In February 2019, then-Stockton Mayor Michael D. Tubbs launched the Stockton Economic Empowerment Demonstration (‘SEED’), a 24-month guaranteed income initiative, the first mayor-led initiative of the sort in the US. Two years later, the preliminary results from the first twelve months of the experiment (through to February 2020, before the pandemic) have been released and the key findings are positive with the guaranteed income reducing income volatility, enabling access to full-time work, improving mental health and allowing better control over one’s time and decisions.
Under the SEED program, 125 Stockton residents were randomly selected to receive $500 per month for two years with no conditions attached to the handout and limited eligibility criteria namely: being at least 18 years old, being a Stockton resident and living in a neighbourhood at or below the median income ($46,003 in Stockton). A control group of 200 individuals meeting those same criteria was also established for research purposes.
The experiment is funded with private donations including a $1 million grant from the Economic Security Project, an initiative that aims at “making the economy work again for all Americans” with a specific focus on guaranteed income and anti-monopoly action.
The program is being evaluated by two researchers, Dr. Stacia Martin-West of the University of Tennessee, and Dr. Amy Castro Baker of the University of Pennsylvania under a ‘mixed-methods approach’ consisting in both a quantitative and qualitative analysis of data collected before and during the experiment. The data was collected through both surveys and in-person or group interviews (participation in the experiment was not conditional on participating in these interviews).
The experiment was designed in close cooperation with public authorities and community members to tailor it to local specificities (disbursement timing and mechanism for instance) and to build trust between recipients, control group members and SEED staff. This work was necessary to address initial concerns around the unconditional and guaranteed nature of the income (considered ‘too good to be true’) and the risk of loss of eligibility for other benefits (covered through specific work by the Economic Security Project).
The preliminary results show that recipients made rational decisions about the income they were receiving, mostly spending it on ‘necessities’ (food, utilities, auto care). The researchers also found positive spillover effects with recipients being able to assist people in their extended networks more. Recipients also faced less income volatility and, noticeably, reported being more able to face unexpected expenses with cash or a cash-equivalent than before.
The guaranteed income gave recipients more time to engage in meaningful activities (socialising, spending time with children). This, according to the researchers, highlights how “financial scarcity generates time scarcity”. Participants also reported improvements in mental health when members of the control group did not experience the same improvements. Participants also reported improvements in mental health compared to the baseline measures when members of the control group did not experience the same improvements.
Finally, the program also resulted in an increase in full-time employment. 28% of recipients had a full-time job at the beginning of the project. After a year that proportion had risen to 40% (in the control group the proportion only moved from 32% to 37%). Some individuals indicated that the guaranteed income allowed them time to train or complete a degree or simply gave them more confidence to apply for certain positions.
Reactions to the release of the study have been positive with the findings seen as further evidence that these programs do not remove incentives to work and that, as the researchers put it, “poverty results from a lack of cash, not of character” making cash transfers an effective way of addressing poverty (the researchers as well as Mayor Tubbs are quick to point out however that these cash transfers cannot be the only solution to the issues faced by residents of a city such as Stockton).
On the other hand some have pointed out that SEED remains a small-scale and relatively short experiment and have cautioned about drawing conclusions too rapidly from the study. Another limitation of the study is that tracking of expenses from the guaranteed income relied on recipients collaborating with the researchers (the income was transferred to a prepaid debit card to be used directly and through which researchers had access to spending records, or to be withdrawn as cash or to another account. In those cases, about 40% of the recipients, researchers had to conduct specific surveys). Finally, some critics have used the fact that the experiment was being privately funded to argue that basic income was too expensive for public authorities.
Regardless, these results are sure to add to the growing debate about basic income in the US. Other experiments are ongoing, and in June 2020, Michael Tubbs and the Economic Security Project founded Mayors for a Guaranteed Income, a network of around 40 mayors across the US working on implementing guaranteed-income experiments in their cities.
The New Yorker has reported on the results of the experiment in Stockton, where five hundred individuals randomly selected from the city’s most deprived districts have been receiving US$100 per month unconditionally.
… For example, during the pandemic, the percentage of money that participants spent on food, consistently the largest category, reached nearly twenty-five per cent over the monthly average, while the amount spent on recreation dropped to less than two per cent.
Participants have also put the money toward rent, car payments, and paying off debt, as well as one-off expenses for themselves or their children: dental surgery, a prom dress, football camp, and shoes. They’ve also been able to cut back on working second and third jobs; one participant, a forty-eight-year-old mother of two who works full time at Tesla, was able to stop working as a delivery driver for DoorDash. Alcohol and tobacco has accounted for less than one per cent of spending per month. …
(To read previous articles on the experiment, click here)
Tomas Vargas, a recipient of Stockton’s “universal basic income” program.
