By DEBORAH E. LANS
GHENT–Many county residents live in profoundly challenging circumstances: their incomes have not kept up with expenses; they pay far more for housing than federal guidelines recommend; child care (if accessible at all) costs dearly; the price of food and other basics continues to rise. Of necessity, many work multiple jobs, and needs go unmet or deferred.
Guaranteed income programs are one approach to helping those most affected, and the Berkshire Taconic Community Foundation (BTCF), in partnership with Greater Hudson Promise Neighborhood (GHPN), has just announced such a program for residents of all 21 of the county’s towns.
Guaranteed income (also sometimes called universal basic income) programs provide participants with a cash amount on a regular schedule, usually monthly and, in the U.S. typically $500 or $1,000, over a period of years, unconditionally. The recipients, once they meet any basic criteria for participation, do not need to prove anything about their finances and are free to use the funds however they see fit.
GI programs using varying parameters have been run in some 130 countries and in more than 150 U.S. locations, though mainly in urban settings (an Ulster County program was the first, and one of the few, tested in a rural environment). The programs have been intensely studied by academics and economists, and the results are largely consistent. For participants in the programs, spending increases, with the bulk of the extra spending going to basic needs such as rent, transportation and food. Labor force participation does not decrease, and in some instances increases, with some studies finding that participants experienced a greater understanding “of the intrinsic value of work.” Studies also report that often participants upgraded their employment because they could afford to obtain job training and conduct more careful job searches. In addition, recipients use the monies to decrease debt, begin to save and, interestingly, to give to others.
Not surprisingly, the effects of financial stress such as anxiety and depression diminish. Families are better able to meet an unexpected expense, such as a car repair, than before. Importantly, in some studies, participants report that they have more time to spend with their children, who in turn experience improved educational outcomes as seen in both attendance and grades.
Skeptics of supportive programs often assert that “handouts” will promote “laziness” and “bad” habits. Virtually every study of GI programs has found otherwise. Recipients work as much as or more than before, though some shift to self-employment. Drinking declines. Long-term saving increases. Where participants are not working, they are often pursuing educational opportunities not previously possible.
Interestingly, several studies have found a particularly strong, positive effect on single mother recipients, who (among other things) substantially increased their hours of work. While the studies do not report the reasons, given the cost of child care it is likely because the availability of additional funds enabled access to more or more reliable care.
Finally, most studies show that smaller, periodic payments are more effective than “lumpier” large ones, such as are effectively available by virtue of child tax credits.
The BTCF GI pilot program is at once carefully-designed and simple. Two families in each of the county’s 21 municipal units will be selected by lottery to participate. The families must consist of a single caregiving adult and at least one child under age six. The family income must be no more than 80% of the average median income (AMI) in the county. For a family of one adult and one child, for example, AMI is $72,150.
The participants will receive $500 per month for two years. BTCF has raised much of the funds already to support the pilot program, including through a recent grant of $100,000 from the Hudson River Bank and Trust Foundation.
GHPN helped to design and will administer the program, as it has administered the similar program begun in 2022 by the Spark of Hudson for Hudson residents (HudsonUP). GHPN will recruit applicants, run the lottery, on board participants, and make the monthly distributions. In addition, as Joan Hunt, GHPN’s executive director explains, her group will be able to offer participants supportive services that GHPN provides, such as an early childhood literacy program and financial and credit-building workshops. The most notable differences between the BTCF program and HudsonUP are the former’s singular focus on single caregivers, be they mothers, fathers, grandparents or others, and, of course, its reach to the entire county.
Tammy Bell is a participant in the HudsonUP program and a grandmother who stepped in to raise her daughter’s four children, then aged 11, 10, 9 and 2, when her daughter passed away unexpectedly. She describes the monthly $500 stipend, though seemingly small, as “meaningful and a blessing.” It has enabled her to provide not only basics for her grandchildren, but also the grief counseling that has enabled them to “do great.”
What Ms. Bell has found most amazing about the program is its unconditionality. There are no strings attached to the funds, as is often the case with governmental programs which limit the uses to which monies may be put. “Every family makes it’s own decisions about what it needs, which makes sense because every household has different needs.” There is also no complex (and often demeaning) application process nor repetitive check-ins, which also reduces administrative costs.
A key finding of many of the studies of GI programs is that they increase participants’ sense of agency: they are empowered to determine their own financial needs and futures without, as a study of HudsonUP’s program puts it, “the interference of paternalistic policy and cumbersome bureaucracy.”
Indeed, the Center for Guaranteed Income Research at the University of Pennsylvania, which has studied many of the major GI programs, reported about the Ulster County program that “many guaranteed income participants experienced an increase in both hope and agency, even within the broader context of limited opportunities and few pathways for economic mobility…meaning that they felt a sense of control over their ability to achieve their goal with the GI in hand.” Participants could plan their futures, seek out specialized training or attend school, and search for a job more aligned with their interests. “Such experiences contributed to a stronger sense of dignity and self-worth…”
Huge disparities in income are a well-known feature of today’s America. As a column in Scientific American about GI programs put it, “income differences are only partially determined by individuals’ efforts; much comes down to luck, such as the family one is born into, unfortunate accidents or unrecognized disabilities. Guaranteed minimum income is one way to even out the luck, benefiting the unfortunate with some help from the fortunate.”
Indeed, that GI programs are funded by the community, not government, is itself powerful. Ms. Bell said she is “super-grateful for the people” funding GI programs and loves that they are giving back as a way of community support. The fact that in one study GI recipients’ fourth largest area of spending was, in turn, in helping others is a testament to the community-building dimension of such programs.
BTCF hopes to expand its program over time, offering more county families a “hand up” in meeting their circumstances.
Disclosure: the author was recently appointed to the Board of Directors of BTCF, after this program was developed.
To contact reporter Deborah Lans, email deborahlans@icloud.com