Guaranteed Income

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A guaranteed minimum income.

Is it an idea whose time has come?

Or a dangerous disincentive against working hard to compete in the game of Survivor?

That is the American economic system.

Tonight, we discuss two comas experiment with what some see as the ultimate solution to poverty, and others see as another step toward disincentivizing the world's producers.

That is next on Northwest Now.

The idea behind the guaranteed income is to provide low income people with a slug of cash every month.

No strings attached.

Stockton, California, tried it in 2019 when 125 randomly selected people got $500 a month for two years.

Researchers found that in year one, full time employment went up 12% since less time had to be spent hustling a buck and more time could be spent learning and looking for work.

Hudson, New York, is trying to help people afford house payments.

Same story in Gary, Indiana.

Newark, New Jersey, and Jackson, Mississippi, and more than a dozen other cities.

A Pew study shows public opinion is shifting in favor of that idea.

And you might recall that it was a big piece of Andrew Yang's run for president.

Some related ideas involve increasing the child tax credit or changing Social Security to include cash payments to the poor or even reviving elements of the old welfare system that went away in 1996.

Tacoma's program is called Grit that stands for Growing Resilience in Tacoma, Tacoma.

Pilot program is a little different because it provided $500 a month to people who were working folks who are working hard, making enough to be disqualified from assistance, but not enough to pay bills and have an emergency fund.

The one year experiment just concluded.

Joining us now are United Way President and CEO Donna Point Pinto, Tacoma Mayor Victoria Woodards and the United Way's Grip Program director Abigail Lawson.

Thanks to all of you for coming to Northwest now.

Great to have a conversation about this guaranteed minimum income concept.

But you know something?

The interesting piece of this or one of the interesting pieces, it doesn't start there.

It actually has its roots in something prior to that with your research and your data collection.

Donna and Alice, I've had a note in my computer for more than a year.

It just says Donna slash Alice to do something on Northwest Now about that.

And this really provides a great opportunity for that.

I don't think you can understand grit, though, until you understand Alice.

So you know what I'm talking about.

Help fill in our viewers about what Alice is and what your findings were.

Okay.

Well, it's good to be here.

So, Alice, first of all, United Way is focused on poverty reduction.

And the population that we wanted to focus in on was this population called Alice Asset Limited, income constrained, employed.

So these are individuals that are getting up.

They're working every day, sometimes two and three jobs.

And Alice, it's between 100% and 200% of the federal poverty level for a family of four.

So that's roughly at the federal poverty level.

It's about 24,000, $25,000, up to about 56,000 or so for a family of four.

So that's the and these are individuals that are always kind of teetering.

Yeah.

They're trying to figure out and make really tough choices on how they use the income that they're bringing into their households.

And so that that particular population is the population that we want to help from falling in.

As and I would add with no buffer, if the car breaks down or the water heater goes out, that's that is where that really starts to get.

Absolutely.

And here in Tacoma, 40% of the population of the households in Tacoma are Alice households.

So we thought that that would be a great starting point because we wanted to make sure that people did have some income come, you know, coming into the home.

Mm hmm.

So here's the United Way, Mayor.

They've they've done this research.

Don has been in the community talking about Alice for for for quite a while now with some of these findings and who and what this group is exactly is.

Meanwhile, we've got this experiment kind of happening in the United States with guaranteed minimum incomes.

Stockton did it a number of towns all across the United States.

And there's a group called the Mayors for Guaranteed Income that guess what, you're on.

So start connecting the dots here for me.

So in in in the summer of 2020, I got a call from the mayor, Michael Tubbs, who is who is now the former mayor of Stockton, California, who was the first city to do this guaranteed income pilot.

And he said, Mayor, I've been talking about this.

I want to for mayors for a guaranteed income.

And I said, great, But we've kind of talked about it in Tacoma, but aren't quite ready.

You said, if you're interested, I'd love for you to be a founding member.

And I said, Of course.

And then obviously soon as I said, yes, I was like, I got to talk to Don because this is perfect for Alice.

So what what, what we did is we went out and the initial group started with about 10 to 12 mayors who said we're interested, and then went from there to now.

We have over 100 mayors who have signed up in support of guaranteed income.

A lot of them are either beginning to or are finishing up like we have running projects in their communities as some guaranteed income projects.

