The Washington PostDemocracy Dies in Darkness

A city gave people $500 a month, no strings attached, to fight poverty. It paid off, study says.

A city-provided debit card from a basic-income trial program in Stockton, Calif. (Rich Pedroncelli/AP)
Placeholder while article actions load

Residents of Stockton, Calif., who received $500 a month from a first-of-its-kind guaranteed-income program were more likely to find full-time jobs, be happy and stay healthy, according to a year-long study published Wednesday.

Supporters of universal income programs — which provide regular, unconditional payments from the government to people — say the findings should dispel common criticisms of the idea, such as that money with no strings attached will become a disincentive for people to work or will encourage them to spend it on drugs and alcohol.

Recipients of the monthly payments were twice as likely to gain full-time employment than others, according to data analysis by a pair of independent researchers, Stacia West of the University of Tennessee at Knoxville and Amy Castro Baker of the University of Pennsylvania. Most of the money distributed was spent on food or other essentials. Tobacco or alcohol made up less than 1 percent of tracked purchases.

As lawmakers in Washington consider limiting eligibility for coronavirus stimulus aid, Michael Tubbs, the former mayor of Stockton who began the program in 2017, said the research provides clear support for giving regular payments to people in need — a theory that was once deemed fringe but popularized more recently by tech entrepreneur and former presidential candidate Andrew Yang.

Proposal to send checks to Americans reignites calls for universal income

“The data proves that, particularly in a pandemic, it’s not wise policy to make less people eligible for what we know is necessary and needed,” Tubbs, who lost his reelection bid last year, said in a video conference Wednesday.

Starting in February 2019, the Stockton program has provided monthly payments for two years to 125 people living in neighborhoods with a median income below $46,034. Participants can use the money as they see fit, without work requirements or other restrictions.

It is funded by the Economic Security Project, a philanthropic group helmed in part by Facebook co-founder Chris Hughes.

Tech giants have thrown their weight behind universal basic income as automation has led to the loss of jobs, testing the idea in Stockton, a suburban city between the liberal Bay Area and Silicon Valley and the more conservative, rural counties to the east.

In D.C.'s Ward 8, 500 families will receive $1,100 a month for five months

The released results were collected before the coronavirus pandemic had hobbled the U.S. economy, and a second study is expected to be published next year, according to the Stockton Economic Empowerment Demonstration (SEED).

The findings provide insight into how money can alter a person’s behavior in a crisis such as the pandemic, according to the researchers.

The study’s authors said they believe the payment recipients were better able to set goals and have their own agency to seek more stable employment. They were also less anxious and depressed, as well as less likely to feel fatigue or body pain associated with poor emotional health.

Former mayor of Stockton, Calif. Michael Tubbs discusses a 2019 basic-income experiment, which gave 125 families checks of $500 a month. (Video: Mahlia Posey/The Washington Post)

Recipients, especially those in less-financially stable families, also stretched their resources to help feed their households and others.

Tomas Vargas Jr., a recipient in the study, said his overall health improved and he was able to spend more time with his children and wife. Vargas, formerly a part-time supervisor at a warehouse, also found a full-time job once he started receiving regular payments.

“It was a big change in my life,” Vargas told reporters Wednesday. “I was very depressed. I was down and out. I was at the bottom. SEED brought me back, gave me that chance, that opportunity.”

Cities ramp up efforts to send direct checks to residents after $15 million donation from Twitter CEO

Positive stories in Stockton have already prompted leaders in other cities to consider implementing a similar project: Dozens of mayors have joined an initiative to advocate for guaranteed income, and several pilots in cities including St. Paul, Minn., and Compton, Calif., have already begun.

“The study shows what mayors know: People are working, but the economy isn’t,” St. Paul Mayor Melvin Carter said.

Read more:

$1,000 a month, no strings attached

Rep. Rashida Tlaib introduces closest plan in Congress to universal basic income

Lacking a Lifeline: How a federal effort to help low-income Americans pay their phone bills failed amid the pandemic