the income experiment

Inside the Nation’s Largest Guaranteed Income Experiment

O ne evening in early June, Leo and his family were able to enjoy a treat they hadn’t experienced in months: a sit-down meal at a restaurant.

At a fried chicken chain in a Compton, California strip mall, they splurged on a few plates of fried rice, each costing under $13.99. The money Leo, 39, makes as a mechanic never seems to satisfy the deluge of bills that pile up on his kitchen counter each month, so the modest meal felt like a luxury. “It made me very happy,” Leo says in Spanish through an interpreter.

The family was only able to afford the meal because Leo is part of a groundbreaking guaranteed income experiment in his city called the Compton Pledge. In regular installments between late 2020 and the end of 2022, Leo and 799 other individuals are receiving up to $7,200 annually to spend however they like. Leo, an undocumented immigrant from Guatemala who TIME has agreed to refer to by a pseudonym to protect his identity, receives quarterly payments of $900.

The organization running Compton Pledge , called the Fund for Guaranteed Income, is building the technological infrastructure necessary to distribute cash payments on a broad scale and has partnered with an independent research group to study the extent to which a minimum income floor can lift families like Leo’s out of poverty. The pilot, which distributes money derived from private donors, is not just about giving people the ability to buy small indulgences. It’s testing whether giving poor families a financial cushion can have a demonstrable impact on their physical and psychological health, job prospects and communities. And perhaps the biggest question of all: Can these cash infusions transcend their status as a small research project in progressive Los Angeles and someday work as a nationwide program funded by taxpayers?

The theory is gaining momentum in the U.S. Six years ago, there were no programs distributing and studying the effects of providing swaths of Americans no-strings-attached cash, according to Stanford’s Basic Income Lab, an academic hub tracking such programs. But now, pilot programs are taking place in roughly 20 cities around the country, from St. Paul, Minnesota to Paterson, New Jersey, with Compton’s exercise serving as the nation’s largest city-based experiment in terms of number of people served. Most of the programs are philanthropically funded—including Compton’s—and distribute different amounts of money to targeted populations, from Black pregnant women to former foster children to single parents. These laboratories for wealth redistribution all have one thing in common: they give some of society’s poorest and most marginalized people cold-hard cash, and then let them spend it however they want.

There is limited polling on support for nationwide guaranteed income programs, but 45% of Americans supported giving every adult citizen—regardless of employment or income—$1,000 per month, through a subtype of guaranteed income called Universal Basic Income (UBI), according to an August 2020 survey from Pew Research Center. Andrew Yang, who popularized the idea of UBI during his long-shot 2020 presidential campaign, wants the proposed benefit to replace most existing government welfare programs. Most other proponents of a guaranteed income in the U.S., however, resist being lumped in with his plan , believing instead that the cash benefit should supplement other forms of government assistance and target individuals who need it most.

If any form of a national guaranteed income were to advance beyond a talking point, it would mark a striking shift in how Americans view the role of government in society. Less restricted forms of cash assistance largely ended in the 1990s with President Bill Clinton’s welfare reform, as both Republicans and Democrats argued government benefits were disincentivizing work. The country’s social safety net in recent years has offered more limited relief through a patchwork of difficult-to-navigate programs, like food stamps and Section 8 housing vouchers, which often have stringent rules and leave many poor families ineligible. But after a year and a half of the pandemic, three rounds of stimulus checks and a newly expanded child tax credit , proponents of cash-based programs feel the tide turning. “This is an inevitable future,” argues Nika Soon-Shiong, the executive director of the Fund for Guaranteed Income.

Many of the country’s most significant social reform movements have been provoked by national crises, from the Great Depression’s birth of the New Deal to the 2008 financial crisis paving the way for the Affordable Care Act. Even if guaranteed income never catches on, economists and public officials may glean lessons about giving poor families financial breathing room from 2020’s pandemic relief packages and Joe Biden’s $3.5 trillion budget proposal , which includes a permanent expansion of the child tax credit and a paid family leave program for new parents. By one measure, U.S. poverty fell in 2020, largely thanks to federal aid aimed at helping people weather the worst financial crisis in decades, the Census Bureau reported in September.

But the window to enact major change closes quickly. Republican lawmakers have raised concerns that Biden’s $1.9 trillion stimulus package is feeding inflationary pressure and inciting labor shortages. It remains unclear whether Democrats will have enough support in Congress to make the assistance efforts they passed this year last beyond 2021. And despite the proliferation of guaranteed income pilots, cementing them beyond experiments funded through charity is proving tremendously politically challenging amid fears that such policies keep low-income Americans on the government dole.

That’s not how Leo sees it. While he used few bucks from Compton Pledge for a fried rice dinner, the rest of it went to more pressing causes: a $250 car diagnostic tool enabling him to take on more mechanic jobs, a college textbook for his 23-year-old stepdaughter Lesley, a few hundred dollars sent to his ailing mother in Guatemala, and payments towards a $3,000 payday loan that has accrued nearly $1,000 in interest fees in less than two years. The extra financial padding hasn’t kept him from needing to work, even through severe pain caused by his gout flare-ups. Leo, who does not have health insurance due to his immigration status, now also faces the daunting prospect of paying down a $10,612.80 hospital bill after a recent emergency room visit for chest pains that a physician linked to stress.

That stress has been building for a long time. Earlier this year, the mounting anxiety brought Leo to a Catholic church in downtown Los Angeles where he begged for a reprieve. “I asked the Virgin Mary for some sort of miracle,” he says from the covered patio outside his home that doubles as his stepson’s bedroom. Asked whether being selected to receive money from Compton Pledge was that miracle he was searching for, Leo replies with a grin: “Cien por ciento.” He feels 100% certain that it was.

‘There were no cockroaches’

Soon-Shiong, a doctoral candidate at the University of Oxford, initially planned to launch the Fund for Guaranteed income after completing her thesis on cash transfer systems in India. But the pandemic made her realize people much closer to home needed help—and fast.

“It really felt like there were not enough people thinking about the solution,” Soon-Shiong, the daughter of billionaire business tycoon and Los Angeles Times owner Patrick Soon-Shiong, tells TIME from her spacious West Hollywood apartment. “But a lot of people talking about the problem.”

She approached Aja Brown, who was finishing her second and final term as Compton’s Mayor, to create a program to bring monetary help to the struggling city, where 29% of inhabitants are Black and 68% are Hispanic or Latino. As Compton’s unemployment rate eclipsed 20% and thousands of residents fell ill with the virus—including many undocumented ones like Leo who lack health insurance—Brown and Soon-Shiong felt compelled to create an inclusive guaranteed income initiative. Unlike some forms of federal assistance, Compton Pledge would be open to undocumented immigrants and formerly incarcerated individuals. And rather than make marginalized people who are wary of giving strangers their home addresses and financial information apply for the program, Brown and Soon-Shiong used an advisory council to help them randomly select the Compton residents, including those the city government might not have records of. Starting in August 2020, Compton Pledge raised $9.2 million from donors including Amazon Studios and the California Wellness Foundation to go directly to the eventual recipients of Compton Pledge.

Compton certainly isn’t the only American city with inadequate resources, but its health and economic deficits are compounded by the absence of well-paying jobs and a high proportion of undocumented immigrants who lack health insurance. “The combination of all that leads to what we have here, which is an epidemic of poorly treated chronic disease,” says Dr. Elaine Batchlor, the CEO of MLK Community Healthcare, a hospital and healthcare system in South Los Angeles. An estimated 40% of adults in the 100,000-person city are considered obese, 12% of the adult population has diabetes, and residents are significantly more likely to die due to lung cancer, cardiovascular disease and chronic obstructive pulmonary disease compared to the surrounding county’s residents, according to data compiled by the LA County Department of Public Health.

Three out of the four Compton Pledge families TIME interviewed over the first six months they received checks expressed that they are battling some sort of chronic illness. In addition to Leo’s gout, his wife Brenda is diabetic, and their daughter Lesley is an asthmatic. Tiffany Hosley, a 40-year-old former paraeducator for Compton Unified School District, has been unable to work since she had a serious heart attack last October, and her insurance denied coverage for her $988 heart medication. Christine S., a 44-year-old transportation worker who asked TIME not to use her last name because she feared the money she gets from Compton Pledge could cost her other government benefits, also has a daughter with asthma. (Compton Pledge does not expect the funds to impact recipients’ eligibility for existing government support, but has set up a fund to reimburse participants in case they do. It has not had to use those reserves yet.)

The Fund for Guaranteed Income hopes these families can use the cash support to offset some of their medical expenses, and that the funds will also improve the recipients’ physical and mental health. Compton Pledge had promised in early press releases that Jain Family Institute, the independent research group it contracted to measure the success of the pilot, would be publishing data on the impact of the program at regular intervals, but it has not yet done so. Initial findings from a separate guaranteed income pilot in Stockton, California show promise, however. In March, the pilot reported that the recipients of its $500 per-month stipend showed statistically significant improvements in their mental health versus the control group, moving from likely having a mild mental health disorder to likely being mentally well. One year into the two-year pilot, Stockton recipients had spent 37% of their allotments on food, 22% on home goods and personal clothing items, and 11% on utilities. They spent less than 1% on alcohol and tobacco.

Beyond covering their own needs, some of the Compton recipients have committed to using the funds to pay it forward. That’s part of what the program’s organizers hope to demonstrate: that redistributing wealth through direct payments could improve access to education, housing and nutrition; reduce the racial wealth gap; and stimulate economic activity—which in turn can lift up a whole community.

Already, at least two members of the Compton Pledge have used some of their funding to start their own nonprofits. Georgia Horton endured molestation as a child, and after fleeing home with nothing but “five pieces of burnt bologna” she stole off the stove, she was arrested in the late 1980s for a murder she says she didn’t commit. During her 25-year prison stint, she became an evangelist preacher for her fellow inmates, and when she was paroled in 2017, she took that work to the greater Los Angeles area until the pandemic shuttered gathering spaces. The Compton Pledge funds posted to her account at just the right time: Horton was able to put her first $400 monthly allotment towards the tools she needed to preach the gospel virtually—namely, a new HP laptop and a ring light. With subsequent checks, she paid registration and notarization fees to launch a nonprofit, Georgia Horton Ministries, which will lead trauma-informed prison workshops and support other formerly incarcerated people.

Christine S. puts some of the $1,800 she receives quarterly towards feeding homeless individuals in Compton’s historic Lueders Park, inspired by her own past experiences with homelessness. She wants to purchase a mobile shower so homeless people don’t have to use garden hoses like she did. But the money she receives from the experiment has also helped her take her daughter Alex on a vacation to San Diego, where the toddler got to swim in a pool for the first time. “We didn’t have to get a super cheap hotel,” ​​Christine says. “There were no cockroaches.” Without the Compton Pledge money, she says, “I wouldn’t have had the financial ability to do much.”

‘She was getting more money staying home’

A UBI providing every American adult $12,000 per year would cost the U.S. government more than $3.1 trillion per year — a sum equal to roughly 90% of all the money the federal government collected in revenue last year.

Guaranteed income advocates say wealth taxes, such as those advocated by Democratic Sens. Elizabeth Warren and Bernie Sanders, could make the math work—at least for a program that helps very low-income people. And they argue that while it takes money to invest in a larger social safety net, it’s more expensive in the long run not to. Providing health care for uninsured people cost the country roughly $42.4 billion per year between 2015 and 2017, according to an estimate from the nonpartisan Kaiser Family Foundation . People who can’t pay rent or other bills are likely to need other services the government will end up paying for, like housing assistance. Poverty is also strongly linked to incarceration, which costs taxpayers at least $80 billion per year.