Now, the other good thing about signing up in the very beginning is that's how we got the the bulk of our funding to do our guaranteed income pilot in Tacoma.

So what they did with those who initially signed up as founding members of mayors for a guaranteed income, they that guaranteed the mayors for guaranteed income at the national level actually went out and fundraised so that founding cities could actually have money to do a pilot with.

And I'm really excited about the work just was just at the White House kind of sharing our findings with some staff at the White House.

Because what we do know is that in order for this program to go to grow, it's got to come from the federal level.

We've seen it work with child income tax credits, so we've seen it work.

So so now we want to make it work for everybody.

So where did the money for this initial group come from?

Interesting.

I think Jack Dorsey, as they say, Twitter was one of them.

He was one.

He was he was the big giver in the beginning.

And as a matter of fact, we got a half a million dollars to do our pilot.

That was from Jack Dorsey.

And even before we got the money to do the pilot, he actually seeded the first when we first organized and our city got $100,000 just to be able to explore what a pilot would look like and then somehow we were on the road to exploration.

When we got the call, they said, You don't have to explore.

We actually have money for you to do something good.

So we have a good chain we're building here from Dallas Research to the Mayors for Guaranteed Income.

Now here comes the Tacoma program, which is HEC.

It's funded.

How do we get to grit?

What does grit stand for?

And Abigail, what give us kind of the early days of that program?

Yeah, Grit is actually an acronym for Growing Resilience in Tacoma, which I think the mayor actually at one point when she when she announced that there was going to be a guaranteed income pilot program, she received a postcard and all it said was name it grit or something fine like that.

So we started with the concept of grit.

We now call it the Growing Resilience in Tacoma demonstration.

I think we would all agree that one of the clear benefits of running a localized program is that it gets to be local is that you get to really root it into Tacoma.

So I think that was step one is the early days was, you know, the mayor called in United Way, Dawn.

I said yes initially.

And then they called in the greater Tacoma community, found Foundation Sound Outreach, Tacoma Urban League, the Pierce County Council, the list goes on, are really trying to get some stakeholders on the ground of, you know, where could guaranteed income best fit in how and who and then from there turned it into community conversation.

And I want to get to how and who what the results are.

I know you're dying for that, but I think I think there's one other important piece of background that people need to understand that this isn't just a hey, let's see how it goes.

Try it.

Something.

This is part of a research program.

Absolutely.

And I would like one of you to address that.

How does this tie into research?

You're you're yes, it's an experiment, but there's also careful documentation happening to.

Correct?

Yeah, exactly.

So, you know, the whole the whole idea behind grit is to really demonstrate how a small cash assistance to cash assistance to individuals would help them in terms of just economic stability, well-being, improving all of those things.

And so we're working with the university through MGI, we're working with the University of Pennsylvania, their Center for Guaranteed Income research.

And so they have been responsible for actually random selecting the 110 individuals that are part of this effort.

They have collected all of the research.

Unfortunately won't get the final report until April of 2024.

But they've been collecting the data.

We have spending data as well.

And what's been unique about this, and Abigail can add to it, is that we have five individuals that have agreed to be storytellers.

Right.

So they're we've been able to capture their stories.

And, you know, just from the anecdotal information we're seeing that this is working.

Yeah.

And I know the research piece is a little boring.

It's a little in the weeds.

But I also know, too, that having that randomization is a part of it.

Having a good design on a study from an institution like the University of Pennsylvania adds credibility to it.

So you have to have that piece.

So I wanted to make sure we got that in there.

So now the fun part that I know you want to talk about, what are the preliminary albeit preliminary, What are the preliminary results telling us?

Well, I think the results are telling us a couple of things.

One, I think some people have in their mind that if you give people $500 a month and you don't tell them how to spend it, that they're going to go buy brand new cars or TVs or, you know, purses or, you know, spend it, spend it on things that are not necessarily what what the what the initial data says is people spend it on food, clothing, paying bills.

So so the real necessities of living, nobody went out.

And let's be frank, $500 is not a ton of money.

And so I think that's the also the importance of choosing Alice, because $500 for somebody who's on the margin can make a difference when the car needs something or when the refrigerator goes out or whether or when you need to purchase medicine for a child or food for your household.

Right.

$500 can make a difference in that way, as I like to say, it takes the sharp edges off.

That's that's that's a really great that's that's a really great analogy.

