In Stockton, Early Clues Emerge About Impact of Guaranteed Income

A universal basic income experiment in Stockton, California, is nearly halfway over. How has $500 a month affected the lives of 125 residents?

Susie Garza, who is participating in Stockton’s UBI pilot. Rich Pedroncelli/AP

A totaled car. A mother with cancer. Two kids at home, with field trips and Quinceañera outfits and football gear to pay for. Rent bills of $1,250 due each month. Two jobs—one part-time—both paying around $15 an hour, supplemented by unpredictable child support payments. Lorrine Paradela used to lie awake at night, thinking through all her expenses and income streams, struggling to breathe from the stress of it all.

Now, Paradela says, she’s started sleeping again. She’s one of 125 Stockton, California, residents who have been receiving an unconditional $500-a-month payment since February, as part of the first mayor-led guaranteed income initiative piloted in the United States. Called Stockton Economic Empowerment Demonstration (SEED), it’s the passion project of Stockton Mayor Michael Tubbs, and funded by the Economic Security Project, a nonprofit that sponsors other guaranteed income experiments. Eight months into the 18-month project, researchers have released preliminary data about who’s participating, what they’re spending the money on, and how raising the income floor can change the entire structure of a life.

All adult Stockton residents living in neighborhoods where the annual median income was at or below the city’s average of $46,033 were sent postcards last year, inviting them to participate in the project. A smaller group was randomly chosen to receive money from the eligible pool who responded; and a control group, which isn’t receiving money, agreed to share financial information about themselves, too. In Stockton—a diverse, high-poverty city a few hours away from the tech epicenters of Silicon Valley and San Francisco—many residents are in need of such a boost, making it an ideal testing ground for SEED. Unemployment rates in the county reach about 7.5 percent, higher than the state average of 4.3 percent. Stockton is ranked 18th for child poverty out all U.S. cities.

But the Universal Basic Income concept, which has roots dating back to the Civil Rights Era, has recently gained more national traction: Democratic presidential candidate Andrew Yang is campaigning on the idea that, to prepare for a future when automation makes most jobs obsolete, all Americans should be paid a “freedom dividend” of $1,000 a month—a sentiment shared by tech founders like Mark Zuckerberg and Elon Musk. Other Democratic candidates—Senators Kamala Harris and Cory Booker—are proposing guaranteed tax refunds for low-income families, and interest-accruing “baby bonds” accounts for all American children, respectively.

Detractors of guaranteed income say they’re concerned that free funds will discourage people from working—or encourage spending on what they’d consider the “wrong” things. Countering these narratives is one of Tubbs’ goals with SEED; the project has been described as “a hand up, not a hand out.”

“In Stockton, like much of America, there’s this Puritan ethos of, ‘I work hard. If you don’t work, you shouldn’t eat,’” said Tubbs. “And [we’re] really illustrating to people, no, just like you there are people who are working hard who are struggling—not because they’re lazy, but because wages haven’t kept up with inflation, wages haven’t kept up with costs.”

About 43 percent of SEED recipients are currently working full or part-time, according to the researchers—11 percent are taking care of parents or children, 20 percent reported a disability, 8 percent had retired, 5 percent were students, and only 2 percent said they weren’t actively looking for work.

And the economic decisions they made during the first five months of the program were “really rational,” said Stacia Martin-West, an assistant professor at the University of Tennessee College of Social Work and the co-principal investigator on the project. Each recipient was given a debit card that automatically loads with $500 each month, so the researchers can categorize spending.

Of the money tracked, 40 percent went towards food. Sales and merchandise made up another quarter of the monthly spending, and about 12 percent was spent on utilities. MORE

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