But conservative economists don’t believe throwing more money at the problem is a solution, especially when the national debt is already $28 trillion. “We’ve been completely irresponsible since the 21st century arrived,” says Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the center-right American Action Forum. Holtz-Eakin is also worried about free cash feeding inflationary pressure. He says increases in the consumer price index in the last year can at least partially be attributed to the pandemic-era stimulus spending: “There’s no doubt in my mind that the American Rescue Plan and those checks that went out along with the other subsidies fueled the inflation we’ve seen,” he says.

There are political risks, too. Stockton Mayor Michael Tubbs, whose small city jumpstarted the recent boom of guaranteed income experiments in 2017, lost reelection to a Republican challenger by 13 points in the Democratic stronghold in 2020 after launching his pilot. Conservative criticism has only intensified as direct cash payments become more mainstream. And if Republicans and moderate Democrats are reluctant to give U.S. citizens free cash, many are sure to express even more opposition to giving this kind of government assistance to undocumented immigrants like Leo: Donald Trump was elected President in 2016 vowing to crack down on illegal immigration, and has falsely claimed undocumented immigrants drain public benefits .

During the height of the pandemic, Trump and many congressional Republicans supported stimulus checks to help Americans make it through the country’s economic collapse. By this spring, Democrats agreed to smaller checks and limited unemployment benefits when members of their own caucus, like Sen. Joe Manchin of West Virginia, demanded the relief be targeted toward those with lower incomes. And once Biden’s stimulus package passed, Republicans pushed back against the pandemic unemployment insurance, expanded child tax credit and other assistance measures. When California approved the nation’s first state-funded guaranteed income project in July, which will dispense $35 million in monthly cash payments to pregnant women and youth who have recently aged out of foster care, Republican Assemblyman Vince Fong of Bakersfield abstained from voting for similar reasons. The cash would “undermine incentives to work and increase dependence on government,” he told the Associated Press.

Some experts say these critiques don’t hold up to reality. “There’s little to no evidence” that the federally passed income support programs are leading to work shortages, says Mark Zandi, chief economist at Moody’s Analytics. Despite 26 states voluntarily ending supplemental unemployment insurance early, there was little difference in their employment numbers and workforce participation rate in July.

But if guaranteed income pilot programs explore how free money helps recipients, they’re also testing the ripple effects on the broader community, and some small businesses in Compton aren’t on board. Nearly half a dozen Compton businesses—including a taco truck, insurance shop, and a Chinese restaurant—told TIME that increased government benefits and cash programs were making it difficult for them to hire workers. “That sign has been out here for six months,” Roland Barsoum, the manager of a local auto insurance outlet, says of a ‘help wanted’ placard in his window. He hired two people to fill the clerical position, but neither lasted more than a few weeks. “One of them stayed for about a month,” he says, “but she was getting more money staying home.”

‘Breathing room’

For all the political pushback, guaranteed income programs are proliferating in the U.S. At least 40 new guaranteed income projects have started or been announced in the last six years.

Many of these new programs are trying to help populations with a specific need or historically marginalized communities. In Cambridge, Mass., for example, the guaranteed income pilot consists of single-caretaker households and is giving more than 100 families $500 per month for 18 months. St. Paul, Minnesota is helping up to 150 families whose finances were negatively impacted by COVID-19 with $500 monthly payments for 18 months. Oakland, Calif. is focusing on non-white residents and offering $500 monthly for 18 months to 600 families earning below the area median income. A group in San Francisco is partnering with the city’s Department of Health to give pregnant Black and Pacific Islander women $1,000 a month for the duration of their pregnancies and at least six months of the child’s life. And in Jackson, Mississippi, the Magnolia Mother’s Trust, now in its third cycle, is giving 100 Black mothers $1,000 for 12 months.

Support from wealthy tech moguls has spurred some of that growth. Twitter founder Jack Dorsey has repeatedly given to guaranteed income projects through his #startsmall initiative, including donations of $15 million to the Open Research Lab (formerly Y Combinator’s UBI project) and $18 million to Mayors for a Guaranteed Income, a group founded by former Stockton Mayor Tubbs that is funding many of the cash experiments. In March, New York University used $3.5 million from Dorsey to launch the Cash Transfer Lab, a center that will study the effect of such policies.

The focus on Black women in several of the programs is not a coincidence. “The data shows that Black women, Black mothers specifically, have been left out of opportunities for not only wealth creation, but opportunities for income in a way that the rest of this country has been allowed to succeed,” says Aisha Nyandoro, the chief executive officer of Springboard To Opportunities, the organization behind Magnolia Mother’s Trust. Black families have the second-highest poverty rate in the U.S. after only Native Americans, with 21.2% living below the poverty line, and 27% of Black families with single mothers living in poverty, according to U.S. Census Bureau data.

Proponents say that for guaranteed income programs to most effectively target these populations, they must break the stigma of accepting help that many poor Americans have internalized. In San Francisco, prospective participants said they feared being viewed as “welfare queens,” according to program organizers, and some mothers in Jackson described how important their independence is to their identity.

The promise of some relief from crushing financial stress can outweigh those concerns. “There always comes a time where you’re going to need help,” says Danel Paige, 28, a member of the Jackson program. Throughout the pandemic, she has been working as a Head Start teacher, attending graduate school and taking care of her two children, ages 8 and 3, while their father’s military job keeps him stationed several states away. The money from Magnolia Mother’s Trust has helped her keep up with her electric bill and her car payment, and she’s hoping she can save enough to move to a safer neighborhood after losing a loved one to gun violence earlier this year. “I’m trying to lead a different life for myself,” she says. “This money is a huge part of that decision.”

That Paige is getting closer—but not yet able—to leave her neighborhood isn’t shocking to the guaranteed income advocates who designed these free cash projects. The money was never intended to be a panacea. “It’s not going to solve all of the systemic challenges that this country has,” says Nyandoro.

Poverty persists, as do its root causes. But for the lucky 800 in Compton, the unconditional money is a breath of fresh air in a smog-laden city. “Having a guaranteed income and a poverty floor enables people to have breathing room to make better decisions for their families,” former mayor Brown says, “to be able to spend time to maybe be able to actually go on an interview, to be able to plan a few years in advance instead of having to live paycheck to paycheck.”

Such is the reality for Leo, at least until his quarterly checks stop coming. An extra $3,600 per year won’t pay off his payday loans, get him health insurance, or allow his family to rent a home that wasn’t converted from a former car garage. But the money has loosened the financial noose fastened around their necks. Like an old family mantra promises, they can finally breathe a little easier: “Dios aprieta pero no ahoga,” recites Leo’s daughter Lesley. In English: God squeezes but doesn’t choke.

-With reporting by Mariah Espada and Nik Popli/Washington and Leslie Dickstein/New York.

More Must-Reads from TIME

• How Nayib Bukele’s ‘Iron Fist’ Has Transformed El Salvador
• What Makes a Friendship Last Forever?
• How to Read Political Polls Like a Pro
• Long COVID Looks Different in Kids
• What a $129 Frying Pan Says About America’s Eating Habits
• How ‘Friendshoring’ Made Southeast Asia Pivotal to the AI Revolution
• Column: Your Cynicism Isn’t Helping Anybody
• The 32 Most Anticipated Books of Fall 2024

Write to Abby Vesoulis/Compton, CA at [email protected] and Abigail Abrams at [email protected]

What do you think? Leave a respectful comment.

Stockton, california, gave residents a guaranteed income. here’s what happened.

PBS News Hour PBS News Hour

• Copy URL https://www.pbs.org/newshour/show/stockton-ca-gave-residents-a-guaranteed-income-heres-what-happened

What would happen if you gave people $500 a month, no strings attached? Stockton, California set out to answer that question two years ago as one of the first U.S. towns to pilot a Universal Basic Income program. Former Stockton mayor Michael Tubbs joins Hari Sreenivasan to discuss the findings of this social and economic experiment — and what it could mean for America’s future.

Read the Full Transcript

Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors.

Hari Sreenivasan:

For more on the potential success of guaranteed basic income programs, I spoke with the former mayor of Stockton, California – Michael Tubbs, whose two-year basic income experiment there is now providing data on the impacts of the program.

So, Michael Tubbs, there was the experiment the whole country was talking about. What happens when you give $500, no strings attached to people, what did you find?

Michael Tubbs:

We found that, number one, people did not stop working. In fact, we found that those who received the guaranteed income were more likely to find full-time employment and were less likely to be unemployed than they were before the guaranteed income, but also in comparison to the group of folks in the control group who unfortunately did not receive the guaranteed income.

We also saw that, no surprise, that the $500 allowed people to be better able to handle emergencies when they came up to deal with income volatility. And that we also found that health, mental health impacts, from something as small as $500. We saw that depression decreased. We saw that cortisol levels decreased. We saw that stress and anxiety decreased. And according to the Kessler scale, comparable to clinical trials of Prozac, which doesn't mean that medicine isn't important. But I think it does mean that economic insecurity has a huge mental health cost and so much of the anxiety and stress we see is due to economic insecurity.

And then we also saw that people were better able to do the three things governments designed to allow people to do, be better parents, be better partners and be better neighbors. They said they could breathe, that they were happier, they had space to think about things other than meeting their basic necessities. And I'm incredibly proud of those findings.

I should mention that this data looks at the year that ended right about when COVID started. So one of the critiques that people who are against any kind of guaranteed income always say is, you know what? How are these people going to spend this money, they're going to buy drugs and as you pointed out, they weren't lazy, that they actually went out and got jobs or they were more likely to be working. But what did they spend the money on?

And this is my favorite part, or all of it's my favorite, but this is a question we get the most, and everyone turn up the volume, make sure we get this one! Folks spend money the way you and I spend money, because the folks in the program are people, like you and I. So they spent their money on necessities, on their car, on childcare, on bills, on housing, on food. The largest expenditure every month before the pandemic, and during, was always food and less than two percent of money was spent on drugs and alcohol.

And what's fascinating to me is that I probably answered this question more over the past two years than Congress has had to answer in terms of the $2 trillion in government dollars we gave in tax cuts in 2017. I've got more questions about the million dollars in philanthropic money, how that money was spent, than $2 trillion of all of our dollars that went to the richest among us due to the 2017 tax cuts. And I guarantee you, my folks spend much better.

So we're going to wait another year until the data comes out of what happened between sort of last February and the end of this year and the end of last year. But I want to know kind of how do we take this forward? I mean, you are now running an organization where other mayors have signed on to this idea. Now, does that mean that these cities are going to roll their own guaranteed income plans out?

So we have about 44 mayors who are signed on to Mayors For Guaranteed Income, and many of those mayors have already begun doing pilots. So St. Paul, Minnesota, led by Mayor Melvin Carter, is doing a pilot using the first city in this country to use federal dollars using Kahrizak dollars and private dollars to provide a guaranteed income. We know that Richmond, Virginia, doing the same thing. Compton, California, is doing a guaranteed income pilot. I was just on a press conference with Paterson, New Jersey doing a guaranteed income pilot. Gary, Indiana, doing a guaranteed income pilot. San Francisco, California, doing a guaranteed income pilot for expecting mothers. Jackson, Mississippi, doing a guaranteed income pilot for Black mothers. A bunch more will be rolling out over the next couple of weeks.

