Give poor people a guaranteed income and let them spend it however they please

Give a Buck is Mashable’s deep dive into Universal Basic Income — an idea gaining currency in a time of pandemic and mass unemployment. Now more than ever, our future depends on whether we can pay the bills.


When Tamara Ware received her first $1,000 payment from Magnolia Mother’s Trust she set aside $600 for car parts. Another $100 went to a friendly local mechanic who installed the parts and charged her far less than she would’ve paid elsewhere. Then she took her three daughters, ages 16, 13, and 12, for a celebratory dinner. 

“I took my girls out to eat because they deserved it,” she says. “We have been going through hard times ourselves. I wanted them to see it was OK. I wanted them to enjoy their moment with me.” 

Ware is a single mom who, until the coronavirus pandemic led to mass layoffs, worked at a daycare in Jackson, Mississippi. The full-time position paid the state minimum wage of $7.25. Her annual salary amounted to $15,080. Living in federally subsidized housing and receiving child support had not boosted Ware out of poverty. 

Her fate changed suddenly in March when she was selected to participate in a guaranteed income initiative run by Springboard To Opportunities, a local nonprofit agency that helps families living in affordable housing “realize their dreams.” In 2018, its Magnolia Mother’s Trust initiative launched by providing $1,000 in cash each month to 20 low-income, African-American mothers in Jackson for a year. 

Ware became a participant when the pilot recently expanded to include 80 new women. 

On her application Ware wrote: “Please pick me.” 

The project will last until February 2021 and is partly funded by the Economic Security Project, a nonprofit that works to advance cash policies like guaranteed income. 

Guaranteed income provides unconditional cash payments that can supplement a recipient’s earnings. Universal basic income, a form of guaranteed income and a term that might be more familiar to Americans, is based on the premise of giving everyone enough cash to survive regardless of whether they work. So far, the Economic Security Project has given $1 million to a guaranteed income project in California called the Stockton Economic Empowerment Demonstration. It has provided the Magnolia Mother’s Trust with $150,000

The experiment is testing what happens when you give cash aid to people who desperately need it, with no strings attached. Though there have been other guaranteed income experiments in the United States and various countries, this is the first to specifically target African-American mothers who live in poverty. In addition to demonstrating how guaranteed income might work in the U.S., the Magnolia Mother’s Trust is challenging myths and stereotypes, often rooted in sexism and racism, about why poor people can’t be trusted with cash they didn’t personally earn. 

“We were able to see folks dream again”

So far, Ware has received $2,000. She doesn’t need to continue proving that she’s poor enough to qualify for aid, as recipients of government welfare and disability benefits are required to do. No one checks to see if she’s using the money in ways they deem legitimate or appropriate. Ware can spend the money however she pleases. Her purchases have included gas, groceries, utilities, and school supplies. 

She bought a bedroom set for her oldest daughter, whose room was previously sparsely decorated. She also set aside $400 for savings. “I never did that in my life,” Ware says. 

Purchasing the bedroom set was its own revelation. 

“It gave me the opportunity to be able to do what I wanted to do for my child,” says Ware. “It made me feel whole as a mother.”

This is exactly what Aisha Nyandoro, chief executive officer of Springboard To Opportunities, envisioned for the Magnolia Mother’s Trust. Nyandoro wanted the participating mothers to use their cash however they chose, but she knows progress can’t be measured in receipts. Simply having enough improves how these women see themselves and their futures. 

“It gave me the opportunity to be able to do what I wanted to do for my child.”

“Cash matters on so many different levels,” says Nyandoro. “I said let’s do something totally different. Let’s give people money — not vouchers, not subsidies — and not have people prove to us that they are poor enough for support. Imagine having to go back to prove that you are poor enough. What would that do to you psychologically? What would that do to your self-worth?” 

In the pilot’s first year, participants’ most common expenses were transportation, bills, education, credit improvement, and buying a home. Halfway through the pilot, none of the women had used an emergency lender. At the outset, fewer than half said they could afford children’s school supplies. At six months, nearly all of them could. 

Many of the women worked in low-wage positions in education, health care, retail, and the food industry but were finally able to work toward long-term professional goals, like getting a specific certification or degree. 