Although the Stockton SEED (Stockton Economic Empowerment Demonstration) basic income-type experiment is still ongoing, some encouraging signs are already showing up. Stockton Mayor Michael Tubbs already says that “I think the data shows that people make good decisions, people are healthier, happier”, and a few of the program’s beneficiaries have already given positive feedback.
That is the case of Stockton resident Tomas Vargas, who earns less than the official poverty line, which at the moment stands at 46000 $/year. His view of the program and his personal experience has been recorded on a short podcast on Capital Public Radio, after he knew he would receive 500 $/month, no strings attached, for 18 months (more details of the program in previous news articles). Although that value amounts to only about 20% of Vargas earnings, and to 13% of the poverty line, he still says that “It makes a difference on choices I can make”. He talks about a “big stress relief”, and has a clear notion that the experiment will have an impact for the future of the basic income policy, at least in Stockton.
Although briefly, Tubbs skimmed through the UBI experiment in the latest State of The City 2019, where he delivered an hour-long, much appreciated speech focusing on poverty, crime, housing and community building.
Ras Baraka, present-day mayor of Newark, has announced the intention of rolling out a universal basic income (UBI) pilot program in the city. Newark, a city just outside Manhattan island, is plagued by poverty (around one third of its population lives under the poverty line), and that is the prime motivation for going through with the pilot.
Baraka has said that “We believe in universal basic income, especially in a time where studies have shown that families that have a crisis of just $400 a month may experience a setback that may be difficult, even impossible to recover from”. No specifics were put forward on how or when this pilot is going to be executed, but the idea is to test what happens when people are given an income, regardless of their employment status. Those specifics will be studied by his administration staff, as part of the pilot’s planning.
If Newark goes ahead with this UBI pilot program, it will be the second city in USA to carry on an experiment with unconditional cash stipends, after Stockton, California. The Stockton Economic Empowerment Demonstration (SEED) had been planning the experiment for about 18 months, before it started in February 2019. Under the SEED pilot, 130 adults will receive 500 $/month, unconditionally, for 18 months, while monitored for spending and saving habits, their quality of life and financial stability.
A new discussion paper, released on Monday, August 20 by Mayor Michael Tubbs and the Stockton Economic Empowerment Demonstration (SEED) team, reveals details of the design of the basic income pilot planned for launch next year.
Stockton Mayor Michael Tubbs
Following in the heels of Silicon Valley’s Y Combinator, the mid-California City of Stockton announced in October 2017 that the municipality was readying a privately financed basic income pilot.
The project arose out of collaboration between Mayor Michael Tubbs and the Economic Security Project (ESP), an initiative founded in California in the previous year to support work related to basic income and cash transfers in the US.
Called the Stockton Economic Empowerment Demonstration or “SEED”, the program will provide approximately 100 Stockton residents with unconditional cash payments of $500 per month for 18 months.
To prepare a study of the effects of the cash payments, the project has recently enlisted the assistance of two scholars: Dr. Stacia West of the College of Social Work at University of Tennessee, who gained press in the basic income community last year for her study of Dolly Parton’s My People Fund (which provided no-strings-attached cash support to wildfire survivors), and Dr. Amy Castro Baker of Social Policy and Practice at the University of Pennsylvania.
A new discussion paper from SEED, published on August 20, 2018, lays out newly disclosed details about the process of selecting and enrolling participants. The design is one that has been informed by feedback received from Stockton residents, consulting researchers, and others since the project was unveiled.
Seeding SEED (Participant Selection)
As described in the discussion paper, participants in SEED’s basic income trial will be chosen from the population of legal adults (at least 18 years of age) who reside in any Stockton neighborhood in which the median household income is no more than $46,033, the median household income of the city as a whole. The latter provision is intended to allow the project “to be inclusive of residents across the city while ensuring that resources reach those who are in need”.
Although eligible participants must reside in a neighborhood in which the median income is at or below the city’s median, there are no limits on the individual or household income of participants. An adult resident earning above $46,033 is still be eligible to participate in SEED.
Invitations to participate in the basic income demonstration will be sent to 1000 households randomly selected from neighborhoods meeting the income condition. Approximately 100 recipients will then be chosen at random from those who reply to the invitation and give consent to participate. Those who are not selected will be eligible to join the control group. Members of the control group will share the same type of information with the researchers (e.g. information about their financial security, health, and well-being), and they receive compensation in cash for their participation in supplying data, but they will not receive the $500 monthly income.
