The pilot organizers of Hudson’s basic income pilot hope that gathering five years of results will show how much human potential extra money can unleash.
By Talib Visram
Original article: https://www.fastcompany.com/90706938/what-happened-when-people-in-this-upstate-new-york-town-started-getting-monthly-500-checks
For many New York City residents, the town of Hudson, about 120 miles north along the Hudson River, is an idyllic getaway spot with boutique hotels, art galleries, and access to nature trails.
But the reality for some of the town’s 6,000 residents is quite different. At 23%, Hudson’s poverty rate is twice the national average. Hudson mirrors the plight of many American small towns, where booming manufacturing has given way to service-industry jobs, which come and go according to a shaky economy, especially during the pandemic. So, Hudson seemed like a representative place in which to conduct a guaranteed income pilot, the intent of which was to see “how basic income can create a safety net for those swings in the economy,” says Leah Hamilton, a senior fellow in guaranteed income at the Jain Family Institute, a social sciences think tank.
HudsonUP started in the fall of 2020 with 25 low-income recipients receiving $500 a month for 5 years. One year in, as the program inducts a new cohort of 50 more beneficiaries, organizers have released a report that illustrates how the supplemental cash assisted the first group. They found that employment more than doubled among surveyed recipients, who also reported better health, mended relationships, and the agency to spend their money as they see fit, including planning for the future, which traditional assistance programs rarely afford.
One of the most impressive findings, says Hamilton, who authored the report, was that employment among the participants went from 29% to 63%. Data aside, researchers also wanted to collect anecdotes about the concrete effects on people’s lives. One recipient said the assistance had allowed them to move out of a crowded house, others to simply afford rent and pay off bills. A mother reported being able to afford a nicer car in which to drive her children to school, making her feel like she was taking better care of them. Some were able to enjoy “small luxuries,” like taking a first vacation in years, or making small changes in lifestyle: A dive bartender said they could now work at a restaurant, doing “safer, earlier, hour-style bartending.”
Recipients felt able to finally think beyond day-to-day expenses and plan for the future, putting money toward starting a small business or applying for grad school.
In this way, people simply felt like they had more control over their lives and were being trusted to make their own financial decisions.
It allowed them to feel the dignity of not having to be a financial burden on family members, which also led to improved relationships. This unconditionality, one of the key tenets of guaranteed income, trusts recipients, giving them license, to make their own financial decisions.
By contrast, traditional assistance programs, like SNAP—Supplemental Nutrition Assistance Program (a fancier term for “food stamps”)—are highly regimented, with stringent rules for what can, and cannot, be purchased. Sometimes, federal-assistance programs are conditional to the point of absurdity: One recipient said the government would spend $2,000 a month on a temporary hotel room but not for more stable housing. And they are scrupulously means-tested, only releasing funds to those earning below a strict threshold. (HudsonUP was also targeted, available to those whose income fell below the median income level of $35,000.) Hamilton refers to the “cliff effect,” whereby recipients whose earnings increased by just a small amount would suddenly, and automatically, lose all government assistance. “You’re a dollar over or you’re a penny over,” said one respondent, and it sends people into a landslide.” Others found the government an unfair judge of “deservingness,” especially among people with drug or health problems. “It’s crazy how they speak to people who have issues,” one recipient said.
Besides demonstrating agency, the pilot was designed to show “transformational potential” on people’s lives—which is the reason organizers decided on a deliberately long, 5-year program, to track the efficacy over an extended time frame. By comparison, California’s two guaranteed income initiatives in the cities of Stockton and Compton are designed to last 24 months. Pilots often suffer from budget restraints. In Hudson, the first cohort’s payments were financed by Humanity Forward, a nonprofit dedicated to ending poverty, and the second by local charity, The Spark of Hudson.
The organizers hope that gathering data over the five-year period will help make the case for their ultimate goal: a more permanent, federally guaranteed income program.
“How can we inform future public policy to make this really work well, at the national level?” Hamilton asks. In the meantime, she hopes the pilot continues to have a beneficial impact on its participants, helping them take control, settle into better jobs, housing, and secure their futures. “We want to change the trajectory of folks’ lives,” she says. “And I think, in five years, you can really do that.”