So I think the goal behind these pilots are to show whether you're working with employed people, unemployed people, formerly incarcerated people, middle-class people, small business owners, whoever, whatever group you care about, a guaranteed income actually helps them and actually helps all of us. And the idea is to get it into a federal policy, some sort of guaranteed income federal policy, which we understand it's a long game.

Some of this was stuff we would expect to say, OK, well, people might, you know, spend it on basic needs. They might buy diapers, they might buy food with it. What were you surprised by when you looked at the aggregate data of how all of these people behaved for a whole year with this money?

I was surprised at how big of an impact something as small as $500 could have. Right. I grew up working poor, grew up in poverty. So I trust people who are economically insecure with my life those are the people who raised me, who taught me, who made me who I am. So I wasn't surprised with the decisions. I was surprised at the huge impacts. We're talking about something as small as $500, I would have thought we have seen more pronounced impacts of the $1,000, $2,000 level. But to see such huge impacts that $500 makes me even more adamant about the need for our policy because there's not a lot of money. I was also surprised with how expensive it is to be kind of economically insecure. I really underestimated how not having paid time off and having to survive paycheck to paycheck makes it very risky to take a risk. Where taking the day off of work to go interview for another job is a $200 risk that a lot of people don't feel comfortable taking, or they are the primary breadwinner and they live paycheck to paycheck. So that's what really kind of moved me was this notion that so much of our entrepreneurial brilliance, so much of folk's ability to assert themselves and to have agency is hampered by just not having enough money. So I think about that, not having enough money to interview for a job you're qualified for. That's bizarre to me, not having enough money to pay for childcare, that's like bizarre to me. How much potential we're wasting because people are working, and working hard, but aren't able to work in a way that maximize their gifts and talents.

So we've always heard that phrase time is money. But you're also proving here that money is time.

Yeah. And that's why I realize that's been my biggest takeaway, that when we talk about money, we're talking about agency and time and how you use your time. Now, as I reflect on it, all my very wealthy friends have complete agency over their time. They wake up every day and they decide what call they want to take, and what call they don't want to take. They decide, do I hang out with my kids today? Do I pay somebody to hang out with my kids? They just have so much choice every single minute of their day. I think, at a baseline, everyone deserves that dignity of being able to choose how to spend time in ways that maximize utility for themselves, for their families and for the wider community.

Michael Tubbs, with the Mayors For Guaranteed Income, thanks so much for joining us.

Thanks so much for having me.

Listen to this Segment

Watch the Full Episode

Support Provided By: Learn more

More Ways to Watch

Educate your inbox.

Subscribe to Here’s the Deal, our politics newsletter for analysis you won’t find anywhere else.

Thank you. Please check your inbox to confirm.

Stockton’s Basic-Income Experiment Pays Off

A new study of the city’s program that sent cash to struggling individuals finds dramatic changes.

Two years ago, the city of Stockton, California, did something remarkable: It brought back welfare.

Using donated funds, the industrial city on the edge of the Bay Area tech economy launched a small demonstration program, sending payments of $500 a month to 125 randomly selected individuals living in neighborhoods with average incomes lower than the city median of $46,000 a year. The recipients were allowed to spend the money however they saw fit, and they were not obligated to complete any drug tests, interviews, means or asset tests, or work requirements. They just got the money, no strings attached.

These kinds of cash transfers are a common, highly effective method of poverty alleviation used all over the world, in low-income and high-income countries, in rural areas and cities, and particularly for households with children. But not in the United States. The U.S. spends less of its GDP on what are known as “ family benefits ” than any other country in the Organization for Economic Cooperation and Development, save Turkey. The Temporary Assistance for Needy Families (TANF) program spends less than one-fifth of its budget on direct cash aid, and its funding has been stuck at the same dollar amount since 1996—when the Clinton administration teamed up with congressional Republicans to turn it into a compulsory-work program. Those changes sliced into the safety net, allowing millions of people to fall through.

Most adults without children have no program to help them keep gas in the car and a roof over their head, no matter how poor they are. Most families with kids don’t have one either. In the United States, poverty is used as a cudgel to get people to work. We got rid of welfare for poor families’ and poor individuals’ own good , the argument goes. Give people money, and they stop working. They become dependent on welfare. They never sort out the problems in their life. The best route out of poverty is a hand up, not a handout.   

Stockton has now proved this false. An exclusive new analysis of data from the demonstration project shows that a lack of resources is its own miserable trap. The best way to get people out of poverty is just to get them out of poverty; the best way to offer families more resources is just to offer them more resources.

Derek Thompson: Busting the myth of ‘welfare makes people lazy’

The researchers Stacia Martin-West of the University of Tennessee and Amy Castro Baker of the University of Pennsylvania collected and analyzed data from individuals who received $500 a month and from individuals who did not. Some of their findings are obvious. The cash transfer reduced income volatility, for one: Households getting the cash saw their month-to-month earnings fluctuate 46 percent, versus the control group’s 68 percent. The families receiving the $500 a month tended to spend the money on essentials, including food, home goods, utilities, and gas. (Less than 1 percent went to cigarettes and alcohol.) The cash also doubled the households’ capacity to pay unexpected bills, and allowed recipient families to pay down their debts. Individuals getting the cash were also better able to help their families and friends, providing financial stability to the broader community.

“It let me pay off some credit cards that I had been living off of, because my household income wasn’t large enough,” one recipient named Laura Kidd-Plummer told me. “It helped me to be able to take care of my groceries without having to run to the food bank three times a month. That was very helpful.” During the study, Laura also experienced a spell of homelessness when the apartment building she was living in had a fire. The Stockton cash helped her secure a new apartment, ensuring that she could afford movers and a security deposit.

The researchers also found that the guaranteed income did not dissuade participants from working—adding to a large body of evidence showing that cash benefits do not dramatically shrink the labor force and in some cases help people work by giving them the stability they need to find and take a new job. In the Stockton study, the share of participants with a full-time job rose 12 percentage points, versus five percentage points in the control group. In an interview, Martin-West and Castro Baker suggested that the money created capacity for goal setting, risk taking, and personal investment.

“The big change was how it helped me see myself,” Tomas Vargas, another recipient, told me. “It was dead positive: I am an entrepreneur, I think of business ideas, I make business choices, I want to be financially stable.” When the program started, he worked in logistics. Now, in addition to nurturing his side projects, he is a case manager for individuals on parole.

Zach Parolin: Welfare money is paying for a lot of things besides welfare

He noted that receiving the money had made him more civically and politically engaged, if also more infuriated at the country’s scorn toward low-income households. “It’s like it’s a big game,” he said. “These people are living with a silver spoon, talking—but how about you walk this life? Have you ever even seen it?”

Finally, the cash recipients were healthier, happier, and less anxious than their counterparts in the control group. “Cash is a better way to cure some forms of depression and anxiety than Prozac,” says Michael Tubbs, a former mayor of Stockton, who spearheaded the project. “So many of the illnesses we see in our community are a result of toxic stress and elevated cortisol levels and anxiety, directly attributed to income volatility and not having enough to cover your basic necessities. That’s true in the public-health crisis we’re in now.”

More work, less destitution, more family stability, less strained social networks, less stress, fewer incidences of homelessness, fewer skipped meals: This is what welfare could give the country.

And it just might. America’s welfare politics have shifted radically of late, in part because of the economic pressures felt by Millennials, the first generation in recent U.S. history likely to end up poorer than their parents. Two once-in-a-lifetime recessions, persistent wage stagnation, wild wealth and income inequality, the student-debt crisis, housing shortages, and a broader cost-of-living crisis have made redistributive policies much more palatable to them—and they’re now the country’s largest voting bloc. The pandemic has shifted U.S. welfare politics too, emphasizing the need for child-care benefits and demonstrating the power of cash as stimulus.

Right now, Democrats are pushing to send low- and middle-income parents $300 a month for each child younger than 6 and $250 a month for children ages 6 to 18 as part of President Joe Biden’s $1.9 trillion coronavirus-relief package. The program would be temporary, but there is wide support for making it a permanent entitlement. Senator Mitt Romney, a Utah Republican, has put forward a proposal to eliminate TANF and replace it with a straightforward child allowance. A number of state, local, and nonprofit efforts are getting going too.

The Stockton demonstration project is ending. But a group Tubbs founded, called Mayors for a Guaranteed Income , is extending the initiative nationwide, with cities from Compton to Gary to Newark making plans to send low-income residents cash.

These policies are being described as child allowances, guaranteed incomes, and universal basic incomes—not as welfare—thus dropping some of the racist freight attached to TANF. But they are, in fact, a kind of welfare. Both as a policy and a concept, it is what so many Americans need.

About the Author

More Stories

The Truth About High Prices

Poor Black Kids Are Doing Better. Poor White Kids Are Doing Worse.

An experiment to inform universal basic income

Readers who are familiar with the inequality  debate or the fears that robots will take all of our jobs will almost certainly have heard about the idea of a universal basic income. As typically conceived, basic-income programs are meant to provide a financial safety net, with no obligations and without the bureaucracy and associated administrative costs of means-tested benefits. Trends in globalization and automation, as well as the rapid rise in the cost of necessities, such as housing, had already started to put pressure on social contracts  in many countries before the pandemic. Now, with COVID-19 creating additional economic risks —especially for already-vulnerable groups —questions about how best to support people living on low incomes are bound to become even more important.

The body of quantitative evidence for or against a universal basic income (UBI) is still slim. The context and design of the first wave of policies, from 1960 to 1980 and primarily in North America, make the results hard to generalize. In the 2000s, a new wave of experiments—some funded by charities rather than governments—has sprung up. Municipalities in the Netherlands, Barcelona in Spain, the US city of Stockton, in California, the Brazilian city of Maricá, and the province of Gyeonggi in South Korea are among the places experimenting with a basic income. 1 Evaluation of Finland’s basic income experiment , Reports and Memorandums of the Ministry of Social Affairs and Health, 2020.

Research-based policy making

Randomized control trials (RCTs) are difficult to execute in public policy. To draw robust conclusions, researchers must follow best practices to ensure that study groups are large enough and representative of each demographic group of interest. The control environment should be free of external disturbances that could influence the study’s outcomes. To avoid putting a study’s power and credibility at risk, researchers must resist pressures to rush the results.

Finland’s pilot program suffered from all of these issues. It was imperfect in many respects. The number of people receiving the basic income instead of normal unemployment benefits was only 2,000. New unemployment policies were implemented halfway through the experiment. Despite the initial aspirations of the research team, it could test only a single version of the policy rather than many variants. There was even initial ambiguity about which effects the study should track, before ultimately settling on correlations with employment, financial well-being, health, mental well-being, and trust.

Some of the results—for instance, those on employment—were not conclusive, and many aspects of the study and findings were criticized and disputed. However, in the end, even with these flaws, the completed experiment and the associated research have shed important light on the complex considerations and implications of a basic income.

However, to date Finland is the only country that has managed to complete a nationwide randomized control trial of a basic-income program. The research methods used were particularly diverse and included literature reviews, microsimulations, surveys, data linking, in-depth interviews, and media analysis. In this article, we highlight the insights that we found most interesting. More research is needed in this multifaceted and complex area, not least because of the many unanswered questions on how a universal basic income could be funded—and how it would interact with other sources of government assistance. 2 The full evaluation report of Finland’s basic-income experiment is available online in Finnish, along with a short English-language summary . A two-year experiment cannot provide information about what would happen, and how the costs and benefits would stack up, if all citizens or residents received a permanent basic income. Crucially, the effects would depend on design choices such as which other benefits the basic income replaced. It is also worth noting that the methods and conclusions of the Finnish study were not undisputed (see sidebar, “Research-based policy making”).

