THOUGHTS
A California Town Empowered Struggling Folks By Giving Them Money For a Year
It was a research study on basic income.
There was a curious experiment in one California city that showed us what a city-wide version of what a universal basic income (UBI) could look like — especially when its residents showed great ambition, resourcefulness, and intelligence.
In the city of Stockton, California, there was a randomized controlled trial that was conducted by scientists and sociologists to research the effects of injecting money into an area where folks struggled to make ends meet.
This project was called SEED, which stands for the Stockton Economic Empowerment Demonstration. It took place between the months of February 2018 into February 2020.
Afterward, the scientists published their research in 2021. You can read the full research report below (if you’re so inclined):
For every month between February 2018 to February 2020, $500 was distributed to 135 people that were either below or around the city’s median household income. Some people were working but still met the under-the-median criteria. After receiving these funds, each participant was eventually able to score and acquire a full-time job, which meant that they no longer qualified.
This jump towards eventual employment went as high as 200%. Yes, you read that correctly. Since these individuals with better-paying jobs no longer qualified, they became an ever-growing control group that did not receive this special funding. In turn, new people were brought into the study, causing the number to be 200%.
Curiously, unlike traditional unemployment benefits, participants were not notified that their ability to receive money would be contingent on searching for a job. Instead, when they received their money, they obtained it via debit card and were allowed to spend it on whatever they liked.
Since they could do whatever they wanted with the money, the participants used it for practical purposes, such as for rent, utilities, food, auto-repairs, and so much more.
Another thing discovered from this study was that more participants were able to enjoy life better since they got to spend more quality time with their families and friends. Plus, some of them used the $500 to improve on their existing skillsets with training, courses, and workshops.
For example, one man was eligible to receive a real estate license but never had the time or money to do so. The $500 allowed him to take time off his regular job, sit down to write his exam, obtain certification, and achieve gradual financial independence in another profession.
That’s not too shabby for $500.
Overall, the $500 allowed the participants some financial alleviation, resulting in stronger and more supportive relationships, and alongside it, a better career. This just goes to show that when the times are tough, people spend their money wisely.
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