And I think one of the reasons that this I think I wanted to make sure we talked about Alice so much is because one of the potential pushbacks here is, well, these folks aren't working to begin.

No, this group with these are folks who are working and sometimes several jobs.

Exactly.

And there was pushback about why don't we give it to someone who is homeless or someone who is struggling more?

And what what we wanted to be what we wanted to do is really be intentional about making sure that that $500 made a difference and could shift someone out of poverty.

And what we know from the storytellers is that has made a difference.

So my favorite story is A is about a young man and his three sons, single dad, three teenage kids, and he's going to work every single day and struggling to take care of his family, hasn't been able to do anything fun.

His son was struggling in school.

The family dynamics were difficult just because of the pure stress.

And and that $500 for him did a couple of things.

One, he took his kids skating.

And I don't think as as a family, they went and did something together.

And I don't think we realized for those of us who can just go do that, how important that is to a family unit.

Well, the other thing he did as a son was you can't spend your life in fight or flight.

No, you can't.

You can't you cannot not not survive and not you can you can survive like that, but you certainly can't thrive like that.

And then he also used the money to get tutoring for his son, who is getting Season D's, who is now getting A's and B's.

And then he didn't have to worry about he didn't have to choose whether or not he bought enough cereal for his teenage boys or if he bought insulin for his other son.

But the part that is the part that gets me in the word I like to share about our pilot is what we heard from people is it gave them room to breathe.

Mm hmm.

And I just don't think the power of somebody being able to just sit down and go, Let me look past tomorrow morning.

Let me look into next week or the week after.

So the other thing he did is this offered an opportunity to breathe.

He started to take additional classes at work so that he knew this income was going away, so that when the income went away, he might be able to get a promotion or some bonuses that would help supplement that.

That's what we did for that family.

And so we know it made a difference.

So, Abigail, I know you you were kind of the on the ground person in terms of program implementation.

How did I guess what was your experience in terms of who got selected?

And in the research piece, there will be a curve.

Those who those who had this kind of success with it, some had outsized success.

They went to school and ended up with a whole nother degree.

And there's going to be some people like, well, they you know, they didn't do much with it.

What's your analysis of that and how how do you how do you how do you interpret the fact that there's going to be some hits and misses in this thing?

You know, I think that any time that you run a research program, you open yourself up to, as you're calling them hits and misses and ebbs and flows.

Anecdotally, I think everything that we're seeing is profound.

So far I'm the boots on the ground, so I know all 110 of the recipients and feel it's a personal relationship with them.

And that's just been beautiful.

I get different check ins, spontaneous check ins from different recipients, just wanting to let me know that they were able to attend a cousin's wedding or letting me know that they are grateful that they didn't have to get a second job this month.

I think that we're also due for some differences in the impact of these dollars, given the rate of inflation recently, especially as it spikes during the middle of our demonstrations.

So that's certainly something that our researchers have have sat down and talked with us about, is that inflation is definitely going to vary What we had expected to see or what we might have seen in Stockton before before the pandemic.

To your first question of how did participants get invited into the program?

And are all sorts of things like that, that was ran by the University of Pennsylvania, as you said, it's really a rigorous process running a research program.

So we have what's known as a randomized controlled trial.

We have our 110.

We have a 132 control group.

All of those are randomly selected by eligible applicants by the University of Pennsylvania.

And what are they thinking about?

When will the final report, when, when are they thinking their research or their paper will be published, which is probably what this will result in.

But yeah, so we're expecting our formal data around June of 2024 and that report.

So just next year, year and a half from now.

Exactly.

And that data will include, you know, financial volatility, education and employment attainment, things like hope and mattering, different mental and physical volatility and wellness measurements on that.

In the meantime, though, we do get spending behavior.

So through our partnership with a disbursement partner and then the University of Pennsylvania, we're able to monitor where the dollars are being spent every month.

Victoria, I'm not sure one of you gestured at this, which is taking this these individual city and town ideas and research projects and then talking about national policy somehow the Earned Income Child Tax credit, 3000 for kids, 3600 for kids under five, married up 150 grand on the income.

They're part of the American rescue plan.

That's one thing that happened during COVID is that is is that a step in the right direction?

Is that what this ends up looking like, or is it some money coming back out of Social Security Administration?

How does what is it how do we implement it?

