Jovan Bravo and his wife knew they wanted to move, but could never quite make it happen: They would sock away $100 to $150 a month and then have an expense come up—a car breaking down, their daughter’s gymnastics lessons—that would deplete their savings. Then they’d start over again. “The hardest part of it was trying to save up a $2,000 deposit when you’re living check-to-check,” he said.
Bravo, a soft-spoken 32-year-old, grew up in Stockton, a diverse, high-poverty city in California’s Central Valley. He had a decent job working in cement but still found himself struggling with rising housing costs as people from nearby San Francisco and Silicon Valley—many who were themselves looking for relief from an affordability crisis—moved into the area. Things were cramped in a two-bedroom with three kids, Bravo said, but a bigger home in a safer neighborhood was out of reach: “Everything in Stockton is going up.”
This more or less seemed like how things would stay, until Bravo opened his mailbox one day in December 2018 to find a letter addressed to “Stockton Resident.” “Your household has been randomly selected to participate in the Stockton Economic Empowerment Demonstration, also known as SEED,” the letter started out. “SEED will provide $500 a month to a group of Stockton residents for 18 months.”
The SEED project, which started sending out checks in February 2019, is testing an idea that has floated around in academic and philosophical debates for centuries: that giving people money, no strings attached, can improve their lives without any negative repercussions. Known as universal basic income, or UBI—sending regular infusions of money to everyone—it’s not a new idea, dating as far back as Tudor England. Thinkers ranging from Martin Luther King Jr. to Milton Friedman have backed it, and President Richard Nixon nearly enacted his own version in the form of an unconditional payment for all families with children.
But beyond some accidental experiments, it has yet to get a real-life test here in the United States. So SEED is seeking to answer some key questions: Can a basic income benefit not just people’s finances but their well-being in ways that could change their life trajectories? Or will the additional cash fail to make a meaningful difference? These questions have gained salience as work has become more precarious and wages have failed to keep up with an otherwise booming economy. Against these conditions, the thinking goes, basic income could offer every American, no matter their station or status and no matter the state of the economy, a financial net. Stockton, which SEED researchers felt was a representative city because of the strength of its diversity and the concentration of its poverty, was selected as the laboratory. And residents like Bravo are the guinea pigs.
The letter from SEED “had me curious,” Bravo said. He put it aside for a week but kept thinking about it. Then his wife told him to complete the survey. “I figured, ‘Hey, it’s worth a shot. If I don’t hear back, then I’ll just make ends meet somehow, and if I do hear back it’ll be all positive,’” he said.
He eventually forgot about the whole thing. But about a month later he got a phone call telling him he had been selected to receive $500 a month for a year and a half, along with 124 other Stockton residents. With that, an abstract argument about economic policy became actual money in his wallet, and he became a living example of what, if anything, this extra cash might mean. “It felt like I won the lottery,” Bravo said.
At the end of 2018, copies of the same letter Bravo received were sent out to 4,200 randomly selected households in Stockton neighborhoods with a median income of $46,000 or less—the median income for the city as a whole at the time. “To make it as universal as possible”—not just reach the most destitute people—the only other criterion was that recipients had to be at least 18 years old, explained Sukhi Samra, SEED’s executive director. If someone in the household filled out a survey, they were randomly put in one of three groups: the treatment group, which would receive $500 a month for 18 months on a prepaid debit card and participate in surveys and interviews; the active control group, which would participate in the same surveys and interviews but only get $20 gift cards instead of the basic income; and the passive control group that would receive nothing but would be tracked through administrative data.
There’s a dual point to the project. The first is to add to the research on what a UBI might do in a country with an advanced economy like the U.S. To that end, Amy Baker and Stacia West, the lead researchers, are running a randomized control trial that deploys both quantitative and qualitative measurements of three key questions: how the money impacts the fluctuations in monthly or even weekly income among recipients; if changes in that volatility alter their financial, psychological, and physical well-being; and whether it “generate[s] agency over one’s future,” as they put it in their original plan. They’re trying to measure, basically, if changing your financial situation can change your life.
