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Why project that gave $500 a month to some Californians could have 'profound impact on public health'

Election 2020 Universal Basic Income
Posted at 10:52 PM, Apr 16, 2023

Results are out from a two-year experiment testing the effects of guaranteed income on residents of Stockton, California -- but the findings were complicated by the start of the Covid-19 pandemic, researchers say.

The program, dubbed the Stockton Economic Empowerment Demonstration or SEED, gave monthly payments of $500 to 131 people starting in February 2019. There was also a control group of 200 Stockton residents.

A little over a year later, the Covid-19 pandemic began, launching a domino effect of lifestyle changes as more people stayed home under lockdown orders.

Researchers Dr. Amy Castro and Dr. Stacia West, from the University of Pennsylvania and the University of Tennessee, found that people who received the money were more likely to be able to handle a $400 emergency, according to the analysis, published Monday in the Journal of Urban Health.

The extra $500 a month also "permitted judiciousness about COVID and what conditions workers would tolerate for poorly compensated work," the study says.

But the virus wasn't the only public health emergency the Stockton residents faced: The researchers also examined the impact of the record wildfires that scorched Northern California in 2020.

According to Castro, the wildfires and the pandemic "trapped" people between "competing public health orders," especially for those with pre-existing health conditions. People were supposed to interact outdoors because of the coronavirus, for example, but the wildfires drove them back inside.

"The $500 buffered against some of these stressors by providing people the ability to stock up on household goods and procure what they needed to weather covid and wildfire season," Castro wrote in an email to CNN.

One survey respondent described how he chose to use food delivery apps because wildfire smoke made it difficult to breathe outdoors but going to the grocery store seemed risky because of Covid-19.

"In this case, his pre-existing health condition was forcing him to pit the need for air against the need for groceries," meaning "he often resorts to expensive food delivery apps which eroded his finances further," the researchers wrote.

Overall, the researchers said, their findings appear to show "that guaranteed income, under normative economic and health conditions, does calm income volatility and allay financial emotional and psychological distress" and could have a "profound" impact on public health.

"We never could have predicted the ways that the concept of unconditional cash has spread around the country and across both sides of the political aisle with serious public investment in the concept of unconditional cash. When we launched SEED we assumed it would be several years before anyone would replicate it. Instead, the pandemic lead to an explosion in guaranteed income programs across the entire United States including some unexpected places like upstate New York, Iowa, Ohio, South Carolina, and Florida," West wrote in an email to CNN.

Guaranteed income pilot programs are underway in Chicago and Cook County, Illinois; and Los Angeles.

Although the analysis was limited because people left work for a variety of reasons during the pandemic and the data is limited to people in Stockton, making it difficult to generalize further, the researchers found that overall, the extra $500 a month did not disincentivize people from working.

"The effect of guaranteed income on work was not statistically detectable, meaning that members in both groups maintained their work obligations at equal rates," West explained.

Guaranteed income, also known as universal basic income, means giving money to everyone, regardless of how much they earn, so they can have more freedom to move between jobs, train for new positions, provide care or engage in creative pursuits. Interest in the concept has risen in recent years, driven by concerns that automation and the climate crisis would lead to a mass displacement of workers.

This study also showed that the "length of time someone receives unconditional cash matters," Castro said.

"We did not start seeing changes in people's health and well-being until 6 months after receiving consistent cash. Recurring cash over time impacts people differently than a short-term cash infusion like the [Earned Income Tax Credit]. This offers a clear signal back to the Federal government when we think about policies like the child tax credit," she wrote.

A Pew Research Center poll from 2020 found that about 54% of American adults are against the idea of the federal government providing a guaranteed income of approximately $1,000 a month to all adults, regardless of their work status. More Democrats support the concept than Republicans.