As the pandemic has exacerbated the racial wealth gap and exposed the economic vulnerabilities that millions of Americans face, New Jersey’s most populous city has launched a pilot program to provide guaranteed income to some residents.
Experts say that success in Newark, New Jersey, a neighboring city to New York City, could set a precedent for other communities across the country to follow suit as the country tries to recover equitably from COVID-19’s economic devastation.
Newark Mayor Ras Baraka, a Democrat, stated earlier this week that “we must emerge from the COVID-19 pandemic with new purpose, new vision, and new ideas to reshape our town and actually improve the quality of life of our inhabitants.” “We have an immediate opportunity to empower and strengthen hundreds of lives while also demonstrating how to do so to the rest of the country.”
The Newark Movement for Economic Equity, which Baraka launched on Monday, is a two-year research project that will provide citizens with unconditional cash payments. The trial program will begin with only 30 residents, but by the fall, it will have grown to 400. Participants must be at least 18 years old and have an income of less than 200 percent of the federal poverty line to be eligible.
Participants will get $6,000 per year to begin with, with half receiving payments bi-weekly and the other half receiving payouts twice a year.
To date, $2.2 million in private money from local philanthropic organizations and beyond have been raised to support the pilot program, and the mayor’s office indicated they are still looking for donors.
The group has stated on its website that if it is successful, it expects to be funded through state or federal funds.
According to 2019 Census data, the median household income in Newark was $35,199, with more than 27% of the population living in poverty. According to census data, more than half of the residents identify as Black.
The research study will be led by the Center for Guaranteed Income Research (CGIR) at the University of Pennsylvania School of Social Policy and Practice, and the program was launched in collaboration with Mayors for a Guaranteed Income, a national program spearheading guaranteed income pilot programs across the United States.
Stacia West, the director and co-founder of the Center for Guaranteed Income Research and a professor at the University of Tennessee College of Social Work, told ABC News, “Guaranteed income is essentially just an income floor, an agreement that we decide folks should not fall beneath.”
She said they began their investigation of guaranteed income in 2017 in a program called the Stockton Economic Empowerment Demonstration, which eventually opened in Stockton, California. They have over 20 pilot initiatives for guaranteed income in cities across the country right now.
“The finest ones are fully community-based,” she continued, “and I believe that’s what you see here in Newark.” “The mayor’s staff worked with local community-based organizations to identify a group of people who they felt were truly hurting economically, both before and after the epidemic, and those people happen to be people who are homeless.”
According to a statement from the mayor’s office, the pilot program will focus on citizens who have been homeless, incarcerated, undocumented, or have aged out of the foster care system.
“Folks said, ‘You all are crazy, you can’t just give people $500 a month,'” West recounted in 2017. “There are a lot of ingrained beliefs, which are essentially steeped in anti-Blackness, that say individuals would misuse the money in some way.”
The Center for Guaranteed Income Research, on the other hand, has seen “a fairly dramatic return on investment” in guaranteed income, according to West.
“We witnessed a greater number of people going from unemployment or underemployment to full employment,” she said. “We looked at patients who were matching the clinical criteria for sadness and anxiety and then suddenly felt substantially better and no longer met those clinical criteria.”
When the Stockton program began in February 2019, they discovered that 28% of the grantees were employed full-time. However, one year later, 40% of those who received the guaranteed income were working full-time.
Over the same one-year period, the control group in the same trial had only a 5% gain in full-time employment, going from 32 percent to 37 percent.
Their preliminary findings come as the country debates whether increased government assistance in the form of unemployment benefits is upsetting the job market by causing fewer individuals to work.
West hopes that the Newark effort, which is one of the larger of the pilot initiatives, will serve as a model for other communities to follow.
“The goal is to prove a policy concept, to develop good science-based policy that improves health, economics, and social justice,” she explained. “So why wouldn’t you scale up the policy if we see that individuals are doing better in terms of those domains of health, education, economics, and how they’re parenting their children — not just in Newark but in the other 26 pilots that we’re running?”