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Stockton's guaranteed income program results in full-time employment, improved mental health

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Posted at 3:32 PM, Mar 03, 2021
and last updated 2021-03-03 15:32:45-05

STOCKTON, Calif. — It started with a letter in the mail, met with curiosity and skepticism by residents in Stockton, California.

“I filled it out, turned it in, still kind of thinking it was a joke because of the whole fact, who’s going to give people money for free?” said Tomas Vargas, Jr.

The California city made headlines when it launched the Stockton Economic Empowerment Demonstration (SEED) in 2019, the country's first mayor-led guaranteed income demonstration.

Philanthropically funded, the pilot program would give a handful of qualifying residents $500 a month and no strings attached.

“We did have some very limited eligibility criteria. Folks had to be 18 years of age or older and they had to live in a neighborhood at our below Stockton’s median household income of $46,000," said Sukhi Samra, director of SEED.

The effort was led by former Mayor Michael Tubbs. As the city’s youngest and first black mayor, Michael Tubbs wanted to govern differently.

“We can show this is an issue broader than folks in poverty. There's the working poor, but there's also people who are middle class but don't have any wealth," said Tubbs.

Many, he says, are one paycheck, sickness, or pandemic away from being in financial calamity.

“The issues of economic insecurity were not things I studied at Stanford but things I lived and experienced. My mother, she was single when she had me. My father has been incarcerated 28 out of the 30 years I’ve been alive," said Tubbs.

The cause was also personal for Samra.

“When we were growing up, my mom was the sole sort of breadwinner for me and my two sisters, and she was also taking care of my dad, who is disabled. I saw her working multiple jobs, multiple minimum wage jobs as an immigrant in this country, and still struggling to make ends meet," said Samra.

The city leaders hoped to dispel common criticisms of universal income programs, such as people will be disincentivized to work or they'll spend the money on items like drugs and alcohol.

“Most impactful for me was everything we were saying before the money was spent turned out to be true," said Tubbs.

According to the latest SEED report, the money was mainly spent on basic needs:

  • Nearly 37 percent on food
  • 22 percent on sales/merchandise items like clothes and home goods
  • 11 percent on utilities
  • 10 percent on auto costs

Less than 1 percent was spent on alcohol and tobacco.

Vargas was a part-time supervisor at UPS before the program, picking up side jobs where he could.

“Hell, it was hell. I was at the brink of giving up," said Vargas.

With cash from the program, he had the freedom to find a better job; within six months, Vargas worked full-time, making more money in a new field.

“The transformation was, it’s a blessing.," he said.

Only 28 percent of recipients worked full-time before SEED, compared to 40 percent a year later.

The control group, the group not given monthly payments, only saw a 5 percent increase in full-time employment.

“They finally have the energy, the income floor beneath them to be able to take time off to go to an interview, take an unpaid internship," said Samra.

Recipients also paid off their debt. In one year, 62 percent of recipients were making debt payments, up 10 percent. The control group saw a 4 percent decrease in people making debt payments.

Vargas was able to spend more time with his kids, which he says, in turn, has helped them focus more in school.

Levels of anxiety and depression went down for recipients.

“It shows so much of the stress and health problems we are seeing are the result of economic insecurity," said Tubbs.

Mayors in 40 cities across the country are following suit, some funding programs through COVID-19 relief money. Tubbs also serves as the chair of Mayors for a Guaranteed Income.

“What we need to see is a federal policy, because the federal government can deficit spend, cities cannot," said Tubbs.

Agreeing on how to pay for that will remain an obstacle, but Tubbs is hopeful their results will turn skeptics into believers.

“We’re often the miner’s canary for everything bad I want us to be the miner’s canary for a policy that works," said Tubbs.

SEED was extended due to the pandemic for a total of two years. Data from 2020 is expected next year.