Oakland, California, will be launching one of the largest guaranteed income programs in the nation, giving $500 of unconditional cash each month to 600 low-income families of color.
In an announcement on Tuesday, Mayor Libby Schaaf said that Oakland residents will be able to apply to the program later this spring and will be randomly selected to get the monthly cash for 18 months, no strings attached.
To be eligible, residents would have to be BIPOC (Black, Indigenous or other person of color), earn below half of the area median income — or under $59,000 per year for a family of three — and have at least one child under 18.
“In the U.S., our systems by design hold back Black and brown families,” said Jesús Gerena, head of nonprofit Family Independence Initiative, which is leading the pilot, during the virtual press conference.
The program is meant to tackle the racial wealth gap in a community that is disproportionately Black, Latinx and Asian, but where the annual median income is over twice as high for white residents as Black residents.
“The poverty we all witness today is not a personal failure, it is a systems failure,” Schaaf said in a news release. “Guaranteed income is one of the most promising tools for systems change, racial equity, and economic mobility we’ve seen in decades.”
A smaller-scale guaranteed income pilot in Stockton, just an hour’s drive away, has delivered impressive results: a study on the program’s first year, from February 2019 to February 2020, found that its 125 recipients got full-time jobs at over twice the rate of non-recipients, were less anxious and depressed, and reported improvements in emotional health, well-being and fatigue.
“I’m hella proud of Oakland today,” former Stockton mayor Michael Tubbs, who leads the Mayors for a Guaranteed Income initiative, said in the virtual announcement Tuesday. “The issue isn’t that people don’t want to work — the issue is that the economy doesn’t work for people.”
Tubbs noted that critics of Stockton’s program had expressed concerns that people would stop working and spend the cash on drugs and alcohol — but the study found that recipients spent the cash on basic needs, such as food, clothing and utilities, with less than 1% going to alcohol or tobacco.
The idea of a basic income, or free money with no conditions, to improve economic and other outcomes for low-income people is not new. It’s been tested at significant scale in countries such as Kenya and India with positive results, including improved nutrition, and in Finland, where preliminary results showed improved health and well-being.
Here in the U.S., some pilot projects have shown promise: A program by Magnolia Mother’s Trust in Mississippi gave $1,000 per month to Black moms, who found it made a difference. And a new program in San Francisco will give $1,000 per month to Black and Pacific Islander pregnant people aiming to improve maternal and infant mortality rates.
The program comes as people of color in the U.S. have been disproportionately hard hit by the coronavirus pandemic, both in terms of hospitalizations and deaths, as well as in job loss.
Amid the pandemic, millions of Americans have received direct cash payments from the federal government in the form of three rounds of stimulus checks.
Schaaf is hopeful that Oakland’s pilot, which will be studied by external evaluators, can set an example for the benefits of guaranteed income programs as public policy. This pilot is funded not by taxpayers, but entirely by philanthropic investor group Blue Meridian Partners.
“We believe we cannot ‘charity’ our way out of poverty or other social problems,” Schaaf said, noting that she and others have been advocating for “at least” a statewide guaranteed income.