By Craig LeMoult
See original post here.
Porchia Willis said she couldn’t believe it when she got a flyer advertising a lottery for single parentsto get $500 a month from the city of Cambridge.
“I was so in disbelief. I was like, ‘Wow.’ Like, who really would create an opportunity like this, in a time like this?” Willis remembered recently. “So I was on it and I applied immediately.”
Willis was one of 130 single parents randomly chosen in September, 2021 to participate in the city’s experiment on what happens when you simply give money to low-income residents with no strings attached. Cambridge RISE was one of many programs around the country looking at the impact that a guaranteed income can have on lifting residents out of poverty.
That 18-month pilot ended in February. But Cambridge plans to dramatically expand the idea with a new guaranteed income program, giving $500 a month to roughly 2,000 low-income families for 18 months. The mayor of Cambridge will announce Tuesday that, in June, the city will begin taking applications for a new guaranteed income program and payments will start showing up in bank accounts in July.
Momentum around guaranteed income programs is growing nationally, but the concept isn’t new. And recent studies find the impact is more than helping to pay the bills.
For Willis, the pilot program on that flyer felt like a rare opportunity at a tough time.
“During the pandemic, everything shut down,” said Willis, who worked at a hair salon. “I lost my income and didn’t have clientele or anything because I was just the hair assistant making minimum wage.”
With the additional money from Cambridge RISE to help pay her bills, she said she could afford the time to go to barber school and get the training she needs for a higher-paying position.
Willis said the extra money changed her outlook.
“I feel like I see a lot more success coming my way, and my legacy being good,” said Willis, who has started her own hair-braiding and hair products business while she continues barber school. “I don’t have to worry, you know?”
It’s what Cambridge Mayor Sumbul Siddiqui was hoping for when the city first launched the pilot program in 2021, using a grant from the group Mayors for a Guaranteed Income and funds from other philanthropic sources. It’s what motivated her to ultimately announce the expansion in April 2022.
“What I’ve heard from folks is that they feel like our pilot is a way for government to kind of say, you know, ‘We see you. We recognize you could use assistance and we trust you to figure out how to best use this money,’” Siddiqui said.
Unlike other social services like welfare or unemployment insurance, the program has no requirements beyond an income threshold and city residency. It will support an estimated 2,000 families with kids who make under 250% of the federal poverty line, or roughly $46,000 a year or under for a family of two. Even if participants get a better-paying job, they will still be allowed to continue in the short-term program.
Cambridge isn’t the only Massachusetts city experimenting with guaranteed income. There are other programs, including one in Chelsea, but this new program in Cambridge is not a lottery. It is open to all residents with children who meet the basic income eligibilty requirements.
“That is what sets us apart,” said Geeta Pradhan, president of the Cambridge Community Foundation, which coordinated the pilot and is now helping the city set up its new program. “This is the only non-lottery program in the country.”
The idea for guaranteed income has been around for a long time, espoused by titans like Martin Luther King Jr. The most complete study of guaranteed income was done in Stockton, Calif., between 2019 and 2020. It showed low-income families who got recurring payments with no strings attached largely used the money for basic expenses like groceries. The overall impact went far beyond that, though, said Amy Castro of the Center for Guaranteed Income Research at the University of Pennsylvania.
“At the beginning of the Stockton experiment, almost everyone in the treatment condition and the comparison condition met the clinical criteria for anxiety, depression, or both,” Castro said. “And after one year of unconditional cash, what we saw was that by calming that scarcity and calming that income volatility, people in the treatment group moved from likely to have a mild mental health disorder into the category of ‘likely to be well.’”
The Stockton experiment also showed an increase in full-time employment among those who received the unconditional cash. Castro said that’s because the additional income removed financial barriers — like transportation and child care — that people can face when trying to get a new job. It also increases the ability and inclination to take risks and set new goals.
The University of Pennsylvania center is now studying about 30 guaranteed income programs around the country. Castro said their research will look beyond the financial impacts.
“[We’re] asking: to what degree do changes in income volatility or smoothing that up-and-down dynamic with your finances, alters your financial well-being, your psychological distress, and possibly your physical functioning?” Castro said.
One participant in the Cambridge pilot said she saw that kind of change in her life. She asked that her name not be used for personal reasons related to domestic abuse. She has a 14-year-old son.
“He eats a lot, and he’s growing — and he’s taller than me now, which is crazy,” she said with a laugh. “As a single mom, I don’t have child support, so I’m doing this all on my own.”
Before she was in the guaranteed income pilot program, she used to have a lot of problems with chronic pain, she said, which she believes were exacerbated by financial stress.
“Slowly, step by step, I didn’t have as many doctor’s appointments. I wasn’t in so much chronic pain,” she said of life after the program started. “I know it sounds crazy, but I feel like there is some correlation.”
There was a freedom in being able to go to the grocery store without having to check her bank account first, she said. “Just not having to have that stress was huge.”
The response to the pilot project was overwhelmingly positive, Siddiqui said, so the city decided to expand the program. Cambridge will use $22 million it received from the federal government through the American Rescue Plan Act, known as ARPA.
“You don’t get these opportunities often,” Pradhan said. “It’s like a windfall, you know, to be able to stabilize families. And also at a time when everyone’s concerned about the economy, inflation is high, the child tax credits have now gone.”
It’s not clear yet what happens after the 18 months, since the federal money is a one-time cash infusion and state law prevents the city from using operating funds to pay for direct aid. Siddiqui said that’s something they’ll be trying to work out over the next year and a half.