This is What Happened When a California Town Gave Struggling Folks Free Money for a Year

In an encouraging twist to the narrative, an experiment showed that basic income recipients in a California city displayed intelligence and ambition, not lethargy.

Sociologists consider the randomized, controlled trial in the city of Stockton to be a good starting point for further research on the effects of an untethered cash injection in easing the difficulties of living in the lowest income class.

the the project was called SEED (Stockton Economic Empowerment Demonstration), and took place from February 2018 to February 2020.

The distribution of $ 500 each month for two years to 125 people living around or below the city’s median household income resulted in participants taking full-time jobs up to 200% above a control group of participants who they received no income. The jump was even smaller than what is seen in traditional unemployment benefits, although those who received the $ 500 were not necessarily unemployed.

However, unlike unemployment benefits, participants were not told that receiving the money would depend on their job search. Instead, they received their money on a debit card and were told to spend it on whatever they wanted.

The vast majority of spending went to things one might imagine would go, such as food, utilities, rent, car maintenance, etc.

Another significant finding was that it allowed participants a little more time in the day to enjoy life, spend time with their families, or study to potentially improve their skills.

“The $ 500 was spilled in their networks extended in material and immaterial
ways that alleviated financial strain on fragile networks and created more time for relationships, ”the authors wrote.

A man had spent an entire year being eligible for a real estate license, but never really had time to begin the process. The $ 500 allowed him to take time off work to earn his certificate and change careers, resulting in a “360 degree” turn in his fortune.

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Finally, despite the fact that each participant spent 100% of their monthly raises of $ 500, 25% of the participants by the end of the trial had managed to cover the $ 400 cost of an unexpected expense, suggesting that instead of continuing to spend sprees or immediately committing the money to rent, at least some were able to extend the useful life of the $ 500 and other sources of income much more, perhaps saving more than normal, the fundamentally important aspect of strength and financial growth.

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It’s an encouraging sign that a randomized, placebo-controlled trial was able to find so many benefits.

A basic income can be a more flexible and effective alternative than other existing welfare programs that limit the scope of the brochure to particular requirements and circumstances, because it allows the individual to maintain their own agency and manage their own affairs, who like economists of past centuries Recognized – they are the only ones who can do it.

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