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Examining Results Of The Stockton Income Experiment

NOEL KING, HOST:

In Stockton, Calif., 125 people were given $500 a month, no strings attached. About one person in every four in that city lives in poverty. And this experiment lasted for two years. So what did we learn? Here's Lily Jamali from member station KQED.

LILY JAMALI, BYLINE: When Zohna Everett was randomly selected for Stockton's guaranteed income trial, the extra money was a relief.

ZOHNA EVERETT: For me, it was easier, a lot easier. It's kind of like, you know, I didn't realize I needed help until I had the help, you know?

JAMALI: The monthly payments were part of Stockton's million-dollar experiment with guaranteed income funded by a group of Silicon Valley donors. It paid for Everett's phone, utility bills and car insurance.

EVERETT: Getting that, the constant funds, it was just, like, I could breathe.

JAMALI: Before the trial, she was doing gig work. Then she landed a full-time job but stopped working when she got COVID. The day we speak, Everett had just gotten back from a visit to a check-cashing place. Money's been tight for her since the two-year trial ended in January. While she wasn't able to pay off debt, she says it kept her from taking on more. And the money did something else. It helped her escape an abusive marriage.

EVERETT: I think finances and abuse is a big issue in marriage. And I'm glad that I was still in the program when I left. It helped me move.

JAMALI: It helped you get out of that situation, this money. Is that what you're saying?

EVERETT: Yeah.

JAMALI: One finding from the trial was a big improvement in people's emotional health, another, more financial stability. Former Stockton Mayor Michael Tubbs helped spearhead the trial. He says the findings poked holes in a common criticism of cash payouts.

MICHAEL TUBBS: The biggest takeaway - and let's shout it from the mountaintops - is that a guaranteed income, I repeat, giving people money, I repeat, did not stop people from working.

JAMALI: And there are stereotypes about where the money ends up going. Five years ago, Anna Popova co-authored a World Bank study analyzing similar experiments around the world and how much money went to so-called temptation goods.

ANNA POPOVA: Say, alcohol or tobacco, or even some papers included donuts in that category.

JAMALI: Popova's analysis found a clear pattern.

POPOVA: Overwhelmingly, almost without exception, the programs did not increase spending on alcohol and tobacco.

JAMALI: In Stockton, participants were given prepaid debit cards. Forty percent of the payouts were withdrawn as cash and couldn't be tracked. But of the spending that could be tracked, most went towards food and monthly bills. Ultimately, any discussion of basic income circles back to cost. It's expensive. USC macroeconomist Diego Daruich says making universal basic income truly universal would mean tax rates go up, potentially, by a lot. But he acknowledges the real cost is a guessing game.

DIEGO DARUICH: UBI programs have become very popular in the last few years. But we realize that there is very little evidence about the consequences if you were to run this at a large scale and in the long run.

JAMALI: Back in Stockton, Zohna Everett says she wishes the money was still coming each month. But she's grateful for the escape it afforded her.

EVERETT: I feel so free. I feel like I can breathe. I may not have everything...

JAMALI: But, she says, she has peace.

For NPR News, I'm Lily Jamali.

(SOUNDBITE OF OATMELLO AND LATE ERA'S "GOOD NIGHT") Transcript provided by NPR, Copyright NPR.