For Ware, the extra cash resolved a problem that had long troubled her: How could she pursue higher-paid jobs without an interview outfit to match? Afraid of not looking the part, Ware says anxiety and insecurity would kick in and she’d temporarily abandon her ambitions. Now, if she wants to go on an interview, she knows the right look is her reach.

“In a year, just by virtue of giving folks this money, we were able to see folks take care of themselves, and we were able to see folks dream again,” says Nyandoro, who believes the pilot results demonstrate that we should trust people with guaranteed income.  

“My pushback is why can’t we? We can but we choose not to,” she says. “Why do we make that choice? What does this say about you personally?”

“You’re poor because you don’t have money”

The idea of no-strings-attached cash aid might seem anathema to many Americans, who worry recipients will not spend the money wisely. But embedding such distrust of the poor in government aid policies is a relatively new phenomenon in American politics, says Mehrsa Baradaran, a professor of law at University of California Irvine who studies banking law and financial inclusion. 

Baradaran says that during the Great Depression President Franklin D. Roosevelt dealt with poverty as a structural problem to be addressed with policy reforms. Politicians typically aimed their ire at banks and corporations instead of shaming the poor.

That attitude toward income inequality shifted in the wake of the Civil Rights and feminist movements, when activists began demanding equality and economic justice. At the same time, the battle against Communist ideas, amidst the Vietnam War, focused on how capitalism and markets are right and moral. Anyone asking for a so-called handout was deemed communist. 

Baradaran says that while humans might be naturally skeptical of others gaining an unearned advantage or benefit, that trait has been weaponized in the U.S., with a specific emphasis on race and gender. Poor people of color, especially black women, are often viewed as undeserving of assistance or even sympathy. (Congressional Republicans’ original proposal for the first coronavirus stimulus package, as Baradaran noted in the Atlantic, would’ve given poor Americans half the financial assistance that middle-class families received.)

“The underlying idea is that you’re poor because you don’t understand money. But you’re poor because you don’t have money.” 

Research suggests skepticism of a concept like guaranteed income isn’t warranted. The Earned Income Tax Credit, a decades-old tax-based cash payment given annually to low-income workers who qualify, reduces poverty and is linked to better health, particularly for mothers and children. 

A Finnish experiment conducted from 2017 to 2018 gave €560 (approximately $628) each month to 2,000 people who’d previously received unemployment assistance. The researchers found that the payments had no significant effect on whether or not people kept their jobs. It did lead to noticeable positive effects on their perceived financial, physical, and mental well-being, as well as increasing confidence in their future. 

“People aren’t dumb,” says Baradaran. “The underlying idea is that you’re poor because you don’t understand money. But you’re poor because you don’t have money. It’s not about decision making. That is one of the most dangerous American myths we tell about the poor.” 

Natalie Foster, co-chair and co-founder of the Economic Security Project, says that in America trust is commensurate with one’s income level. The less a person earns, the less they’re trusted to spend money. But the results from the SEED and Magnolia Mother’s Trust projects demonstrate that when people receive a basic income, they’re using it to meet their basic needs. 

Foster says that it’s possible Americans who are skeptical of cash aid will reconsider their doubts as the country copes with the coronavirus pandemic, which has put tens of millions out of work and forced people to apply for unemployment and line up at food pantries, perhaps for the first time in their lives. 

House Speaker Nancy Pelosi said Monday that Congress could consider guaranteed income as part of the government’s solution to the economic crisis. Sen. Kamala Harris, along with other members of Congress, recently lobbied Pelosi to prioritize recurring cash payments for those most “at-risk,” including low-income communities, gig and service workers, and immigrants. 

“For a very long time now we’ve built a system that really doesn’t trust people,” says Foster. “It tells people how to spend their money. The big idea is to rethink that and say people actually know what they need — they just don’t have the means to get there.”

Ware says she’s particularly grateful to receive a guaranteed income during the pandemic. She filed for unemployment after being laid off but is not panicking about how she’ll buy groceries or pay bills: “I sleep better at night knowing I have this coming in.” 

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