US experiences with guaranteed income schemes are promising

JAhed Miah don’t worry about the rent anymore. For much of his time at the State University of New York at New Paltz, the 23-year-old lived on a tight budget. When he needed textbooks, he asked his brothers for money. But since October 2020, Mr. Miah has received $500 a month through a guaranteed income program in Hudson, New York. He spends most of it on housing costs, but now he can also afford to donate to his mosque and take his nieces and nephews out for ice cream. “I am not a financial burden on my family,” he says.

Hudson’s is one of more than 80 such programs across America. They provide direct cash payments in fixed amounts that people can spend as they wish. Most are small and time-limited: Hudson’s only serves 75 residents for five years.

Results from pilot projects already underway show that the payments, unsurprisingly, improve the lives of participants. After one year, recipients at Hudson reported greater emotional and physical well-being as well as better relationships. Critics fear that unconditional cash transfers will discourage people from working. So far, Hudson and a similar experiment in Stockton, Calif., have found the opposite, perhaps because the payments give people the flexibility to spend time on training or job applications. The Center for Guaranteed Income Research at the University of Pennsylvania is evaluating several programs and hopes to release more results later this year.

Unlike a universal basic income, which would give money to everyone, guaranteed income programs generally target the poor. The Hudson pilot selected participants based on factors such as gender and race. One in Chicago focuses on former prisoners.

Scaling across America would be difficult. Permanent schedules may well affect the willingness to work. And finding money for bigger programs may prove impossible. Some cities, including Pittsburgh and Minneapolis, used federal funds from the American Rescue Plan, the stimulus bill passed last March, for their experiments. But most programs have relied on charitable donations. Jack Dorsey, who founded Twitter, for example, paid mayors $15 million for guaranteed income to help fund the pilots.

For now, fans can celebrate the positive effects for people like Mr. Miah. He plans to move to New York with his brother and work as a medical assistant. He will continue to receive cash payments for the next four years. Instead of asking his older brother for money to cover books, Mr. Miah will help pay the mortgage. “We can support each other,” he smiles.

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This article appeared in the United States section of the print edition under the headline “Money, money, money”

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