In Finland’s two-year study, a treatment group of 2,000 randomly picked, initially unemployed people received a guaranteed, unconditional, 3 Recipients were not required to show that they were looking for work, for example, nor were their basic-income payments reduced if they found paid work. and automatic cash payment of a modest €560 per month instead of a basic unemployment allowance in similar amounts. Even with a housing allowance, which basic-income recipients were eligible for, this level of support was significantly below the incomes of most Finnish households (Exhibit 1). 4 A one-person household relying solely on the basic income of €560 per month would also be eligible for a housing allowance, which in 2017 averaged €330 per month. At the resulting total income of €890 per month, such a household would be considered at risk of poverty. (Finland’s poverty threshold, defined as 60 percent of the median equivalized disposable income after social transfers, was €1,230 per month in 2017.) Thus, the basic-income experiment was designed to be broadly cost neutral rather than to increase income levels significantly. All other unemployed people, who continued to receive standard benefits, formed the control group.

The final results from Finland’s experiment are now in, and the findings are intriguing: the basic income in Finland led to a small increase in employment, significantly boosted multiple measures of the recipients’ well-being, and reinforced positive individual and societal feedback loops.

Would you like to learn more about our Public Sector Practice ?

A small increase in employment.

In the design of the Finnish experiment, the main research question, agreed to by parliament in the enabling legislation, was the impact of a basic income on employment. Many policy makers assume that an entirely unconditional guaranteed income would reduce incentives to work. After all, the argument goes, why bother with a job if you can have a decent life without one? This assumption has led many countries to deploy active labor-market policies that require people on unemployment benefits to prove their eligibility continually and, often, to participate in some kind of training or to accept jobs offered to them.

Interestingly, the final results of Finland’s program, released this spring, found that a basic income actually had a positive impact on employment. People on the basic income were more likely to be employed than those in the control group, and the differences were statistically significant, albeit small. Concurrent changes in other unemployment policies make it difficult to ascertain, from this study, whether the basic income, the other changes, or both were responsible for the higher employment levels. However, something about the modest level of the basic income and the lack of conditions attached to receiving it seems to have motivated recipients to seek and accept work they otherwise might not have. 5 One of the main arguments in favor of an unconditional basic income that replaces means-tested benefits is that it helps people avoid the so-called welfare trap: a person might be financially worse off by accepting work than by remaining on benefits.

A critical lesson of the Finnish experiment is the complexity of implementing a basic income. Policy makers need to decide how it should interact with a large number of other policies, such as child benefits, housing benefits, pensions, health insurance, and taxation; for example, in the Finnish experiment, basic-income recipients were eligible for housing allowances but not for basic social-assistance payments. Unless such linkages are streamlined, they could detract from a basic-income system’s potentially considerable savings in administrative costs.

Such interactions emphasize the importance of running further experiments and tracking outcomes across a wide range of well-being factors, including not only employment and financial security but also health and happiness. Of course, the effects will vary from one group to another.

A huge boost to well-being

However you read the findings on employment, other effects were clear: people on the basic income reported significantly better well-being on multiple dimensions. Average life satisfaction among the treatment group was 7.3 out of 10, compared with 6.8 in the control group— a very large increase . To experience a similar lift in life satisfaction, we estimate that a person’s income would need to go up by as much as €800 to €2,500 per month—60 to 170 percent of the average per-capita household income in the European Union. Indeed, the difference was big enough to erase the gap in life satisfaction between unemployed and employed people.

These significant positive findings on well-being are no mystery: the basic income seems to have improved all the major components of life satisfaction (Exhibit 2). People receiving the basic income reported better health and lower levels of stress, depression, sadness, and loneliness—all major determinants of happiness—than people in the control group. Recipients of the basic income also demonstrated more confidence in their cognitive skills, assessing their ability to remember, learn, and concentrate at higher levels than the control group did. And the basic income enabled people to perceive their financial situation as more secure and manageable, even though their incomes were no higher than those of people in the control group. Finally, basic-income recipients expressed higher levels of trust in their own future, their fellow citizens, and public institutions.

Reimagining the postpandemic economic future

Positive feedback loops.

The basic income also appears to have had an effect on the dynamic cause-and-effect loops that trap some people in deprivation while others thrive on multiple dimensions. In other words, a relatively small positive intervention seems to have generated multiple mutually reinforcing positive effects. These dynamics could completely change the typical calculus of cost–benefit analyses. The Finnish study finds that the basic income unlocked at least two virtuous cycles: one that operates at the level of individuals (and their families) and another at the level of society.

At the individual level, a monthly, guaranteed, and entirely unconditional cash sum had a liberating effect on many recipients. 6 “Results of Finland’s basic income experiment: Small employment effects, better perceived economic security and mental well-being,” Kela, June 5, 2020, kela.fi. Better feelings of health, happiness, cognitive abilities, and financial security seem to have instilled a sense of confidence that encouraged the recipients to branch out and to seek more expansive opportunities: unpaid work, training, or employment. These activities, in turn, fueled more positive feelings. The recipients’ trust in their own abilities and their positive outlook seem to have acted as self-fulfilling prophecies. In contrast, research has found that people experiencing scarcity and uncertainty tend to suffer from reduced bandwidth, shortened time horizons, and feelings of inadequacy or helplessness. 7 Sendhil Mullainathan, Frank Schilbach, and Heather Schofield, “The psychological lives of the poor,” American Economic Review: Papers & Proceedings 2016, pp. 435–40.

At a societal level, Finland’s basic-income experiment promoted another interesting virtuous cycle, around trust. Trust in others and institutions is a fundamental building block of well-functioning societies. When researchers look for determinants of both well-being and economic prosperity, trust regularly crops up as a key variable. Indeed, Finland is a case in point: it ranks at the top of global measures of happiness 8 World happiness report 2020 , March 20, 2020, worldhappiness.report. and also boasts the second-highest rating on trust in other people, after Norway (Exhibit 3).

When people trust institutions, such as the police, the judiciary, and public services, their trust in others also tends to increase, 9 Peter Thisted Dinesen and Kim Mannemar Sønderskov, “Trusting the State, Trusting Each Other? The Effect of Institutional Trust on Social Trust,” Political Behavior , October 27, 2015. so it isn’t trivial that Finland’s basic-income program improved that level of trust. At the end of the two years, basic-income recipients registered elevated levels of trust in other people and institutions, such as Finland’s politicians, political parties, parliament, judiciary, and social-security system. One explanation could be that the basic-income experiment did not involve bureaucracy, another that the recipients felt society—or “the system”—was not neglecting people who had fallen on hard times.

As with any policy analysis, the results of this experiment remain subject to debate and can’t necessarily be generalized. As a result, the experiment does offer an object lesson in the complexity of designing and implementing a randomized control trial of basic income. Nevertheless, more research on basic income is required. We can hope that Finland’s example will inform and inspire others as they set up their own experiments.

The authors wish to thank Marc Canal for his contributions to this article.

This article was edited by Dennis Swinford, a senior editor in the Seattle office.

Explore a career with us

Related articles.

Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages

A new look at the declining labor share of income in the United States

Watch CBS News

Here's what a Sam Altman-backed basic income experiment found

By Megan Cerullo

Edited By Anne Marie Lee

Updated on: July 23, 2024 / 10:33 AM EDT / CBS News

A recent study on basic income, backed by OpenAI founder Sam Altman, shows that giving low-income people guaranteed paydays with no strings attached can lead to their working slightly less, affording them more leisure time. 

The study, which is one of the largest and most comprehensive of its kind, examined the impact of guaranteed income on recipients' health, spending, employment, ability to relocate and other facets of their lives.

Altman first announced his desire to fund the study in a 2016 blog post on startup accelerator Y Combinator's site.

Some of the questions he set out to answer about how people behave when they're given free cash included, "Do people sit around and play video games, or do they create new things? Are people happy and fulfilled?" according to the post. Altman, whose OpenAI is behind generative text tool ChatGPT, which threatens to take away some jobs, said in the blog post that he thinks technology's elimination of "traditional jobs"  could make universal basic income necessary in the future. 

How much cash did participants get?

For OpenResearch's Unconditional Cash Study , 3,000 participants in Illinois and Texas received $1,000 monthly for three years beginning in 2020. The cash transfers represented a 40% boost in recipients' incomes. The cash recipients were within 300% of the federal poverty level, with average incomes of less than $29,000. A control group of 2,000 participants received $50 a month for their contributions.

Basic income recipients spent more money, the study found, with their extra dollars going toward essentials like rent, transportation and food.

Researchers also studied the free money's effect on how much recipients worked, and in what types of jobs. They found that recipients of the cash transfers worked 1.3 to 1.4 hours less each week compared with the control group. Instead of working during those hours, recipients used them for leisure time. 

"We observed moderate decreases in labor supply," Eva Vivalt, assistant professor of economics at the University of Toronto and one of the study's principal investigators, told CBS MoneyWatch. "From an economist's point of view, it's a moderate effect." 

More autonomy, better health

Vivalt doesn't view the dip in hours spent working as a negative outcome of the experiment, either. On the contrary, according to Vivalt. "People are doing more stuff, and if the results say people value having more leisure time — that this is what increases their well-being — that's positive." 

In other words, the cash transfers gave recipients more autonomy over how they spent their time, according to Vivalt. 

"It gives people the choice to make their own decisions about what they want to do. In that sense, it necessarily improves their well-being," she said. 

Researchers expected that participants would ultimately earn higher wages by taking on better-paid work, but that scenario didn't pan out. "They thought that if you can search longer for work because you have more of a cushion, you can afford to wait for better jobs, or maybe you quit bad jobs," Vivalt said. "But we don't find any effects on the quality of employment whatsoever."

Uptick in hospitalizations

At a time when even Americans with insurance say they have trouble staying healthy because they struggle to afford care , the study results show that basic-income recipients actually increased their spending on health care services. 

Cash transfer recipients experienced a 26% increase in the number of hospitalizations in the last year, compared with the average control recipient. The average recipient also experienced a 10% increase in the probability of having visited an emergency department in the last year.

Researchers say they will continue to study outcomes of the experiment, as other cities across the U.S. conduct their own tests of the concept.

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.

More from CBS News

Southwest brings back Companion Pass buy-one, get-one-free promotion

Some Social Security recipients won't get September checks. Here's why.

These are the best and worst places to retire in the U.S.

3 simple money moves that could pay off this Labor Day

We need your support today

Independent journalism is more important than ever. Vox is here to explain this unprecedented election cycle and help you understand the larger stakes. We will break down where the candidates stand on major issues, from economic policy to immigration, foreign policy, criminal justice, and abortion. We’ll answer your biggest questions, and we’ll explain what matters — and why. This timely and essential task, however, is expensive to produce.

We rely on readers like you to fund our journalism. Will you support our work and become a Vox Member today?

• Future Perfect

The first results from the world’s biggest basic income experiment

Money always helps, but for the very poor, one lump sum can last a long time.

by Dylan Matthews

Large sections of my brain that could contain useful knowledge are instead filled up with dumb tweets I saw years ago. One of my absolute favorites was someone identifying himself only as “Side Hustle King,” who would ask his followers, “Would you rather get paid $1,000,000 right now or $50 every month for the rest of your life? I’ll take Option B. That’s what passive income is.”