The invitations are to be mailed by January 2019, with first payments anticipated in February.
Lead researchers West and Castro Baker will publish a pre-analysis plan in October, which will present the study’s methodology in depth.
But SEED’s latest discussion paper does provide a few new details: the project will examine outcomes including “financial security, civic engagement, and health and wellness” through a combination of surveys, interviews, and focus groups, and the research team will compare outcomes among the cash recipients to those of a control group (which, as mentioned above, will be composed of others from the population of eligible participants).
Although SEED is now to include a controlled experiment, the project still calls itself a “demonstration” instead of an “experiment”, and this not due (merely) to the attractiveness of “SEED” as an acronym rather than “SEEE”; the generation of stories and anecdotes remains a core purpose of SEED.
As also described in the recent discussion paper, Mayor Tubbs and his team aspire to produce stories about how a modest guaranteed income impacts individual lives, as well as how a social experiment impacts a city.
The demonstration will track the individual experiences of a small group of participants who volunteer to speak publicly about the effects of the program on their lives. Artists will also assist in delivering the narrative. For example, the paper indicates that a public event featuring poetry and spoken word performances is to be held at the conclusion of the project.
In addition to telling the stories of individual recipients, the SEED team intends to set the project “in a larger framework for a broader vision for a new social contract”, presenting it “as part of the larger story of Stockton, a trailblazing city on the rise”.
The Stockton project is motivated by the belief that an unconditional basic income is “one of the most effective tools” to reduce poverty and mitigate economic insecurity. SEED states, “We are motivated to test a guaranteed income in Stockton because we believe it is to combat poverty. Unconditional cash can supplement and enhance the current social safety net.”
Inspired by Dr. Martin Luther King Jr.’s endorsement of a guaranteed annual income, Mayor Tubbs developed an interest in basic income as part of a broader program to help his city recover from economic devastation. Hit badly by the economic collapse of 2008, Stockton was declared “America’s most miserable city” by Forbes in 2011 and filed for bankruptcy in 2012, becoming the largest US city to have done so at the time (although soon surpassed by Detroit).
Tubbs was elected to Stockton’s City Council in 2012, at the age of only 22, and in 2016 defeated incumbent Anthony Silva to be elected as mayor of the city of 300,000 — the youngest mayor in the city’s history and the first African American.
Since assuming office, Tubbs has pursued a range of initiatives to combat the effects of economic devastation. He led Stockton in creating a Housing Mitigation Fund to reduce financial risk for landlords who rent homes to the homeless, for example, and he secured a philanthropic grant to launch another privately funded initiative, Stockton Scholars, which provides scholarships to help Stockton high school students attend college or university. Mayor Tubbs also spearheaded a partnership with the city and Advance Peace, a controversial program that aims to reduce gun violence by providing cash assistance and other personal support to those most likely to commit violent crimes. In addition to heading SEED, he is currently constructing a re-skilling program to help close the skills gap between employers and Stockton job-seekers.
It is against this background that SEED declares it is “taking place within a larger collective impact model to build a world-class cradle-to-career pipeline of education, public safety, and opportunity”.
A “Basic Income” Trial?
Past articles in Basic Income News have stressed that many existing so-called “basic income” experiments are constrained in ways that call into question their resemblance to a universal and unconditional basic income. In many cases, for example, participants have been selected only from pools of individuals with low incomes (Ontario, Y Combinator), who are unemployed (Finland), or who are currently receiving other welfare or social assistance benefits (The Netherlands, Barcelona). In some cases, moreover, the cash payments are reduced with earned income (e.g. Ontario, The Netherlands).
The design of the Stockton pilot is notable in that there is no requirement that individual participants be low-income, unemployed, or receiving government assistance. As mentioned above, participants must reside in neighborhood with an average income at or below the city median; however, participants themselves needn’t have an income below this level (e.g., in principle, invitations to participate could be sent to affluent investors who has purchased homes in low-income Stockton neighborhoods with the hope of later turning a profit).
Additionally, the $500 payments will not be clawed back with additional earned income. That said, however, other benefits might. SEED is currently working with government benefits agencies to determine how the unconditional cash grants will impact recipients’ eligibility for means-tested benefits. Under current US policy, such a $500 per month of “reasonably anticipated income” would generally need to be reported as household income. However, Tubbs hopes to secure waivers for participants to prevent or mitigate potential loss of benefits during the trial. SEED states that it will provide potential recipients with detailed information about the effect of participation on public benefits, as well as providing opportunities to consult with benefits eligibility counselors prior to consenting to join the project.