In-depth surveys done every six months, as well as monthly questions asked via text message, will fill in other bits of information: how people’s daily lives and time use change, whether family relationships are impacted, if their food security increases and material hardship decreases, and if it changes their sense of self-worth. “It’s not just, are we alleviating stress … but then, what does that then free them up to do?” Baker said. “If you’re healthy and whole, does that change your experience of your day-to-day life?”
Bravo knows that a lack of money can crimp a family’s entire life. He was raised in Stockton by a single mother who worked long hours at multiple nursing home jobs to support the family. “It was a lot of me having to wake myself up in the morning and get breakfast and make sure I went to school myself because she wasn’t there,” he said. When he got home at night, he was the one who made dinner and ensured his homework got done. “I wish somebody was there,” he said. “It would have been a lot easier.”
Now that he is a parent himself, he’s poured himself into giving his kids a different kind of childhood. “I work a lot to keep them away from the type of environment I was raised in,” he said. It’s required extremely long hours at work: “I was having to work almost 60 hours a week just to make ends meet.” That meant 12-hour shifts Monday through Friday and a shorter shift on Saturdays. “It’s draining,” he said. “It takes a toll on the body. And mentally, too.” It also meant spending little time with his children, leaving before they woke up and having only a few hours in the evening before going to bed.
His family lived in what he called “a high-crime area,” with routine gun violence—a similar Stockton neighborhood to the one where he grew up. To get the kids out of the house, he and his wife continually signed them up for extracurricular activities: cheerleading, gymnastics, basketball, football. Those, of course, came with their own expenses. “We always made enough to hold the household together, but … we need[ed] to work a little more so we could do the extra stuff,” he said. “The extra stuff was always stressful.”
The other side of the SEED experiment is the emotional argument. The Economic Security Project, the organization that provided the money going to the participants, is focused on making the case for a basic income in moral terms. “To move beyond white papers and academic discussion, we have to move this to a city, move this to the lived experience,” said Natalie Foster, the ESP’s co-chair. The hope is that by combining data with real-life stories, they “will really move guaranteed income from this crazy idea to a viable policy solution,” said Samra.
And the backers of the project argue Stockton is the perfect setting for it. Stockton is “an all-American city,” the city’s mayor, Michael Tubbs, boasted. In 2015 it was named one of the 10 most diverse cities in the country. But just as its diversity makes it representative of the country’s population, its economic struggles are representative of the economic insecurity so many Americans face. The number of homeless people in the city has tripled since 2017. Five percent of the population is still unemployed.
Tubbs grew up much as Bravo did: living in Stockton in poverty, watching his single mother struggle. He eventually left Stockton for Stanford and then an internship at the White House. He decided to return home, in 2012, after his cousin was murdered. That’s also when he decided to run for city council. One of his main goals in office has been addressing the city’s poverty. “I believe that poverty is the root cause of the structural issues that we have in this city,” Tubbs said.
So when he was elected mayor four years later, he asked his staff to research “the boldest, most radical” ideas for solving the city’s poverty, he said. “They came back with basic income, and I laughed.” But then he remembered reading Dr. Martin Luther King Jr.’s call for a guaranteed income. A week later he found himself talking to Foster, who was looking for somewhere to pilot a basic income project. It was “very serendipitous,” he said.
It’s not much of a stretch for Tubbs to understand what a basic income might mean for Stockton’s residents. For him, growing up, it would have meant “Mom would have paid off her credit card debt faster, used check-cashing less,” he said. “Give her more peace of mind, not stress about whether the bills would be paid.”
The basic income concept being tested in Stockton is not necessarily the same one that has drawn support from conservative thinkers. Charles Murray, co-author of The Bell Curve, wants to implement a basic income as an outright replacement for virtually the entire social safety net, for example. Even some liberal UBI proponents, such as former Democratic presidential candidate Andrew Yang, support this version: His “freedom dividend” of $1,000 a month would only be available to those who forgo most other public benefits. No amount of basic income proposed thus far, however, could come close to replacing things like Social Security, food stamps, and Medicare.
Tubbs doesn’t see UBI as a stand-in for other social supports people already receive. No Stockton participant has been asked to give up any other income to be in SEED. Rather, it’s “an economic floor” that “will allow them to go further,” he said.