To save you some arithmetic: Unless you plan to live at least another 1,667 years (which is what it would take to make $1 million in $50 monthly increments) and do not care about inflation, Side Hustle King is mistaken. Option A is far better. It’s a case in point that, sometimes, you should take the lump sum, not regular payments.

GiveDirectly , a charitable nonprofit that sends cash directly to low-income households, has identified another such case, one where the answer was a little less obvious. For years now, GiveDirectly has been conducting the world’s largest test of basic income : It is giving around 6,000 people in rural Kenya a little more than $20 a month, every month, starting in 2016 and going until 2028. Tens of thousands more people are getting shorter-term or differently structured payments.

Explore the big, complicated problems the world faces and the most efficient ways to solve them. Sent twice a week.

One of the big questions GiveDirectly is trying to answer is how to direct cash to low-income households. “Just give cash” is a fun thing to say, but it elides some important operational details. It matters whether someone gets $20 a month for two years or $480 all at once. Those add up to the same amount of money; this isn’t a Side Hustle King situation. But how you get the money still matters. A certain $20 every month can help you budget and take care of regular expenses, while $480 all at once can give you enough capital to start a business or another big project.

The case for giving all the money upfront

The latest research on the GiveDirectly pilot, done by MIT economists Tavneet Suri and Nobel Prize winner Abhijit Banerjee , compares three groups: short-term basic income recipients (who got the $20 payments for two years), long-term basic income recipients (who get the money for the full 12 years), and lump sum recipients, who got $500 all at once, or roughly the same amount as the short-term basic income group. Suri and Banerjee shared some results on a call with reporters this week.

By almost every financial metric, the lump sum group did better than the monthly payment group. Suri and Banerjee found that the lump sum group earned more, started more businesses, and spent more on education than the monthly group. “You end up seeing a doubling of net revenues” — or profits from small businesses — in the lump sum group, Suri said. The effects were about half that for the short-term $20-a-month group.

The explanation they arrived at was that the big $500 all at once provided valuable startup capital for new businesses and farms, which the $20 a month group would need to very conscientiously save over time to replicate. “The lump sum group doesn’t have to save,” Suri explains. “They just have the money upfront and can invest it.”

Intriguingly, the results for the long-term monthly group, which will receive about $20 a month for 12 years rather than two, had results that looked more like the lump sum group. The reason, Suri and Banerjee find, is that they used rotating savings and credit associations (ROSCAs). These are institutions that sprout up in small communities, especially in the developing world, where members pay small amounts regularly into a common fund in exchange for the right to withdraw a larger amount every so often.

“It converts the small streams into lump sums,” Suri summarizes. “We see that the long-term arm is actually using ROSCAs. A lot of their UBI is going into ROSCAs to generate these lump sums they can use to invest.”

I visited one of the villages receiving the 12-year UBI back in October 2016, and even then I observed people putting together ROSCAs and making plans to accumulate cash to invest. Edwine Odongo Anyango, a father of two and handyman who was 29 at the time, told me he had formed a ROSCA with 10 friends. “The monthly thing is not bad, but I think a lump sum payment would be better,” he told me. “That way you can do a big project at once.”

But I was surprised by just how often this attitude was reflected in Suri and Banerjee’s data. They found that the smallest increase in consumption — in actual regular spending on things like food and clothing — was in the long-term UBI group, which you might think is the group most able to spend a bit more every month. For the most part, they don’t do that: They invest the money instead.

The advantages of monthly

As you might expect, given how entrepreneurially minded the recipients are, the researchers found no evidence that any of the payments discouraged work or increased purchases of alcohol — two common criticisms of direct cash giving. In fact, so many people who used to work for wages instead started businesses that there was less competition for wage work, and overall wages in villages rose as a result.

And they found one major advantage for monthly payments over lump sum ones, despite the big benefits of lump sum payments for business formation. People who got monthly checks were generally happier and reported better mental health than lump sum recipients. “The lump sum group gets a huge amount of money and has to invest it, and this might cause them some stress,” Suri speculates. In any case, the long-term monthly recipients are happiest of all, and “some of that is because they know it’s going to be there for 12 years ... It provides mental health benefits in a stability sense.”

I think this points to the takeaway from this research not being “just give people a lump sum no matter what.” Ideally, you could ask specific people how they would prefer to get money. For instance, if you were a Kenya politician designing a basic income policy on a permanent basis, you could design it such that a recipient could opt into a $500 payment every two years or a $20 payment every month.

But barring that, long-term monthly payments seem to offer the best of all worlds because they enable people to use ROSCAs to generate lump sum payments when they want them. That enables flexibility: People who want monthly payments can get them, and people who need cash upfront can organize with their peers to get that.

Most Popular

• The state of the 2024 race, explained in 7 charts
• America isn’t ready for another war — because it doesn’t have the troops
• What the polls show about Harris’s chances against Trump
• Two astronauts are stranded in space. This one is jealous.
• Take a mental break with the newest Vox crossword

Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.

This is the title for the native ad

More in Future Perfect

Gavin Newsom could decide the future of AI safety. But will he cave to billionaire pressure?

Organ companies are getting up to pancreas hijinks.

Are tech companies actually pushing AI down our throats?

California legislator Scott Wiener on why the home of the AI industry is the right place to regulate it.

Some tech leaders think SB 1047 will kill innovation. It won’t.

A new generation of drugs promised salvation from hepatitis B and C. What went wrong?

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

• View all journals
• Explore content
• About the journal
• Publish with us
• Sign up for alerts
• 10 July 2020

Pandemic speeds largest test yet of universal basic income

• Carrie Arnold

You can also search for this author in PubMed   Google Scholar

Spain’s government has started what might just be remembered as the world’s biggest economics experiment. On 15 June, spurred by the coronavirus crisis and its economic fallout, it launched a website offering monthly payments of up to €1,015 (US$1,145) to the nation’s poorest families.

Access options

Access Nature and 54 other Nature Portfolio journals

Get Nature+, our best-value online-access subscription

24,99 € / 30 days

cancel any time

Subscribe to this journal

Receive 51 print issues and online access

185,98 € per year

only 3,65 € per issue

Rent or buy this article

Prices vary by article type

Prices may be subject to local taxes which are calculated during checkout

Nature 583 , 502-503 (2020)

doi: https://doi.org/10.1038/d41586-020-01993-3

Reprints and permissions

Related Articles

Carbon pricing reduces emissions

News & Views 24 JUL 24

Megastudy shows that reminders boost vaccination but adding free rides does not

Article 26 JUN 24

Extending the Sustainable Development Goals to 2050 — a road map

Comment 17 JUN 24

Faculty and Research Positions, Postdoctoral Recruitment

Jointly sponsored by the Hangzhou Municipal People's Government and the University of Chinese Academy of Sciences.

Hangzhou, Zhejiang, China

Hangzhou Institute of Advanced Study, UCAS

Associate or Senior Editor, Nature Energy

Job Title: Associate or Senior Editor, Nature Energy Location: New York, Jersey City, Philadelphia or London — Hybrid Working Application Deadline:...

New York City, New York (US)

Springer Nature Ltd

Faculty Positions & Postdocs at Institute of Physics (IOP), Chinese Academy of Sciences

IOP is the leading research institute in China in condensed matter physics and related fields. Through the steadfast efforts of generations of scie...

Beijing, China

Institute of Physics (IOP), Chinese Academy of Sciences (CAS)

FACULTY POSITION IN THE MOLECULAR BIOLOGY OF REPRODUCTION

Dallas, Texas (US)

The University of Texas Southwestern Medical Center (UT Southwestern Medical Center)

FACULTY RECRUITING IN GENE REGULATION

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Quick links

• Explore articles by subject
• Guide to authors
• Editorial policies

Basic Income Experiments

• UBI Cities Toolkit
• UBI Research Visualization

Thanks for signing up!

You can unsubscribe at any time using the Unsubscribe link at the bottom of every email.

Sorry, we could not complete your sign-up. Please contact us to resolve this.

Breathing Space: One church’s experiment with guaranteed minimum income

A church offered a “guaranteed gift” of $500 per month for a year to two neighbor-partners as a way to respect recipients’ dignity and give them more agency.

Churches are known as places people can turn to for help in hard moments. Every pastor I know has had a hand in distributing a variety of resources: groceries, diapers, gas cards for stranded travelers. Congregants buy Christmas presents to share or collect gift cards so people can shop for their own families.

Churches also pay bills, for water, electricity, rent. If we’re lucky, those bills aren’t yet overdue when we see them. But more often, in my experience, neighbors bring in bills when they finally have no choice but to acknowledge that they’re not going to be able to clear the debt on their own.

They’re facing the threat of a cold, dark home. Or they’re on the brink of eviction, facing a bill that, with compounded interest and late fees, has ballooned far beyond its original amount. They’re feeling desperate.

Churches try to ease that desperation by dipping into what are often called benevolence funds. In the Episcopal Church, they’re known as clergy discretionary funds, to be used — as the name implies — as clergy see fit, but only for what our canon law calls “pious and charitable purposes.”

In the parish I most recently served, St. Luke’s Episcopal Church in Durham, North Carolina, I was fortunate to have a sizable discretionary fund. Parishioners’ generosity ensured that funds in the low five figures flowed through it annually. I was also fortunate to have a lay partner in distributing those funds.

When I arrived at St. Luke’s in early 2022, Jan Sweet Freeman, a retired clinical psychologist, had already served a couple of years as the parish almoner — an ancient term for one who distributes assistance on behalf of a Christian community.

Jan and I quickly developed an excellent working relationship, and we realized we shared some of the same frustrations in assisting our neighbors. Some of our frustrations were practical. We devoted hundreds of dollars to bills that had often started out below $100. We knew that rising rents and other costs combined with too-low wages make it impossible for many working people ever to get ahead of their bills.

Today, workers in Durham County must earn $31.37 per hour , 40 hours a week, to rent a typical two-bedroom apartment without devoting more than 30% of their income to housing. This means that someone earning the minimum wage of $7.25 per hour would have to work more than four full-time jobs to reach this standard — a physical impossibility.

Our frustrations were also spiritual. People needing assistance believed they needed to show Jan and me deference in order to receive the assistance we could unilaterally bestow or withhold. Unfortunately, they had learned this from experience. We knew such an inequitable balance of power did not match God’s vision for these relationships, and we knew it could corrode our souls by giving us a false and dangerous sense of our own benevolence or superiority.

So we looked for a new way to manage my discretionary fund that would, in Jan’s words, “respect everyone’s dignity and give our neighbors more agency.” We were intrigued by programs in which governments offered a guaranteed minimum income — like Durham’s Excel pilot program and the program in Stockton , California, on which it was based, as well as Canada’s Emergency Response Benefit of 2020.

Our situation was obviously different, as a church rather than a government. But we realized we had the means to offer a “guaranteed gift” of $500 per month for a year to two neighbor-partners (the term we landed on for recipients) in a new venture we called “Breathing Space.” The name came from our desire to take a little economic pressure off these neighbor-partners, to give them room to breathe.

We launched Breathing Space knowing we already had enough money in the clergy discretionary fund to cover one year. That reserve was vital; we had to be able to keep our word. We offered Breathing Space to neighbor-partners we already knew who believed $500 a month would make a tangible difference in their quality of life. One was a man, one a woman. Both were employed single parents whose wages and public benefits didn’t cover their household needs, no matter how carefully they budgeted and scrimped.

