PATERSON, NJ GUARANTEED INCOME PILOT LEADS TO FINANCIAL STABILITY, INCREASED SAVINGS, AND REDUCED STRESS

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Feb 26, 2024, 11:05 ET

Residents see tangible benefits with $400 monthly guaranteed income

PATERSON, N.J., Feb. 26, 2024 /PRNewswire/ -- Today, Mayors for Guaranteed Income and the Office of Mayor Andre Sayegh welcomed the release of independent data on the Paterson Guaranteed Income Program, showcasing significant improvements in financial stability, increased savings, and reduced stress for participants.

The pilot, administered by the City of Paterson, provided a monthly payment of $400 to 110 city residents from June 2021 to June 2022. To qualify, recipients had to be 18 years of age and older, with an annual income below $30,000 for a single person or below $88,000 for a family. Researchers from the University of Pennsylvania collaborated with Paterson to set up a control group and analyze data from the pilot, which has been released today.

Key findings include:

Pilot participants increased their financial stability. While the control group's ability to cover a $400 emergency sharply declined, guaranteed income recipients not only maintained their ability, over 15% saved more than $500 by the 12-month mark.
There were shifts in employment patterns within the treatment group, with a rise in gig work and self-employment. Recipients increased their income significantly, from an average of $16,604 at the start to $24,810 six months after the pilot ended, compared to the control group's $19,078.
Participants found a balance between paid work and caregiving responsibilities, showcasing the program's support in fostering work-life balance.
The cost burden of housing was reduced for the treatment group, and their home quality perceptions improved. The program empowered individuals to make positive changes in their living spaces, from small improvements to significant investments.
The study also showed mental health improvements, with recipients experiencing a significant decrease in distress levels and chaos that continued six months after the program ended.
Beyond individual impact, the program strengthened social ties within the community. Participants engaged in community work, shared resources, and considered the program a valuable asset in fostering a sense of belonging.

"The guaranteed income program is not only about putting money in people's pockets, it is also about restoring dignity," said Paterson Mayor Andre Sayegh. "This pilot demonstrated the power of relatively small, no strings attached payments. Our goal is to seek more private and federal dollars to support a possible expansion of the program."

Dante, a Paterson guaranteed income recipient identified in the report, said, "I have never been able to build credit at all. But now since I have the sort of steady income and I know it's going to be coming in, I took some of the money out. I put it in a bank account, and I opened up one of those credit cards that they use like with your own money. And I've been able to, you know, finally have credit. And it's going well. I have—you know, my credit is like at 712 I think now...The credit card, it was a risk that I never took."

The Paterson Guaranteed Income program demonstrated its potential to bring about transformative change in the lives of participants, addressing financial instability, mental health challenges, and fostering community connections. As the report concludes, the program stands as a beacon of hope and a model for innovative approaches to addressing socio-economic challenges. Overall, guaranteed income seemed to temporarily free participants from time scarcity, allowing them to make deliberate choices around parenting, workforce participation, and time for self and family.

Building off early success, Mayor Andre Sayegh expanded the Guaranteed Income Pilot Program in October 2023. An additional 200 recipients were selected to receive $400 per month for 12 months. The expansion was funded entirely by American Rescue Plan dollars.

"Just last week, Mayors for a Guaranteed Income released polling showing that a healthy majority of voters -- nearly two-thirds -- support guaranteed income because they've seen it work in communities across the country. The results in Paterson, NJ are yet another proof point that guaranteed income works, and makes families stronger and more resilient," said Michael D. Tubbs, founder of Mayors for a Guaranteed Income. "It's time to move from pilots to permanent policy."

Paterson's pilot is affiliated with Mayors for a Guaranteed Income, a coalition of 150 mayors and growing. The research findings from Paterson build upon similar results from the mayor-led guaranteed income programs in Stockton, CA, and St. Paul, Minnesota, which provided families with $500 per month for two years. Researchers found statistically significant gains in employment, financial stability, mental health, and overall well-being.

Read the full report on the Paterson Guaranteed Income program her e.

Founded in June of 2020 by former Stockton Mayor Michael Tubbs, Mayors for a Guaranteed Income is a coalition of nearly 150 mayors committed to advancing a federal guaranteed income – direct, recurring cash payments to middle and low-income people. Expanding to include city and county legislators in 2023 with Counties for a Guaranteed Income, the network acts as a research and resource hub for municipal pilots around the country–nearly 60 and counting. A new documentary film, It's Basic, which premiered at the Tribeca Film Festival in June 2023, follows recipients and illuminates the life-changing impact of guaranteed income programs on families' economic security and opportunity.

SOURCE Mayors for a Guaranteed Income