retirement plans will not allow his family to find themselves in the situation in which she was before she became a member of the basic income program.

Money can buy a more peaceful night's sleep

Payments from the government also helped Vargas sleep better at night because he was confident of the financial stability of his family.

"In everyday life, I wake up much happier now because I'm less stressed and because I sleep more," he said.

Previously, Vargas spent most of his time working as a laborer, gardener and auto mechanic to make ends meet. Now he can afford to spend some time with his family, which helps him become a better father.

“It allows me to spend more time with my family, find out what my children did at school, read books with them in the evenings and go to the park. I don’t have to give up spending time with my family in order to earn money for the things I want to give them,” he said.

Basic income programs from Finland to the USA

Studies of other similar programs show that universal basic income leads to better health for people. Finland pays basic income to residents, and preliminary results show that cash assistance for 2000 unemployed citizens has increased the general welfare of the participants and reduced stress levels.

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A researcher at Stacia Martin-West, who led the selection of basic income recipients under the Stockton program, explained that the experiment was partly designed to examine "how changing income volatility with guaranteed income will affect health, anxiety, depression, and physical functioning ”Recipients.

The concept of a universal basic income came into focus in the United States when Democratic presidential candidate Andrew Yang proposed the idea of ​​a "Freedom Dividend"—a monthly universal basic income of $1000 for all American adults over 18, regardless of their work status or income .

According to his plan, Young's proposal will be financed by an 10-percent value added tax, or VAT, on the production of goods and services, which will bring 800 billions of dollars a year.

“The most direct and concrete way for the government to improve your life is to send you a check for $1000 every month and let you spend it in whatever way will benefit you the most. The government can't do much, but it can send large numbers of checks to large numbers of people quickly and reliably,” Young said.

Transferring cash directly to residents may be the most effective form of government assistance.

“Families know best what they need,” said Amy Castro Baker, who was involved in the selection process for basic income recipients in Stockton.

“When we started the study, we often had the assumption that people didn’t know how to manage what they had. But we see that people are experts in their own lives,” she explained.

Vargas stressed that the money received from the government is very valuable for him, noting that he did not spend anything on food in restaurants or impulsive purchases.

“I'm more interested in how I can use this money to earn dividends instead of going out to dinner or buying shoes. After 18 months, I want it to end with real results, and not just that I spent this money on a bunch of unnecessary things,” he noted.

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