Income experiment helpful in Stockton

An experiment in Stockton that gave dozens of residents an extra $500 per month reduced their financial instability, improved their mental health and helped many of them get better jobs.

Those were the findings of a study released

Wednesday that looked at the first year of an attentiongrabbing test of guaranteed income, a concept that has gained increasing political interest as a solution to economic inequality.

Launched by former Mayor Michael Tubbs, the Stockton Economic Empowerment Demonstration randomly selected 125 participants from neighborhoods where the median income was below the citywide figure of $46,000. In February 2019, those households began receiving monthly $500 payments.

During the first year of the experiment, the more predictable income allowed recipients to pay down debt and make future plans, researchers Stacia West of the University of Tennessee and Amy Castro Baker of the University of Pennsylvania found. They reported feeling less anxious and depressed compared with a control group of about 200 other residents of the city of 310,000.

The money also helped many participants take time off from work so they could seek better jobs, West and Castro Baker said at a virtual news conference Wednesday. When the program began, 28% of participants were employed fulltime, compared with 40% at the end of the first year, shortly before the coronavirus pandemic. Among the control group, the number jumped from 32% to 37%.

“What we saw was tremendous savvy in the way that people leveraged the money to either gain fulltime employment or more security at home,” Castro Baker said.

Tomas Vargas, a participant who previously worked as a parttime warehouse supervisor, said the payments gave him a financial cushion to find a higherpaying job.

“Every day I get to wake up and enjoy time with my kids. That’s amazing to see them grow,” he said. “We didn’t have that before.”

The experiment ended in February. The research team is collecting data for a study on the second year, which Castro Baker said would look at “to what degree did that $500 serve as a financial vaccine as people were entering into the pandemic.”

The $3 million program was funded by dozens of organizations and private donors, many of them connected to tech industry leaders who believe a guaranteed income could help workers who lose their jobs to automation.

The Democratic presidential campaign of Andrew Yang, which revolved around a proposal to give $1,000 a month to every U.S. citizen over age 18, boosted support for the idea. But it has been opposed by labor unions and business groups, which believe it could undercut the job market or people’s desire to work.

Tubbs, who lost his reelection bid in November, continues his advocacy as part of Mayors for a Guaranteed Income, a group he founded last year that is setting up similar experiments in other cities.