When Maile Chand reminisces about her 2016 pregnancy, the first thing that comes to mind isn’t how she prepared her daughter’s nursery or vetted baby names. Instead, she remembers constantly struggling to find enough money for food and rent in San Francisco.
Chand was just 20 years old at the time, living in the nation’s most expensive city, and working a low-paying retail job while attending community college. Navigating San Francisco’s public assistance labyrinth felt like another full-time job. The assistance never covered everything, she remembers, and she often found herself straining to secure the supplies she needed to take care of her baby. “In going through the system,” says Chand, now 25, “I just felt like there were so many gaps.”
Now, a new pilot program in San Francisco aims to use the once-radical idea of guaranteed income to help new mothers just like her. Starting this summer, the Abundant Birth Project will give $1,000 per month to 150 Black and Pacific Islander mothers for the duration of their pregnancies and the first six months of their children’s lives. The experiment is the latest in a growing collection of programs across the nation that aim to address systemic poverty, inequality, and racism not by reworking fragmented safety net programs, but by giving additional cash directly to people in need. In the last five years, similar programs have been designed in at least half a dozen cities. On Tuesday, New York University announced the establishment of its new Cash Transfer Lab, which will study the impact of policies like these.
Long considered pie-in-the-sky ideas in the U.S., guaranteed income and universal basic income (UBI) programs have gained increasing attention over the last couple of years. Entrepreneur Andrew Yang made UBI central to his 2020 presidential campaign, and the urgency of the economic crisis triggered by the coronavirus pandemic spurred Congress to send Americans three rounds of one-time direct payments to provide emergency financial relief and stimulate the economy.
The San Francisco program will be the first pilot in the U.S. to focus on how guaranteed cash assistance affects health outcomes for pregnant moms and their babies, and Chand has come on board as a community researcher. There’s evidence it could work: a similar program launched in the nearby city of Stockton in 2019 helped some of the city’s poorest residents improve both their health and finances. Other countries including the United Kingdom, Ireland, France, Germany, the Netherlands and Sweden offer parents a universal child benefit. But no matter how successful direct payment programs may become, significant barriers remain to implementing them on a larger scale. Local governments are cash-strapped, while researchers, policymakers and beneficiaries of these programs face persistent stereotypes around the notion of no-strings attached cash and how the money will be spent.
“There’s so many negative narratives around low-income families, and in particular, low-income Black families as being people who waste welfare dollars, who are always trying to scam benefits systems,” says Dr. Zea Malawa, who leads Expecting Justice, an initiative that aims to address San Francisco’s birth inequities and which is running the Abundant Birth Project. “But we in this country have a system where even when you work really, really hard, sometimes even at multiple jobs, oftentimes you can’t meet all of your basic needs with the money that you earn.”
So far, most long-term supplemental cash experiments have been run as small pilot projects reliant on private funding—including the Abundant Birth Project, which got its money largely from foundations with some support from San Francisco’s Department of Public Health. But advocates of cash-payment programs are hoping that the COVID-19 stimulus checks, growing bodies of research showing the positive impact of payments like America’s Earned Income Tax Credit, and successful direct cash experiments abroad will give the idea momentum in the U.S.
Malawa says now is as good a time as any to try. The pandemic has underscored the problems—like unequal access to quality health care and worse financial stability—that she and other public health researchers have been talking about for decades, and she hopes that her pilot can lead to bigger guaranteed income projects in the near future. “In the face of yet another pressing reason to be authentically addressing the social determinants of health, I’m really excited to be piloting something like this so that going forward, we don’t just throw our hands up in the face of 40 years of no progress,” she says, “but we can try a whole new road up the mountain.”
Improving maternal health in San Francisco
As a pediatrician who grew up in San Francisco, Malawa has seen firsthand how often moms and babies of color in her city suffer from income disparities and racial inequity.
The median household income for Pacific Islander and Black families in San Francisco is about $67,000 and $30,000 respectively, compared with $104,000 citywide. The city’s widening wealth gap means these families face challenges including unstable housing, inadequate nutrition and worse education opportunities. Nearly 14% of Black infants in the city are born too early compared with 7.3% of white infants, and Pacific Islanders have the second highest rate of preterm birth at 10.4%. Black people make up half of San Francisco’s maternal deaths and 15% of infant deaths despite being just 4% of all births, according to city data.
Research shows that burdens such as financial stress and housing instability during pregnancy are associated with lower birth weights, increased preterm deliveries, longer hospital stays and other health problems once children are born. These financial obstacles can make it more difficult for children to stay healthy, do well in school, attend college and obtain stable jobs of their own as adults.