I think I think that I think, as you just outlined, the earned income child tax credit is is is one of the ways I think that's a perfect example of how this could work.

What we do know and what we have learned and know is that cities cannot afford to run these programs.

States can help a little bit, but this really has to be at the federal level.

And that's why the research and the data is going to be so important, because that's what we're going to need to convince them at the federal level that this is something that works.

But they've already seen changes with what they've done, what they've done with the see, let me just call it EIC, because every time I say it, it they go in different directions, but they, they've already seen the benefit of how families have been lifted out of poverty with that.

And so right now, because that's a program that the Fed, the federal government is is interested in, has done and is familiar with.

That's one way that we're pushing it.

But we're hoping to really educate people on guaranteed income.

I was at a conference in September that said where we learned that 55% of Americans now support some kind of guaranteed income program, which is huge.

I was in when I saw that as well.

Like, I was really surprised the number was that high?

Yeah, I mean, it does say we still have a lot of work to do.

Yeah, but certainly I bet there was a time when.

When the t. Oh yeah.

Right.

Nobody, not when Andrew Yang talked about it on the campaign trail.

Nobody.

Everybody thought he was out of his mind.

But we're seeing we're seeing how it really can affect.

And I think just real quickly, Tom, the other thing that's important in all of these cities is that each city got to design for their own city.

So in Tacoma, we focused on children.

We focus on, say, our one income families with kids with kids.

And so we were trying to look at a couple of things.

One, whether child care.

And the other thing was, you know, we have an affordability issue and a homeless issue in our in our community.

So we also wanted to see how this could keep people housed.

Yeah, other people focused on people who are getting their degree or, you know, so people focus on different areas.

But I think the way we focus was important for Tacoma and one of the cities was actually house payment related.

They dedicated it to rent, I think.

So, yeah, there's several different models and that's why it's great to be part of a research project is you're going to get to see a cross-section of what worked, what didn't, how is it most effective, What are the results?

So, so that's good.

Donna one of the things I liked about, you know, in your world and talking with you is that you have your your a Venn diagram of your foot, one foot talking with people of means and another foot talking with people without means.

And you are right in the intersection of those things.

So I want to hit you with some of the pushback, some of the things that you've probably heard and that you have to answer and talk about when you're having these discussions.

You know, the more generous we are, Donna, the less we're asking of the poor.

So why aren't we really hurting the poor in the long run, doing this kind of thing?

You know, you've heard it.

We have all we all just wait.

We have all heard it.

And yeah, I think that, you know, it has been a challenge.

And that's why I think the storytelling is so very important.

And also, too, there's you know, I always say there is a moral imperative to this, you know, but there's also an economic imperative.

I mean, this $6,000 that these individuals were getting for this for a year, it's going back into the community.

It's going back into the the economy.

And so, you know, it you know, one of the things that we did, not an offshore bank account.

Right.

Exactly.

And, you know, we and also to the you know, these individuals, it's not like it's going to the mayor's point.

They're not stopping, you know, they're not quitting their jobs.

You know, this is meant to be a supplement to their income.

And, you know, the the other thing is to I mean, it's it has really made a difference.

I mean, $500 has helped these families move forward.

Yeah.

And and it's also about dignity as well.

You know, poverty isn't a person of failure.

And that's one of the things that we've really tried to lift up, is that, you know, what are all the systems?

You know, we talk about collecting this data so that we can help to inform the policies that are out there that, you know, are helping people, but sometimes just, you know, keeping them right on the edge.

And, you know, this this really helped move those 110 individuals forward.

So here's here's another one.

I'm pulling these quotes out of some of these articles that I'm reading.

So here's here's one for you, Victoria.

The unintended consequences, Will we lose the low wage workforce we rely so much upon caring for the elderly, stores, restaurants, people aren't going to pay more.

There's going to be automation in.

Might it turn a good piece of the population into surplus to be sort of a Darwinian or apocalyptic end game?

At some point, Walt's the producers just say, Forget it.

So we lose all the if we have a guaranteed minimum income, these people, this group of folks aren't working anymore.

They're not producing the collectors.

Could they collect a check and they're surplus.

An unintended consequence.

What do you think about that?

A Again, it gets to and I'm I'm sorry, I'm sold and because that's just ridiculous to me but it gets that point.

$500 a month is not enough to live off of.

