$500 per month help for the Working Poor?

$500 per month help for the Working Poor?

What if we could help the working poor of Los Angeles County with  a smidgen of help of $500 per month?
The concept of universal basic income, which has received a boost from economic conditions during the pandemic, has just received another favorable vote.

This one comes from a study of a two-year guaranteed income project in Stockton, which delivered monthly no-strings-attached checks of $500 to 125 mostly low-income residents.

A preliminary analysis of the first year of the program, through February 2020, found that recipients were “healthier, showing less depression and anxiety and enhanced well-being” than those in a control group not receiving the stipends.

Poverty is not the result of individual bad decisions; it’s the result of policies that keep people down.


They also experienced less month-to-month fluctuations in household income. Most notably, they had greater success finding full-time work or upgrading their employment. That turns on its head the conventional conservative argument that such programs will disincentivize the search for work and turn recipients into layabouts.

At the start of the study period in February 2019, according to the analysis, 28% of recipients had full-time employment; a year later, 40% did. By comparison, full-time employment in the control group rose only from 32% at the start to 37% after a year.

In other words, recipients were able to move into full-time work at about twice the rate of the control group.

“What we saw was that individuals were able to leverage the $500 in ways that enabled them to show up and fill out a job application — if you’re working part time and taking care of a child, there’s not a lot of time in your day,” says Stacia West, an expert in social work at the University of Tennessee. “Financial scarcity creates time scarcity.”

In the Democratic Party primaries, a newcomer, Andrew Yang, had basic income as his core policy. He phrased the policy as “Freedom Dividend” and the idea was to give every American 1000 dollars every month, which they would be free to choose how to spend.

Basic income, health and poverty

The first comprehensive systematic review of the health impact of basic income (or rather unconditional cash transfers in general) in low- and middle-income countries, a study which included 21 studies of which 16 were randomized controlled trials, found a clinically meaningful reduction in the likelihood of being sick by an estimated 27%. Unconditional cash transfers, according to the study, may also improve food security and dietary diversity. Children in recipient families are also more likely to attend school and the cash transfers may increase money spent on health care.


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