Malawa has fought racial inequities in perinatal health at Expecting Justice since 2017, but she says the group wanted to find a new strategy to supplement its other work. She came across an article about a universal basic income experiment in Manitoba, Canada. In 2001, the province began offering monthly cash stipends to all low-income pregnant women. When researchers examined all mothers who had children between 2003 and 2010, they found the cash was associated with significant reductions in low-birthweight babies and preterm births, increases in breastfeeding, and shorter hospital stays. Other research found that despite the unconditional nature of the money, many people spent it on food, baby supplies, rent and other necessities to improve their lives.
Malawa and her team had a hunch that a cash supplement for mothers in San Francisco might help the same way it did in Canada. “This cash intervention can really be seen as a structural intervention, to really target poverty and the root causes,” says Deborah Karasek, a perinatal epidemiologist at the University of California, San Francisco who is co-leading the research evaluation of the Abundant Birth Project. “If you focus on centering birthing people, it’s actually going to have impacts not just for those births, but longer term and potentially generational impacts in the community.”
Success in Stockton
Around the time that Malawa learned about the experiment in Manitoba, there was another guaranteed income success story developing much closer to home.
Eighty-three miles east, Stockton, California resident Tomas Vargas, Jr. was struggling financially. He was supporting two young children and a wife on a part-time warehouse manager salary. But then his city created a program called the Stockton Economic Empowerment Demonstration (SEED) that would provide 125 individuals with $500 per month for 24 months. The program took efforts to ensure recipients would continue receiving most government benefits they had previously qualified for, or be compensated by the program to make up for benefits they lost unexpectedly due to the modest income bump.
Vargas signed up for the experiment. After he and the other 124 individuals began collecting the $500 cash payments in February 2019, they collectively reported having more energy and a stronger sense of emotional wellbeing after year one of the two-year pilot. (Data from the second year of the program has not yet been publicized.) The monthly funds gave Vargas the flexibility to pursue better employment at a less stressful, more lucrative job that offered him more hours. “I feel a lot better, healthier,” he said on a recent press call. “Every day, I get to wake up and enjoy time with my kids. It’s amazing to see them grow. My wife, we enjoy time together. I didn’t have that before.”
The cash payments helped other participants land better paying jobs too—contrary to guaranteed income critics’ fears that people will work less if they get free cash. When the Stockton program started, just 28% of those who would get the cash had full-time employment. One year worth of $500-per month payments later, 40% of SEED recipients were employed full time. Recipients also tended to use the cash payment for necessities such food, utilities and automobile repairs rather than recreation and self-care. Between February 2019 and February 2020, recipients reported using 37% of the funds on food. They used less than 1% of the funds on alcohol and tobacco.
But a 125-person experiment in a city of 313,000 is hardly indicative that a direct cash initiative could work on a national scale. And cash-based programs, especially those that exclude middle- and top-income earners, can have political consequences for those who implement them. In Stockton, Democrat Michael Tubbs’ 2020 mayoral re-election campaign may serve as a cautionary tale in how risky it can be. He faced criticism from wealthier taxpayers that his politics were too progressive after starting the SEED pilot in 2019, and despite clobbering his GOP opponent by 41 points in 2016, he lost his 2020 race to a Republican candidate by 13 points in a county that has voted for a Democrat in the last four presidential elections. “This is the smart guy who thought just handing out taxpayer money to people was a good idea,” Jon Fleischman, publisher of a wide-reaching California political blog and former state GOP official tweeted at the time. “I guess he didn’t give it away to enough people.” (SEED was fully funded by philanthropic dollars.)
Political and logistical barriers
Ever since the wildly popular ‘Townsend Plan’ proposed monthly paychecks for seniors in the early 1930s and paved the way for Social Security, Americans have had a soft spot for the social and economic promise of free money. Yang capitalized on the long-running idea during his 2020 run for president on a platform based primarily on UBI—a platform he’s still campaigning on in his current quest to become the mayor of New York City.
But even if nearly half of Americans like the idea of the government providing a UBI to all citizens, according to a 2020 Pew Research Center poll, the direct cash programs have historically run into logistical and political hurdles that have made them nearly impossible to scale beyond small groups of recipients in individual cities.