So so the idea that that that we will that we will lose this group of people and they will just stay home and collect their check is so wrong.

But what we are doing is we're actually giving them breathing room to actually scale up.

And so and so what we've got, we're actually helping them so they don't become surplus.

Exactly right.

So it's an opportunity for them.

One of the Stockton stories about a gentleman who actually, because he was an hourly worker, could take a day off his job to go interview for a better job.

And he got it.

So so to that, no real response except for that's ridiculous.

That here is one that I do buy a little bit.

Sure.

Aren't we to some degree and Abigail, you can try this one and you guys can't too.

Aren't we to some degree, however, subsidizing employers who are not paying a living wage?

I think, in fact, that having a guaranteed income and having a consistent base for employees sets the table for bargaining.

And actually, I've heard from a handful of different union workers that they think it would be a net benefit to their purpose because it creates some sort of standard where they do then have a typical income that they're able to bargain against and bargain.

This is the same argument with tipping.

Hey, it's nice to leave a big tip, but aren't I aren't I just telling the employer, hey, you can pay less?

I'm not sure about that.

How do you think about that?

You know, I hear what you're I hear what you're saying.

And I and I and I get the concept.

But again, I get back to that.

What we're doing is, I mean, these Alice are people who get up every day and go to work.

Right?

Right.

And they're but maybe they're not getting paid, but maybe not getting paid, but maybe they also have all the skills to get to the next level of the job.

Right.

And so and so I think that there are some jobs that are entry level and and that pay minimum wage.

And I'm I'm glad we live in a state or I live in a city where minimum wage is $15.

Right?

Actually, it's more than that now.

But but so I think that we're always going to have entry level jobs.

But but the idea is everybody comes in talent, entry level job and has an opportunity to move up to the state.

Exactly.

You're not stuck.

And a lot of our people get stuck because they don't have opportunities for growth.

And I think this breathing room that they get from a guaranteed income allows them that opportunity for person.

Let's mention this too, that ideally this is something you stay on across the generations.

This is something you that comes into your life and you cycle out and somebody else cycles in.

Right.

And I certainly think that for many families it has the ability to get them up and over.

What's typically known as the benefits cliff are just over that poverty line and into a sustainable form of self-sufficiency.

And it's such a tough area because you don't qualify for it.

You make too much to qualify.

You don't make enough to do.

It's a tough spot.

One of our recipients was, what is it, 20 or $22?

$22 too much?

Yeah.

To get any funding.

And what we did for her in a year was the fact that now she has paid off her bills up to her credit and qualifies to buy a house.

Last 40 seconds, Donna, to you.

What if people want to learn more, get involved?

Might there be another trial?

What do you want to leave folks with?

Wow.

Let's see.

We've been doing a lot of discussing about what what is next with this?

We certainly want to you know, we'd love to continue to do it, but I think for us, a big piece of it is just to continue to advocate, you know, advocate at the state level.

You know, our information is going to is has been informing at the national level the discussions going on.

So, you know, advocate, you know, right now there's a bill that just it just passed.

That's right.

Yeah.

So it's still 1045.

So House Bill 1045, call your state legislator.

They can they can help advocate on behalf of that.

But I think the other thing is to is really using that, you know, people who are struggling don't want to struggle.

I mean, it's really research shows they want to go to work.

Right.

Exactly.

It's about a hand up and not a handout.

And so changing that narrative, I think, is really key.

Here's the problem.

14 million US households live in poverty.

But the other problem, though, is that every dime the government gives to somebody is taken from somebody else.

And while the uber rich are often cited as examples of those who can do more, it's the regular old W-2 wage earners that are quietly being taxed out of the middle class.

The bottom line, the war on poverty, like the war on drugs, hasn't been won with $20 trillion spent in the past 60 years and the same problems rolling through the generations.

But with that said, maybe trying something new can't hurt, and it might even provide savings if the existing 126 programs, safety nets, bureaucracy can be eliminated or reduced.

I hope this program got you thinking and talking to watch this program again or to share it with others.

Northwest now can be found on the web at kbtc dot org and be sure to follow us on Facebook and Twitter at Northwest.

Now a streamable podcast of this program is available under the northwest now tab at kbtc dot org and on Apple podcasts by searching northwest now that's going to do it for this edition of Northwest now until next time I'm Tom Layson thanks for watching.