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NextGen Magazine

 
 

Cities Begin Experiment in Guaranteed Income, Funded by Tech Firms

By:
Chris Gaetano
Published Date:
Aug 3, 2020
Several cities across the country have begun an experiment involving giving some people an extra $500 a month to see how they do, with funding provided by Twitter and other tech firms, according to CBS Pittsburgh. The experiment has been set up by the group Mayors for Guaranteed Income and includes the cities of Stockton, Calif.; Newark, N.J.; Columbia, S.C.; Atlanta; Compton, Calif.; St. Paul, Minn.; Seattle; Los Angeles; Long Beach, Calif.; Holyoke, Mass.; Jackson, Miss.; PIttsburgh; Shreveport, La.; Madison, Wis.; Oakland, Calif.; and Tacoma, Wash.

It would appear that individual cities have at least some discretion in how they will run their individual parts of the program. In Pittsburgh, for example, the mayor said he intends to include a diverse array of people who are struggling financially but have the ability to change their lives. Overall, though, participants aim to see how people spend the extra money and what differences it will make in their lives, especially in terms of health. The mayor of Stockton, who has been running a similar program for 18 months, said that it seems people spend the extra cash mostly on necessities like rent and food.

In the Stockton experiment, which ran for 18 months, people spent 40 percent of their free money on food, 24 percent at discount dollar stores and big box retailers like Walmart, 11 percent on utility bills and 9 percent on car repairs and fuel. The remainder was spent on services, medical expenses, insurance, self-care and recreation, transportation, education and donations. Of the participants in the study, 43 percent were full or part-time employed, 2 percent were unemployed and not looking for work, 8 percent were retired, 20 percent were disabled, and 10 percent were staying home to care for children or aging parents. 

Finland found similar results in a study of its own, in which the government gave 2,000 people a check for 560 euros a month. The study found that while those who received the money were both happier and healthier than those who did not, the payments had little impact on employment, although one participant said the extra income gave her the room to start her own business.