Jan and I committed to giving them the promised amount, with no strings attached and no questions asked, to use as they wished. One neighbor-partner elected to receive the gift in a lump sum, to spend on a more reliable car, while the other took the monthly payment. Before payments could start, we had to manage a logistical hurdle: the fact that neither neighbor-partner had a bank account, a not-uncommon reality among people with low incomes. We settled on giving monthly gifts through a cash gift card or through direct payments to the neighbor-partner’s landlord (at the neighbor-partner’s request).

Jan and I knew Breathing Space could not succeed without the parish’s support. So before launching the initiative, we shared our vision with the congregation in a series of steps.

First, we spoke to the vestry (lay board) and received their full support.

Then I called the discretionary fund’s donors to fill them in. The response was universally positive. Most saw Breathing Space as a logical extension of why they gave to the fund: an opportunity to assist local neighbors directly.

One member shared the story of having been homeless as a child; memories of receiving assistance from strangers made that donor love Breathing Space. Another compared Breathing Space to a small inheritance she had received, noting, “I never accounted to anyone for how I spent that; I trust our neighbors to do what’s best for them.”

Some wondered: could a church member be a Breathing Space neighbor-partner? Absolutely, I answered. That wasn’t the case this time, but it certainly could be in future.

Finally, Jan and I held open meetings for church members. The most frequently asked question was about what we would tell people who requested occasional help, since Breathing Space would consume the bulk of the discretionary fund. We addressed this concern in a few ways. First, parishioners continued to donate to our small food pantry, which was open to anyone who called for assistance.

Second, Jan called the people we had regularly helped to let them know our system was changing. Fortunately, we had the funds to give these neighbors some assistance, like money for school supplies, before starting Breathing Space. And as things turned out, we did sometimes have more in the discretionary fund than we needed to cover Breathing Space. We then distributed that surplus.

St. Luke’s worked with one of our original Breathing Space neighbor-partners for one year and with the other for a second year. The latter is on somewhat firmer footing today and affirms, “You really did give me breathing space.”

For the other, Breathing Space seems to have made little appreciable difference in overcoming financial challenges. Like millions across the country, both neighbor-partners still cope daily with the reality that working-class wages are not keeping pace with the cost of living.

I no longer serve that parish, and I understand that this experiment has come to an end. Still, the pilot project was one I would gladly reproduce. Perhaps your congregation — alone or in partnership with others — would like to try it too.

Did you enjoy this article? 

Get more stories like this delivered to your inbox every other week.  Sign up for the Faith & Leadership newsletter .

Related Articles

Rhonda mawhood lee: tips for congregations from an overnight walk in manhattan.

An Episcopal priest spent all night walking through Manhattan in a fundraiser for the American Foundation for Suicide Prevention. Along the way, she picked up some lessons for congregations about hospitality, fellowship, faith and stewardship.

Subverting assumptions about age, experience and wisdom

A priest anticipating her last decade in full-time ministry writes about the intentional choice of a mentor who is a generation younger.

More on Missions & Community

Millions of tourists flock to montgomery to learn history, but past inequalities remain.

A pastor in Montgomery, Alabama, reflects on the tourism paradox: Visitors interested in civil rights and racial justice are flocking to the city’s museums and monuments, boosting its economy. Meanwhile systemic inequities remain.

Do not swim alone, and other lessons for the church

A warning sign on a North Carolina beach reminds us that navigating life without community can put people in dangerous situations.

Another small liberal arts college has closed, but this time it was mine

A graduate of Birmingham-Southern College reflects on the sudden closing of the school, and why it matters to the thousands of students who went there over the years.

More on Congregations

Faith partners fight against ‘heat islands’: how a coalition works to lower temperatures and decrease flooding in cities.

A church and a faith-based institute join a coalition that helps people create cooler, safer neighborhoods where residents can thrive.

Six ways small churches can help us stay human during election season

Small churches may seem irrelevant during critical elections of international consequence. But these local congregations have much to teach us about staying human, says a Quaker pastor. 

Three historic Black churches come together to make a new congregation

When a fire destroyed a historic Philadelphia church building, the congregation merged with two others to form New River Presbyterian Church, dedicated to loving God and serving their neighborhood.

More on Money

Jonathan wilson-hartgrove: mobilizing the poor can help fix america.

Believing myths related to poverty and whom it affects has prevented Americans from constructing a society that works for everyone, authors of a recent book say.

A church offers training in faith and finance

Kingdom Fellowship AME Church helps its members thrive through financial literacy classes that help build economic stability and faithful generosity.

My ancestor was an enslaver. Here’s how I’m making reparations.

A graduate of Harvard Divinity School writes about her family’s history — which includes an ancestor active in the enslavement of Black people — and how she is taking reparative action.

• Share on Facebook
• Share on Twitter
• Share with Email

Map your community data

This tool from Association of Religion Data Archives (ARDA) will generate a custom report of housing, family structure, population changes, and other economic indicators and then summarize how to interpret the data for outreach efforts.

Weakening Farm Income Prospects Weigh On Farmer Sentiment

James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture

A breakdown on the Purdue/CME Group Ag Economy Barometer August results can be viewed at https://purdue.ag/barometervideo . Find the audio podcast discussion for insight on this month’s sentiment at https://purdue.ag/agcast .

Download report (pdf)

In a sharp turnaround from July, farmer sentiment nose-dived in August. The August  Purdue University-CME Group Ag Economy Barometer  fell 13 points vs. July, leaving the index at 100, while the  Index of Current Conditions  fell 17 points to 83, and the  Index of Futures Expectations  shed 11 points to a reading of 108. Weakening farm income prospects weighed on farmer sentiment as the outlook for a bountiful fall harvest were more than offset by declining crop prices. This month’s decline in the barometer takes farmer sentiment back to the average level observed from fall 2015 to winter 2016, a period when farm incomes were declining sharply. The weakness in farmer sentiment could indicate that farmers expect this year’s farm income downturn to last for an extended period. Data collection for the August survey took place from August 12-16, 2024.

Over the last several months, farmers’ concerns about weakening commodity prices have become more evident in barometer surveys. In the August survey, producers’ concerns about commodity prices nearly eclipsed what has consistently been their top concern: high input prices. This month, 30% of respondents picked lower commodity prices as a top concern compared to 33% who chose high input costs. This was a marked departure from a year earlier when just 20% of survey respondents pointed to weak commodity prices as a top concern for their farm operation. At the same time, fewer respondents chose rising interest rates as a top concern. This month, 17% of respondents pointed to interest rates as a top issue, down from 24% a year ago. In a related question, two-thirds (68%) of respondents said they expect interest rates to fall during the upcoming year, while only 19% said they look for rates to rise.

The August  Farm Financial Performance Index  fell 9 points below a month earlier and was 14 points lower than a year ago. This month’s reading was the weakest response to the financial performance question since July 2020, when COVID-related lockdowns still dominated the headlines. Consistent with expectations for weak financial conditions, producers again signaled that the investment climate in production agriculture is also poor as the  Farm Capital Investment Index  fell 7 points to 31. This month’s investment index was also 6 points lower than a year earlier and matched the index’s all-time lowest reading.

Producers’ perspective on farmland values weakened considerably in August compared to July as the  Short-Term Farmland Value Expectations Index  fell 13 points to 105. This month’s decline left the investment index 21 points below a year ago and 41 points below three years ago when the index was near its peak. The sharp turnabout in the index this month was primarily attributable to an increase in the percentage of producers who think farmland values will decline in the next year, which rose from 13% in July to 24% in August. The long-term farmland index also weakened, falling 4 points below July’s index to a reading of 142. 

Despite concerns about the farm income outlook, most farmers in our survey still say they expect farmland cash rental rates for the 2025 crop year to remain unchanged. This month, 70% of U.S. crop farmers in our survey said they expect farmland cash rental rates to stay about the same, with just 16% of respondents reporting that they anticipate declining lease rates.

Wrapping Up

Farmer sentiment weakened sharply in August as the  Ag Economy Barometer  index fell 13 points compared to July. The August reading of 100 places farmer sentiment on par with sentiment in late 2015 and early 2016 when the U.S. ag economy was in the early stages of a downturn. Farmers were most pessimistic about near-term conditions, as the current index fell 17 points below a month earlier. Sentiment weakness was driven by expectations for weak farm financial performance and extended to a weak outlook for capital expenditures by farm operations. Although the short-term farmland index remained above 100, signaling that more survey respondents still expect values to rise over the next year than look for values to decline, it’s clear that farmers are less optimistic about farmland values this summer than in recent years. Notably, the short-term farmland index posted its lowest reading since spring 2020. Despite the weakness in farmer sentiment and expectations for weak farm financial performance, 70% of crop farmers in this month’s survey said they expect farmland cash rental rates to remain about the same in 2025 as in 2024.

16 states and DC have active guaranteed basic income programs that give residents cash, no-strings-attached

• Guaranteed basic income programs can help low-income participants afford necessities like rent.
• Over 100 US cities and counties have tried GBI, offering cash for housing and groceries. 
• Despite legislative opposition, basic income programs remain active across the country.

Ingrid Sullivan, 48, used her cash from the San Antonio guaranteed basic income program to rent a home where her grandchildren can play in the yard. And Atlanta resident Shamarra Woods, 31, used her basic income to pay bills and afford day care for her toddler.

For 46-year-old Jennette Fisher, $500 a month allowed her to sign an apartment lease in a quiet Chicago suburb with her daughter.

"It took such a weight off," Fisher previously told Business Insider . "If I wouldn't have had that money, I don't know what would have happened."

Guaranteed basic income has become an increasingly popular poverty-solution strategy in US cities. Over 100 municipalities have tried the GBI model since 2019, offering low-income participants between $50 and $2,000 a month, no strings attached, for a set time period.

What makes basic income different from traditional social services is the element of choice. Participants told BI they spent the money where they needed it most: on housing , groceries , transportation, and debt repayment.

Typically, participants fall below the federal poverty line. However, some programs have also focused on specific populations such as new and expecting mothers, households with children, or people experiencing homelessness.

Basic income pilots have been completed in cities and counties in Alabama, Virginia , Rhode Island, New Jersey, Mississippi , Louisiana, Indiana, Florida, North Carolina , South Carolina, Washington , Oklahoma, and more.

GBI continues to face legislative opposition from Republican lawmakers who have called the programs "socialist" and say they discourage low-income people from entering the workforce.

For example, Iowa passed a ban on GBI in April, and the Arizona House of Representatives voted to ban basic income in February. On April 23, the Texas Supreme Court placed a temporary block on a Houston-area program that the attorney general called "unconstitutional."

Despite these political challenges, basic-income programs continue to be active across the country. Here's a breakdown of states, listed in alphabetical order, where cash payments being offered to low-income residents.

