Guaranteed Income Works Again

Providing poor people with a guaranteed income without constraints works again. Stockton, California provided $500 to a small group of 125 people for two years. As in previous studies the results contradicted the stereotype that the money would be wasted. There too, people used the money to get out of debt, pay bills, and get better jobs.

“Within a year, the proportion of cash recipients who had full-time jobs jumped from 28 percent to 40 percent. The control group saw only a 5 percent jump over the same period.” – Vox

The basic mechanism is simple: It takes money to make money. Being poor is defined by not having enough money. One way to reduce poverty is to give poor people money – and let them decide how best to use it. In a need for efficiency, organizations typically enforce general rules that don’t necessarily fit specific lives. It is common that such initiatives save communities more money than the cost of the implementation because as people get out of poverty they can begin paying taxes, energizing the economy, and spending more time being productive.