Poverty “is not inevitable,” he added. “Poverty is not a function of a lack of character, but really a lack of cash.”
After the SEED money started to come in last February, Bravo was able to cut back on his work hours and started picking his kids up from school. He tries “to spend as much time as possible with them,” he said, “because I always felt that I missed [that] in my younger days.” Before they had to stay in after-school programs; now he can take them to get ice cream or to play in the park.
He also has the whole weekend to spend with them. That plus the SEED money has allowed them to take a lot more trips together. “You really don’t have to second guess it too much knowing that it’s there,” he said. The time he spends with his family feels better, too: “I’m not overexhausted from working so many hours just to pay bills,” he said.
There’s also extra money to spend on the little things that children need: new clothes, new shoes, school supplies. “Knowing that it’s there and that it’s coming, it helps you plan ahead,” he said. “It makes a huge difference.”
These, it turns out, are typical uses for such unexpected, no-strings-attached cash windfalls. According to SEED’s preliminary data, over a third of the money is being spent on food, while another fifth covers things like clothes and household goods, and 11 percent utilities. (The full report will be published in the middle of next year.) Tubbs, Samra, and Foster have heard this echoed by recipients. “One woman talked about being able to buy the sports uniform that she’s really never been able to buy before,” Foster said. “Another talked about being able to say ‘yes’ to their kid in the grocery store instead of ‘no, put that back.’” The money is covering necessities: Recipients are “able to pay for braces and dentures and car accidents,” Tubbs said. And in moments of potential crisis, like the current public health threat posed by coronavirus, it’s easy enough to imagine the additional monthly support helping people and families take better care of themselves as they lose income or business.
They also say they have more breathing room—a reprieve from the stress of making ends meet—and in particular have more time freed up to spend with their children. Like Bravo, one recipient was able to cut back on work and spend time with his kids. “He’s realizing his daughter is really funny, his son is really independent and creative,” Samra said. He told her, “These are traits I didn’t have time to pick up on before SEED.”
“Something as little as $500 a month has impacted people’s lives so drastically,” Samra added. It’s “alleviating stress, alleviating worries. People are sleeping better, people are less depressed.”
So far, economists have spent little time examining what, exactly, people spend money on when they get regular infusions of cash. But Alaska, which distributes a dividend from its oil revenues to all residents each year, offers a glimpse. A study found that when the money comes in every October, consumption on smaller items—things like clothes and restaurants—goes up, but not necessarily on big investments like cars and houses. That seems to indicate, explained Ioana Marinescu, a University of Pennsylvania economist who has studied basic income, that “when people receive additional cash they spend quite a bit of it quite fast and on daily expenses.” Which also means that without the extra money, they don’t have enough to cover all those necessities.
In another natural experiment, the Eastern Band of Cherokee Indians in North Carolina began handing out a portion of casino revenue to every tribal citizen. UCLA economist Randall Akee, who has studied the data on what happened afterward, found that children and parents reported improved relationships with each other. “It’s consistent with the story that one of the biggest … stressors is finances,” he said. “Extra money allows for more consistency and covering of basic living expenses, and people aren’t perhaps nearly as stressed with each other.” And reducing a family’s stress is no small thing. “It may have an intergenerational impact on the kids,” Akee said.
The biggest change for Bravo and his wife was that the SEED money allowed them to finally save up enough for the first month’s rent and security so they could move to a new house in a new neighborhood. Late last May, they moved from their duplex to a four-bedroom house, using some of the money to fill it with furniture. Each child has his or her own room, and they even have a loft with a game room in it.
It has a yard the children can play in and is in a neighborhood safe enough that they can ride their bikes down the streets with other kids. They go outside as much as they want. There’s “no violence, no drug use,” Bravo said. “We get packages delivered, and they sit on the porch for hours until we get home.” The backyard has a cherry tree, orange tree, and grapefruit tree. The kids, he said, like to pick the fruit.
These are, in many ways, mundane changes, which is kind of the point. But as in prior natural experiments, this small sum of money could have big ripple effects on Bravo’s children. It cracked open a door to the kind of life he had been working so hard to give them. “I know how I felt growing up,” he said. “And I didn’t want that for my kids.”