Location: Los Angeles Program name: Breathe Duration: June 2022 - August 2025 Income amount: $1,000 every month for three years Number of participants: 1,000 low-income households

Location: Long Beach Program name: Long Beach Pledge Duration: Spring 2024 - spring 2025 Income amount: $500 a month for 12 months Number of participants: 200 low-income households with children

Location: Mountain View Program name: Elevate MV Duration: December 2022 - December 2024 Income amount: $500 a month for 24 months Number of participants: 166 low-income parents

Location: Sonoma County Program name: Pathway to Income Equity Duration: January 2023 - January 2025 Income amount: $500 a month for 24 months Number of participants: 305 low-income families

Location: Pomona Program name: Pomona Household Universal Grants Pilot Duration: Summer 2024 - spring 2026 Income amount: $500 a month for 18 months Number of participants: 250 low-income families with children under 4 years old

Location: Humboldt County Program name: Humboldt Income Program Duration: On a rolling basis, beginning December 2023 Income amount: $920 a month for 18 months Number of participants: 150 low-income pregnant people

Previous basic income pilots have been run in Stockton , San Francisco , Marin County , Sacramento, Compton, Oakland, Santa Clara, San Diego, and more. In 2021, the state pledged $35 million for more GBI pilots over five years, and a bill being heard in the California Senate could provide GBI starting in August 2025 for students experiencing homelessness.

Location: Denver Program name: The Denver Basic Income Project Duration: November 2022 - summer 2024 Income amount: Participants were divided into three groups: One receives $1,000 a month for a year; another receives $6,500 up front and then $500 a month from there; and another gets $50 a month. Number of participants: 800 unhoused individuals

Location: Boulder Program name: Elevate Boulder Duration: January 2024 - January 2026 Income amount: $500 a month for two years Number of participants: 200 low-income households

Location: Atlanta , southwest Georgia, and the City of College Park Program name: In Her Hands Duration: First pilot was 2022 - 2024, second pilot began spring 2024 Income amount: Average payments of $850 a month over 24 months for the first round Number of participants: 650 low-income Black women

Location: Cook County Program name: The Cook County Promise Duration: December 2022 - December 2024 Income amount: $500 a month for 24 months Number of participants: 3,250 low- to moderate-income families

Location: Evanston Program name: Guaranteed Income Program Duration: First round ran December 2022 - December 2023, second round begins summer 2024 Income amount: $500 a month for one year Number of participants: 150 low-income families

Location: Statewide Program name: Empower Parenting with Resources Duration: fall 2024 - fall 2026 Income amount: Monthly payments for a year dependent on each participant's income and local cost of living Number of participants: 400 families involved in the child welfare system

Chicago previously ran the Chicago Resilient Communities Pilot , providing basic income for 5,000 residents, and has set aside $32 million to relaunch the program . Open AI CEO Sam Altman also sponsored a GBI program beginning in 2019 that gave 3,000 Texas and Illinois residents $1,000 a month for three years.

Location: Indianapolis Program name: Rooted School: $50 Study Duration: Two phases, running fall 2022 - summer 2024 Income amount: $50 a week for the 40-week academic year Number of participants: Over 450 high school students between New Orleans and Indianapolis pilots

An earlier GBI program in Indianapolis gave 15 participants $500 monthly for 18 months ending in spring 2022.

Location: Polk, Dallas, and Warren counties Program name: UpLift – The Central Iowa Basic Income Pilot Duration: May 2023 - spring 2026 Income amount: $500 a month Number of participants: 110 low-income households

Location: New Orleans Program name: Rooted School: $50 Study Duration: Two phases, running fall 2022 - summer 2024. The city has set aside funding to expand program over the next three years. Income amount: $50 a week for the 40 week academic year Number of participants: Over 450 high school students between New Orleans and Indianapolis pilots

A previous program in Shreveport gave 110 single parents $660 monthly for a year ending in February 2023. The New Orleans Guaranteed Income Program also gave 125 young people disconnected from work or school $350 monthly between spring 2022 and spring 2023.

Massachusetts

Location: Somerville Program name: The Somerville Guaranteed Basic Income Program Duration: July 2024 - July 2025 Income amount: $750 a month for 12 months Number of participants: 200 low-income families

Basic income programs were previously run in Boston , Chelsea, and Cambridge.

Location: Ann Arbor Program name: Guaranteed Income to Grow Ann Arbor Duration: January 2024 - December 2025 Income amount: $528 a month for 24 months Number of participants: 100 low-income entrepreneurs

Location: Flint Program name: Rx Kids Duration: January 2024 - spring 2025 Income amount: $1,500 lump sum, then $500 monthly payments during the first year of a baby's life Number of participants: 1,200 new and expectant mothers

Mississippi

Location: Jackson Program name: Magnolia Mother's Trust Duration: 12 months per pilot, ongoing Income amount: $1,000 a month Number of participants: Over 400 low-income Black mothers since fall 2018

Location: St. Louis Program name: STL Guaranteed Basic Income Pilot Duration: Fall 2023 - spring 2025, but a lawsuit temporarily blocked payments in July Income amount: $500 a month for 18 months. Number of participants: 540 low-income families with children

Location: New York City, Rochester, and Buffalo Program name: The Bridge Project Duration: June 2021 - ongoing Income amount: Up to $1,000 a month for three years Number of participants: 1,200 low-income mothers

Location: Hudson Program name: HudsonUP Duration: Five years, with staggered cohorts launched in fall 2020, 2021, and 2023 Income amount: $500 a month for 5 years Number of participants: 128 households

A 17-month program in Ulster County that provided basic income to 100 households ended in September 2022, and another program in Ithaca gave a full year of cash payments to unpaid caregivers through May 2023. The nonprofit Creative Rebuild New York also ran an 18-month GBI pilot for artists impacted by the pandemic, which ended in early 2024.

Location: Portland Program name: Black Resilience Fund Duration: January 2023 - spring 2026 Income amount: Up to $2,000 a month for three years Number of participants: 25 Black households in Multnomah county

This November, Oregonians will also vote on a universal basic income proposal to give all state residents $750 a year through taxing corporations.

Pennsylvania

Location: Philadelphia Program name: PHILHousing+ Duration: Fall 2022 - spring 2025 Income amount: $89 to $2,079 a month for 30 months, depending on household income Number of participants: 300 renter households from the Philadelphia Housing Authority's Housing Choice Voucher or public housing waitlist

Location: Philadelphia Program name: Philly Joy Bank Duration: Launched summer 2024 Income amount: $1,000 a month for 18 months Number of participants: 250 low-income pregnant people

Location: San Antonio Program name: UpTogether San Antonio Duration: Summer 2023 - December 2024 Income amount: $500 a month for 18 months Number of participants: 25 low-income families

Location: Harris County Program name: Uplift Harris Duration: Initially scheduled to begin in April 2024, but delayed because of the Texas Supreme Court ruling Income amount: $500 a month for 18 months Number of participants: 1,928 low-income households

An earlier San Antonio program offered $5,108 to 1,000 families over a 25-month period that began in December 2020. The Austin Guaranteed Income Pilot also gave participants $1,000 a month ending in May 2023. Additionally, Altman's GBI program that began in 2019 gave 3,000 Texas and Illinois residents $1,000 a month for three years.

Location: Richmond Program name: Richmond Resilience Initiative Duration: Several cohorts, beginning October 2020 - spring 2025 Income amount: $500 a month for 24 months Number of participants: 94 low-income families with children

Location: Alexandria Program name: Alexandria Recurring Income for Success and Equity Duration: Spring 2023 - spring 2025 Income amount: $500 a month for 24 months Number of participants: 170 low-income individuals

Washington DC

Location: Washington DC Program name: CashRx Duration: November 2023 - fall 2024 Income amount: Participant's choice, an average of $1,400 a month Number of participants: 10 low-income individuals participating in the nonprofit Bread for the City's healthcare program.

A previous pilot in DC — THRIVE East of the River — provided basic income to 500 low-income households between 2020 and 2021.

Is there an active basic income program that isn't on this list? Have you benefited from a basic income program? Reach out to this reporter at [email protected] .

Correction: April 29, 2024 — An earlier version of this story incorrectly stated the end date of the Guaranteed Income to Grow Ann Arbor program.

• Main content

• Skip to main content
• Keyboard shortcuts for audio player

Planet Money

• LISTEN & FOLLOW
• Apple Podcasts
• Amazon Music

Your support helps make our show possible and unlocks access to our sponsor-free feed.

The Universal Basic Income experiment in Kenya

Dave Blanchard

Amanda Aronczyk

Emma Peaslee

There's this fundamental question in economics that has proven really hard to answer: What's a good way to help people out of poverty? The old-school way was to fund programs that would support very particular things, like buying cows for a village, giving people business training, or building schools.

But over the past few decades, there has been a new idea: Could you help people who don't have money by ... just giving them money? We covered this question in a segment of This American Life that originally ran in 2013 . Economists who studied the question found that giving people cash had positive effects on recipients' economic and psychological well-being. Maybe they bought a cow that could earn them money each week. Maybe they could replace their grass roofs with metal roofs that didn't need fixing every so often.

Episode 480: The Charity That Just Gives People Money

The success of just giving people in poverty cash has spawned a whole set of new questions that economists are now trying to answer. Like, if we do just give money, what's the best way to do that? Do you just give it all at once? Or do you dole it out over time? And it turns out... a huge new study on giving cash was just released and it's got a lot of answers.

• I Was Just Trying To Help - This American Life 
• The Charity That Just Gives People Money - Planet Money 
• What Happens When You Just Give Money To Poor People? Planet Money  
• Short-term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya - The Quarterly Journal of Economics
• Results From The City That Just Gave Away Cash - Planet Money 
• The Basic Income Experiment - Planet Money 
• People can do more with lump sum of money than payments, experiment in Kenya suggests - NPR 
• Early findings from the world's largest UBI study - GiveDirectly

This episode is hosted by Dave Blanchard and Amanda Aronczyk. The reporting for the first part of this episode was originally done for This American Life by Jacob Goldstein and David Kestenbaum. Our show today was produced by Emma Peaslee. It was edited by Jess Jiang, fact-checked by Sierra Juarez and engineered by Cena Loffredo. Alex Goldmark is Planet Money's executive producer.

Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney .

Always free at these links: Apple Podcasts , Spotify , Google Podcasts , the NPR app or anywhere you get podcasts.

Find more Planet Money: Facebook / Instagram / TikTok / Our weekly Newsletter .

Music: NPR Source Audio - "Race to Nowhere," "Spanish Fruit," and "Spanish Fire"

Advertisement

Tens of thousands of MBTA riders to qualify for half-price fares

Copy the code below to embed the wbur audio player on your site.

<iframe width="100%" height="124" scrolling="no" frameborder="no" src="https://player.wbur.org/news/2024/09/03/boston-mbta-reduced-income-ticket-prices-commuters"></iframe>

• Andrea Perdomo-Hernandez

The MBTA is set to launch a new reduced fare program this week, dramatically widening the pool of people who qualify and potentially cutting transit costs in half for about 60,000 riders.

In the past, the T offered reduced fares only to seniors, people with disabilities or those under age 25 with low incomes. The new program expands access to all adults provided their incomes fall below a certain level.

“We know that public transit is absolutely critical for lower income households,” said Lynsey Heffernan, the transit authority’s chief of policy and strategic planning. She said rider surveys show that “many of them don’t have access to a car, that we are their primary mode and we know affordability is an issue.”

Heffernan said the new fare program, which the T calls the " income-eligible reduced fare program ," will allow for half-price fares on the commuter rail, bus, subway, ferry and The Ride, the T’s door-to-door transit service for people with disabilities.

Adults with incomes at or below 200% of the federal poverty level can qualify — that’s $30,120 a year for a single person or $62,400 for a family of four.

Oscar Torres, 46, is a frequent T user who's among those already benefiting from lower fares because of a disability . He catches the bus on Huntington Avenue near several of Boston's big medical centers and relies on the T to get to church, doctor’s appointments, social services and food pantries. He also takes the bus to his father’s house, where Torres is a caregiver.

