Residents of a city in California were given money for a year just like that: how it affected their lives - ForumDaily
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Residents of a city in California were given money for a year just like that: how it affected their lives

Michael Tubbs didn't see much risk in giving money to his city's poorest residents without any strings attached. The former mayor of Stockton, California, is a strong supporter of universal basic income, a policy that essentially pays people for nothing. He introduced this basic income in the city and looked at how it affected the condition of the people. The publication told the details Business Insider.

Photo: Shutterstock

“I believed in this idea because I was raised by three amazing women,” Tubbs said. “The only problem wasn’t that they couldn’t manage money. The problem is they never had enough money to manage."

While mayor, Tubbs led the Stockton Economic Empowerment Demonstration (SEED), a pilot program that gave 125 residents debit cards that matched $500 a month. The program started in February 2019 and ended in January 2020.

Critics argued that the payments would do nothing to reduce the incentive for people to find work. But the SEED program achieved its goal of improving the quality of life for 125 residents who were struggling to make ends meet. To qualify for the pilot, residents had to live in an area where the median household income was the same as or lower than the citywide average of about $46.

A new report from a group of independent researchers showed that Stockton's program reduced unemployment among participants during the first year and helped many of them pay off their debts. The report examined the impact of payments from February 2019 to February 2020. SEED members also reported improved emotional well-being and decreased anxiety or depression.

On the subject: A universal basic income for children may appear in the USA: when and under what conditions

“It's really made a huge difference in my quality of life and the ability to do normal things that a lot of people take for granted,” said one participant. “For example, going out somewhere once every two weeks, having a nice dinner at a cafe, or buying a gift for my mom’s birthday.”

Tubbs said the $ 500 monthly payments likely helped in another way during the pandemic. They helped people wait for their federal payments or allowed them to take days off from work if they got sick with COVID-19.

“We know that $500 allowed some program participants to stay home from work,” Tubbs said. “They were able to listen to the doctor because they knew that two weeks of vacation would not be catastrophic.”

Most of the money went to food

Participants in Stockton's basic income program spent most of their benefits on basic necessities. Nearly 37% of recipients' payments went toward food, and 22% went toward discounts and other items at supermarkets. Another 11% was spent on utilities and 10% on car expenses. Less than 1% of the money went to alcohol or cigarettes.

By February 2020, more than half of participants said they had enough money to cover contingencies, up from 25% at the start of the program. The share of participants who made payments on their debts rose to 62% from 52% during the first year of the program.

Unemployment among basic income recipients fell to 8% in February 2020 from 12% in February 2019. In the control group of the experiment (those who did not receive monthly payments), unemployment rose from 14% to 15%.

Full employment among basic income recipients rose from 28% to 40% during the first year of the program. In the control group, full employment also increased, albeit less dramatically: from 32% to 37%.

"I remember saying, 'I think $500 will allow people to work more if they want to.' And I’m very proud to see that reflected in the data,” Tubbs said.

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Researchers also found that reducing anxiety, depression, and financial stress encouraged participants to set goals and helped them better deal with unexpected financial setbacks.

“My panic attacks and anxiety are gone,” one participant said.

Other projects

Tubbs was not re-elected mayor in November 2020, but his departure did not affect the SEED program, as it was already created as temporary.

Tubbs' vision is to make basic income a national policy. In June, he founded Mayors for a Guaranteed Income, a coalition of mayors interested in launching similar basic income pilots in the United States. At least 40 mayors, including Eric Garcetti of Los Angeles, California, Keisha Lance-Bottoms of Atlanta, Georgia, and Jenny Durkan of Seattle, Washington, joined the group. Twitter CEO Jack Dorsey donated $18 million to the cause.

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Inspired by the Stockton test, St. Paul, Minnesota, launched a basic income pilot in the fall, in which 150 low-income families will receive $ 1,5 a month for 500 years. Richmond, Virginia distributes $ 500 a month to 18 working families. And Compton, California, gives 800 residents a guaranteed income of $ 300 to $ 600 a month for two years.

No Republican mayor has joined Mayors For Guaranteed Income.

Tubbs said the research is more than enough to suggest that federal basic income policies will improve the quality of life for Americans.

“I’m very proud of all the pilot projects and I’m ready to implement the federal policy,” Tubbs said. “I have all the necessary evidence.”

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