This California City Gives Its Residents $500 a Month—Here’s Why
If people in need were given $500 each month, how would they spend it? The country’s first mayor-led guaranteed income program is trying to find out.
The privately-funded, 18-month initiative, called the Stockton Economic Empowerment Demonstration or SEED, began giving 125 residents of Stockton, California, $500 a month on a debit card last February. SEED randomly selected residents who were at least 18 years old and lived in a neighborhood where the median income is at or below $46,033, the city’s median at the time. Researchers have been regularly checking in with recipients to analyze how they’ve spent the stipends, and how the extra money has been affecting them.
Although the concept of universal basic income has been around for some time, it recently gained more traction in the U.S. thanks to former 2020 presidential candidates like Andrew Yang. When he was campaigning, Yang centered his platform on basic income. He argued that in order to prepare for when automation makes most jobs obsolete, American citizens should be given a monthly stipend of $1,000 with no strings attached. As opposed to Yang’s proposal, the Stockton program is meant to supplement welfare, not replace it, the San Francisco Chronicle notes.
How have recipients spent the money so far? Last October, halfway through the trial, SEED released provisional data showing that recipients were spending their stipend mainly on food and clothing. They spent almost 40 percent on food, 24 percent on merchandise, 11 percent on utility bills, and nine percent on car repairs and gas. The rest of the money went to medical expenses, insurance, education, and donation. Although 40 percent of the money was withdrawn as cash, researchers filled in the gaps by asking recipients how they spent that cash.
Zohna Everett, one of the recipients, recently told USA Today that if there was a misperception about universal basic income she’d like to correct, it’s that the stipend is a “license to relax.” Rather, “it is merely a lifeline out of poverty that empowers her to stay positive.” According to USA Today, she just found out that her temporary job at Tesla’s plant will become permanent, but she still looks for ways to save money.
By the time the program concludes in July, data measuring how the money impacts the recipients’ physical and mental health will be released, according to the AP.
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