A California city in economic recovery is embarking on a social experiment: it will give a test group of about 100 families $500 a month for 18 months with no strings attached to see if that guaranteed monthly income helps alleviate economic instability and inequity.
Stacia West, an assistant professor in the College of Social Work, along with Amy Castro Baker, an assistant professor at the University of Pennsylvania, will spend about two years evaluating the project, dubbed the Stockton Economic Empowerment Demonstration (SEED).
Stockton, California, is a diverse community with a population that’s 40 percent Latino, 21 percent Asian, and 12 percent African American. More than half of the working-age population earns the minimum wage.
The idea for SEED was born when Stockton’s mayor, Michael Tubbs—who, at 27, is the nation’s youngest mayor of a large city and Stockton’s first African American mayor—met Natalie Foster, co-founder of the Economic Security Project, a nonprofit formed to advance the concept of guaranteed income.
While similar experiments have occurred abroad, Stockton will be the first American city to lead a test of basic income.
West said the project is unique because of its partnerships; while it’s being led by the mayor’s office and the Reinvent South Stockton Coalition, it’s funded entirely with private money—including initial investments by the Economic Security Project and the Goldhirsh Foundation.
“To fully leverage social change and policy innovation, economic research needs the support of public and private partners,” West said.
Research partner selection was led by SEED Director Lori Ann Ospina, who previously ran a groundbreaking experiment evaluating the impact of stable scheduling practices on front-line retail workers at the Gap. Disbursements are expected to begin in the first quarter of 2019.
While SEED is active, West and her co-researcher will conduct multiple online surveys and in-depth interviews with participants and a control group of residents.
West has studied similar economic programs.
She recently led a study of the Dollywood Foundation’s My People Fund, which provided families who had lost their homes in the Gatlinburg fires with $1,000 a month for six months and a final gift of $5,000. In that case, she found that cash transfers, compared to specific donations, may be an important and underutilized approach to recovery following a natural disaster.
“Both programs have a consistent cash transfer, although the My People Fund was created in the wake of a natural disaster while Stockton is implementing a cash transfer to support the overall economic health of residents,” West said.
West’s research partner on the project, Amy Castro Baker, has done prior research on foreclosure and income instability looking at the impact of financial policies on racial disparities.
“As the ethnic makeup of our country continues diversifying, the racial wealth gap grows even more critical,” Baker said. “With more than 60 percent of the population comprised of people of color and an average income $15,000 below the national average, Stockton is an ideal background to test and study bold economic interventions that could have national policy implications. People are working more but making less. We need new paths forward.”
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CONTACTS:
Amy Blakely (865-974-5034, ablakely@utk.edu)
Saadia McConville, Economic Security Project (410-693-5196, saadia@economicsecurityproject.org)