One fundamental problem is that most safety net programs in the U.S. are tied to how much other income a person earns. Receiving a direct cash payment could push a recipient over their income threshold and cause them to lose access to other benefits. To get around this, Yang’s presidential campaign proposed completely eliminating most other government welfare programs in exchange for a new UBI program.
Malawa, from the Abundant Birth Project, says that approach could be harmful to the people who depend on benefits like food stamps and housing vouchers. She is grateful that Yang helped normalize the idea of cash-based programs, she says, but wants any guaranteed income to supplement, not replace, people’s existing benefits. Both the Abundant Birth Project and SEED are guaranteed income experiments, which differ from UBI experiments in that they are targeted to supplement the incomes of low-income people, not everyone. A national guaranteed income would ensure all adults make a set income floor, whereas a national UBI would give all adults the exact same direct payment, regardless of how much or how little money they make.
These policy distinctions fall under the same overarching principle, says Natalie Foster, the co-chair of the Economic Security Project, a network that supports the exploration of guaranteed income and helped fund SEED and the Abundant Birth Project. “The big idea here is the guarantee that no matter what you do, you cannot fall below this amount—that no matter what you do, you are guaranteed monthly income regardless of what happens in the labor market, whether a pandemic hits, whether wildfires from the climate crisis that now happen every fall in Northern California, or if Texas freezes over,” she says.
But as these kinds of programs gain momentum, philanthropists partnering with individual cities won’t be a sustainable model, says Sukhi Samra, the director of SEED and of Mayors for a Guaranteed Income, a group that Tubbs co-founded to advocate for expanding guaranteed income programs. “Local governments [and] state governments don’t typically have the dollars to be funding a radical expansion of the social safety net,” Samra says. “This has to be federally funded.”
There are plenty of ways to do that, she adds. Yang proposed a value added tax on goods and services in addition to taxes on carbon and financial services to pay for his UBI proposal. While progressives argue that could result in poor people paying a disproportionate share of their income, Samra points to other models such as Los Angeles, where the city is repurposing some police funds for a basic income pilot, and to legislation such as the “ultra millionaire tax” introduced by Sen. Elizabeth Warren, or the LIFT the Middle Class Act, introduced by then-Senator Kamala Harris, which would pay for basic income payments to low- and middle-class families by rolling back former President Donald Trump’s 2017 tax cuts.
There could be some warming to the general concept among Republicans: Sen. Mitt Romney recently introduced a bill that would establish a child allowance, and many Republicans supported the dramatic expansion of the existing Child Tax Credit in the latest COVID-19 relief package. But with an evenly-divided Senate, most advances in federal direct payment benefits still seem improbable for now.
In the meantime, community-led programs are forging ahead and working on overcoming barriers of their own. The biggest obstacles they face revolve around skepticism—both from outside observers and from the people they’re aiming to serve. Conservative critics argue the money will lead participants to stop working and spend the cash on drugs and alcohol, which is a stigma the potential participants have internalized, Samra says. And even though SEED’s results contradicted this, Malawa knows the Abundant Birth Project will need to prove the point again. That’s part of why she hired community researchers like Maile Chand, to help reach mothers who often distrust medical and government institutions and ensure her program earns the trust of the cash recipients.
While direct cash programs like the Abundant Birth Project or SEED might be a long way from expanding to large-scale, federally funded efforts, advocates still say they have made enormous strides. “When we first announced in 2017 that we were going to do a basic income pilot, many of you, or your editors, or your friends thought we were crazy, thought it was a joke, thought there was no way this could happen in America,” former Stockton mayor Tubbs explained to reporters. In the years since, direct cash pilot programs have been conceived in Compton, California; Hudson, New York; St. Paul, Minnesota; Jackson, Mississippi; and beyond. And more than 50 members of Congress have called for monthly checks to go to some Americans for the duration of the pandemic. “I’m just so proud that just four years later, how the pendulum has swung,” Tubbs said.
Now, the Stockton program isn’t so much an anomaly, but a prototype. And increasingly, the question won’t be whether programs like these help people, but about how many more people they can help.
Chand understands that better than most. Her now-four-year-old daughter is healthy, and Chand has started working as a doula and enrolled in a four-year degree program at San Francisco State University in addition to her part-time work as a researcher at the Abundant Birth Project. She recently stopped needing food assistance. But getting here wasn’t easy, and her success story is far from the norm. Through direct cash programs, she hopes other people struggling in San Francisco and beyond can build stronger foundations and avoid the stress she went through trying to keep her family healthy.
“I hope the Abundant Birth Project is a spark,” she says, “for this movement toward a basic income supplement.”