“Honestly, I don't make much money. I'm very sick, I have a lot of health issues,” Torres said. “I'm grateful that I have a low-income bus pass. That helps me to survive.”

Transit advocates have for years called on the T to expand its low-income fare program. Jarred Johnson, executive director of the nonprofit TransitMatters, called the program a "hard fought victory," that will "dramatically expand access to public transit for a lot of low-income folks."

Starting Wednesday, Sept. 4, riders who meet the new requirements can apply for the reduced price passes. T officials said they hope thousands will do so. To qualify, applicants must already be signed up for another income-based benefit, like MassHealth, the state's Medicaid program, or the Supplemental Nutrition Assistance Program (SNAP).

Applications can be completed online or in-person at offices of the nonprofit Action for Boston Community Development (ABCD). The organization plans to assist applicants at its offices in downtown Boston, Dorchester, East Boston, Mattapan and Mystic Valley, and hopes to provide similar services at 36 offices throughout eastern Massachusetts.

To check eligibility, the T will rely on data from the Registry of Motor Vehicles and other state agencies that offer benefits.

“If we find their [applicants’] information, both in the RMV's database and the office of Health and Human Services database, they're instantly approved for the program,” said Marissa Rivera, the T’s deputy director of reduced fare programs. “In testing that flow with riders, we’ve seen that it takes about a minute to get approved.” Rivera estimated that about 80% of applicants will be served that way.

Applicants who do not have an RMV-issued form of identification can upload a photo of their identification and submit eligibility documents using the online application. “Those applications are reviewed within two business days,” Rivera said.

Sharon Scott-Chandler, ABCD’s chief executive, encouraged people who think they may be eligible for the MBTA program to visit an ABCD location, even if they are not signed up for any other income-based benefits.

“If folks are not on one of the designated state benefit programs, we can actually get them onto SNAP; we can actually help them access MassHealth,” Scott-Chandler said. “And so thereby making them eligible for the T pass as well.”

Some riders, like East Boston resident Lissi Guerrero, plan to apply immediately.

Speaking in Spanish, she told WBUR she was excited to learn the T was creating a reduced fare program she would qualify for. A mother of four, Guerrero said her family travels downtown for doctor's appointments and other errands, and she often has just enough money to cover their trip.

“Making transportation more affordable will help me a lot,” she said. “Not having to worry about finding a ride or hailing an expensive taxi to get around will be great.”

This segment aired on September 3, 2024.

• MBTA will offer half-price fares to low-income riders. Here's how the program would work
• Long live the passback: MBTA changes course on fare payment practice
• The MBTA's new contactless fare readers are now live. Here are some dos and don'ts

Andrea Perdomo-Hernandez Transportation Reporter Andrea Perdomo-Hernandez is a transportation reporter for WBUR.

More from WBUR

City of Boulder Offers E-bike Vouchers to Income-Qualified City Residents

For questions about the incentives, application portal or e-bike options, please visit the program webpage.

Aisha Ozaslan , Media Relations, 303-501-2318

Julie Causa , Media Relations, 719-396-1733

Annie Scott , Program Administrator, 303-413-7418

Registration opens at 9 a.m. on Sept. 16

This September, the City of Boulder is offering a limited number of vouchers for income-qualified city residents to pay for part of the cost of a new electric bicycle (e-bike). Through these incentives, the city seeks to expand access to e-bikes, encourage more sustainable ways of travel, and continue to better understand the role e-bikes play in advancing Boulder's climate and transportation goals.

The registration portal will be open from Monday, Sept. 16 at 9 a.m. through Monday, Sept. 30 at 11 a.m. and will be available on the program webpage . To qualify, participants need to be at or below 80% of the area median income for Boulder County . Participants will receive an email by Sept. 30 at 5 p.m. from [email protected] , the city’s contractor, confirming if they were randomly selected, waitlisted or will not receive a voucher during this round, along with next steps. Selected participants will have 96 hours to submit proof of city residence and income. If approved, they will receive a voucher and have 45 days to spend it.

Voucher amounts vary by e-bike type and income qualification. The 2024 vouchers provide larger discounts for the upfront cost of e-bikes, offering up to $2,100 for regular e-bikes and $2,700 for e-cargo bikes and adaptive e-bikes. To encourage safe, frequent use of new e-bikes, the city will also provide recipients with a $200 Starter Kit voucher to purchase bike equipment such as helmets, child seats and bike locks.

“We have seen a clear community need to offer targeted assistance for those who may find it difficult to purchase an e-bike without a discount,” shared Climate Initiatives Director Jonathan Koehn. “This program is one way we prioritize income equity as part of our climate actions, while also helping to improve air quality and community health through reduced vehicle pollution.”

Transportation and Mobility Interim Director Valerie Watson added, “We hope to better meet the individual transportation needs of our community with sustainable, convenient travel options, including by supporting community members making first- and last-mile connections to and from their destination.”

To support local businesses, vouchers will only be accepted at participating bike shops in Boulder County and are not valid for online purchases. A list of bike shops will be published on the city’s webpage in the coming weeks. E-bike incentives are funded by the city's Climate Tax and supported by a partnership with local nonprofit Community Cycles.

Visit the program webpage to learn more, access the media kit and sign up for updates on the E-bike Alerts email list .

Keep Reading

Boulder invites community to inform next phase of baseline road safety improvements.

August 9, 2024

Boulder Walk and Bike Month is Back this June

May 29, 2024

Boulder To Celebrate Annual Winter Bike To Work Day on Friday, Feb. 9

January 30, 2024

Boulder Launches “Share the Path” Courtesy Campaign as More People Roll Around Town

November 20, 2023

An official website of the United States government

Personal Income and Outlays, July 2024

• News Release
• Related Materials
• Additional Information

Personal income increased $75.1 billion (0.3 percent at a monthly rate) in July, according to estimates released today by the U.S. Bureau of Economic Analysis (tables 2 and 3). Disposable personal income (DPI), personal income less personal current taxes, increased $54.8 billion (0.3 percent) and personal consumption expenditures (PCE) increased $103.8 billion (0.5 percent).

The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent (table 5). Real DPI increased 0.1 percent in July and real PCE increased 0.4 percent; goods increased 0.7 percent and services increased 0.2 percent (tables 3 and 4).

The increase in current-dollar personal income in July primarily reflected an increase in compensation (table 2).

The $103.8 billion increase in current-dollar PCE in July reflected an increase of $59.3 billion in spending for services and $44.5 billion in spending for goods (table 2). Within services, the largest contributor to the increase was housing and utilities (led by housing). Within goods, the largest contributors to the increase were motor vehicles and parts as well as food and beverages. Detailed information on monthly PCE spending can be found on Table 2.4.5U .

Personal outlays —the sum of PCE, personal interest payments, and personal current transfer payments—increased $103.3 billion in July (table 2). Personal saving was $598.8 billion in July and the personal saving rate —personal saving as a percentage of disposable personal income—was 2.9 percent (table 1).

From the preceding month, the PCE price index for July increased 0.2 percent (table 5). Prices for goods decreased by less than 0.1 percent and prices for services increased 0.2 percent. Food prices increased 0.2 percent and energy prices increased by less than 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U .

From the same month one year ago, the PCE price index for July increased 2.5 percent (table 7). Prices for goods decreased by less than 0.1 percent and prices for services increased 3.7 percent. Food prices increased 1.4 percent and energy prices increased 1.9 percent. Excluding food and energy, the PCE price index increased 2.6 percent from one year ago.

The 0.4 percent increase in real PCE in July reflected an increase of 0.7 percent in spending on goods and an increase of 0.2 percent in spending on services (table 4). Within goods, the largest contributor to the increase was motor vehicles and parts. Within services, the largest contributor to the increase was health care. Detailed information on monthly real PCE spending can be found on Table 2.4.6U .

Updates to Personal Income and Outlays

Estimates have been updated for April through June 1 . Revised and previously published changes from the preceding month for current-dollar personal income, and for current-dollar and chained (2017) dollar DPI and PCE, are provided below for May and June.

BEA will release results from the 2024 annual update of the National Economic Accounts, which include the National Income and Product Accounts as well as the Industry Economic Accounts, on September 26, 2024. The update will present revised statistics for GDP, GDP by Industry, and gross domestic income. Updated monthly personal income and outlays will be released on September 27, along with the August 2024 estimate. For details, refer to Information on 2024 Annual Updates to the National, Industry, and State and Local Economic Accounts .

1 Revised wage and salary data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages program for January through March will be incorporated with the annual update of the National Economic Accounts on September 26, 2024.

*          *          *

Next release:  September 27, 2024, at 8:30 a.m. EDT Personal Income and Outlays, August 2024

Full Release & Tables (PDF)

Tables only (excel), release highlights (pdf), historical comparisons (pdf).

• Personal Income Lisa Mataloni  301-278-9083 [email protected]
• PCE Goods Kyle Brown 301-278-9086 [email protected]
• PCE Services Harvey Davis (301) 278-9719 [email protected]
• Media Connie O'Connell 301-278-9003 [email protected]

Additional Resources available at www.bea.gov :

• Stay informed about BEA developments by reading The BEA Wire , signing up for BEA's email subscription service , or following BEA on X, formerly known as Twitter @BEA_News .
• Historical time series for these estimates can be accessed in BEA's Interactive Data Application .
• Access BEA data by registering for BEA's Data Application Programming Interface (API).
• For more on BEA's statistics, see BEA's online journal, the Survey of Current Business .
• BEA's news release schedule
• NIPA Handbook : Concepts and Methods of the U.S. National Income and Product Accounts

Definitions

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

Disposable personal income  is the income available to persons for spending or saving. It is equal to personal income less personal current taxes. 

Personal consumption expenditures (PCE) is the value of the goods and services purchased by, or on the behalf of, "persons" who reside in the United States.

Personal outlays is the sum of PCE, personal interest payments, and personal current transfer payments.

Personal saving is personal income less personal outlays and personal current taxes.

The personal saving rate is personal saving as a percentage of disposable personal income.

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is, at "market value." Also referred to as "nominal estimates" or as "current-price estimates."

Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.

For more definitions, refer to the Glossary: National Income and Product Accounts .

Statistical conventions

Annual rates. Monthly and quarterly values are expressed at seasonally-adjusted annual rates (SAAR). Dollar changes are calculated as the difference between these SAAR values. For detail, refer to the FAQ " Why does BEA publish estimates at annual rates? "

Month-to-month percent changes are calculated from unrounded data and are not annualized.

Quarter-to-quarter percent changes are calculated from unrounded data and are displayed at annual rates. For detail, refer to the FAQ " How is average annual growth calculated? " and " Why does BEA publish percent changes in quarterly series at annual rates? "

Quantities and prices. Quantities, or "real" volume measures, and prices are expressed as index numbers with a specified reference year equal to 100 (currently 2017). Quantity and price indexes are calculated using a Fisherchained weighted formula that incorporates weights from two adjacent periods (months for monthly data, quarters for quarterly data and annuals for annual data). For details on the calculation of quantity and price indexes, refer to Chapter 4: Estimating Methods in the NIPA Handbook.

Chained-dollar values are calculated by multiplying the quantity index by the current dollar value in the reference year (2017) and then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels are conceptually the same; any differences are due to rounding. Chained-dollar values are not additive because the relative weights for a given period differ from those of the reference year. In tables that display chained-dollar values, a "residual" line shows the difference between the sum of detailed chained-dollar series and its corresponding aggregate.