Residents in cities across the country are receiving $500 per month payments as part of a no-strings-attached experimental universal basic income program.
A version of the Universal Basic Income program, popularized by former Democratic presidential candidate Andrew Yang, has gained more attention after the pandemic idled millions of workers.
Now places from Compton, California, to Richmond, Virginia, are trying out pilot guaranteed income programs as researchers hope the results give them a fuller picture of what happens when a range of people are sent payments that guarantee a basic living, AP reported.
The income threshold was based on 80% of the county´s average median income, meaning it includes both the poor and a slice of the middle class – people who face financial stress but might not ordinarily qualify for government aid based on income, AP reported.
One of the recipients is 57-year-old Anette Steele, a special education school aide who is getting her payments through a program in Ulster County, located less than 100 miles north of New York City, which covers parts of the Catskill Mountains and the Hudson River Valley.
Steele, who lives in the village of Ellenville with her retired husband, tells AP that the monthly payments of $500 provides her a welcome financial boost that has helped her pay for car insurance and groceries.
‘It lessens my bills,’ Steele said. ‘People think because you’ve been working so many years, that you make this tremendous amount of money. But no, actually.’
While most basic income programs tend to focus on cities, this upstate program branches out to a city, small towns and remote areas many miles from bus lines and supermarkets.
‘Showing that this approach will work not just in urban areas, but for rural parts of the country – which we know is one of our big national problems – I think there´s great opportunity there,’ Ulster County Executive Patrick Ryan told AP.
Ryan saw cash payments as a way to help local families struggling financially as the pandemic ebbs.
Many people in the county were already stretched thin by housing costs before the pandemic, when a large influx of New York City residents led to skyrocketing real estate prices, Ryan told AP.
Participants in the program received their first payments mid-May and were told they could spend the money as they wish, but will be asked to participate in periodic surveys about their physical health, mental health and employment status.
The Center for Guaranteed Income Research at the University of Pennsylvania, which the school formed with the Mayors for a Guaranteed Income, is evaluating the pilot program.
Recipient Eric Luna, a 26-year-old electrical lab technician, said the money will help pay the bills at the home he recently helped his parents buy in Wallkill and possibly for a master’s degree.
‘I’m also learning how to save money as well,’ he said. ‘So this will be a learning experience.’
Center for Guaranteed Income Research co-founder Stacia West, who is evaluating more than 20 similar pilot programs, is interested in seeing how spending compares to cities like Stockton, California, where more than a third went for food.
‘Knowing what we know about barriers to employment, especially in rural areas, we may see more money going toward transportation than we´ve ever seen before in any other experiment,’ said West, who is also a professor at the University of Tennessee College of Social Work. ‘But it remains to be seen.’
Supporters of guaranteed incomes say recipients should decide how to best spend the money – be it on food, job searches or to replace a refrigerator.
The money can be used to complement an existing social safety net, or can be used as an emergency response for when the economy starts tanking, AP reported.
The end goal for a number of advocates of UBI programs is a system which would see the government paying a base salary to every citizen that would help to cover costs including food and rent.
The $1,000 per month UBI idea helped fuel Andrew Yang’s Democratic presidential primary run last year and now that he is running for New York City mayor, he has doubled down.
Yang has proposed an income program that would extend an average of $2,000 per year to New York City residents living in extreme poverty.
Officials involved in the Ulster County program, where Yang has a second home, say the mayoral candidate hasn´t been involved but that the nonprofit he founded, Humanity Forward, was helpful in sharing experiences on starting a UBI pilot, AP reported.
Critics of UBI programs worry about their effectiveness and cost compared to aid programs that target funds for food, shelter or for help raising children, AP reported.
Drake University economics professor Heath Henderson told AP her is concerned the programs miss needier people less likely to apply, including those without homes.
While there are times people might benefit from a cash infusion, the money is unlikely to address the structural issues holding people back, like inadequate health care and schools, he said.
‘If we keep thinking about remedying poverty in terms of just throwing cash at people, you´re not thinking about the structures that kind of reproduce poverty in the first place and you´re not really solving the problem at all,’ Henderson told AP.