Test of free money sees gains in employment

STOCKTON, Calif. — After getting $500 per month for two years without rules on how to spend it, 125 people in California paid off debt, got fulltime jobs and reported lower rates of anxiety and depression, according to a study released Wednesday.

The program in the Northern California city of Stockton was the highest-profile experiment in the U.S. of a universal basic income, where everyone gets a guaranteed amount per month for free. Announced by former Mayor Michael Tubbs with fanfare in 2017, the idea gained momentum once it became a part of Andrew Yang’s 2020 campaign for president.

Supporters say a guaranteed income can alleviate the stress and anxiety of people living in poverty while giving them the financial security needed to find good jobs and avoid debt. But critics argue free money would eliminate the incentive to work.

Tubbs, who at 26 was elected Stockton’s first Black mayor in 2016, wanted to test those claims. Stockton was an ideal place, given its proximity to Silicon Valley and the eagerness of tech titans to fund the experiment as they grapple with possible job losses that could come with automation and artificial intelligence.

The Stockton Economic Empowerment Demonstration launched in February 2019, selecting a group of 125 people who lived in census tracts at or below the city’s median household income of $46,033. The program did not use tax dollars but was financed by private donations.

A pair of independent researchers at the University of Tennessee and the University of Pennsylvania reviewed data from the first year of the study, which did not overlap with the pandemic.