A new Sacramento State report finds that giving $500 monthly to low-income families significantly improved their financial and housing stability.
SACRAMENTO, Calif. — Giving low-income families $500 per month for a year — no strings attached — significantly stabilized their lives.
That’s the finding of a new Sacramento State report, looking at a ‘guaranteed income’ pilot program from United Way California Capital Region.
United Way — in partnership with the city of Sacramento — picked a random, diverse group of 80 low-income families from more than 10,000 applicants and gave them $500 per month during fiscal year 2023-24.
That money came from the city’s federal American Rescue Plan Act (ARPA) funds.
The new Sacramento State report compared participants with a control group whose families did not receive funds. It shows funded families experienced measurable gains in financial stability, housing security and food access.
“The one-year evaluation report showed 49% of program participants reported being financially better off by the end of the program, as compared to 16% of the control group,” a United Way news release said. “By the end of the year of funding, food insecurity among program participants decreased from 51% to 37%, and twice as many households could pay cash for an unexpected $400 expense.”
The study also showed many improvements held steady, even six months after funding ended.
“Food security remained stable among participants. Financial security was still significantly stronger than the control group, with 41% of participants still seeing themselves as financially better off six months after funding ended compared to 10% of the control group,” the news release said.
Participants were not required to have their spending tracked. However, United Way California Capital Region President and CEO Dr. Dawnté Early said most of them opted to participate in tracking through a partnership with SAFE Credit Union, which also offered financial literacy resources.
For those whose spending was tracked, United Way followed, “Are you spending it on housing? Are you spending it on food, groceries, those kinds of things? Child care, transportation?” Early said in an interview with ABC10. “And what we saw is exactly what we would have thought: that those dollars were being spent on their basic needs in order to, again, help their household and their family.”
United Way California Capital Region has other ‘guaranteed income’ pilot programs. Early said she hopes these positive results inform policy at the state level.
“It really is an amazing program, when you think about. Just simply $500 a month and how it’s able to change your life and transform your life, even just after 12 months,” Early said. “Is it going to fix everything after decades of probably living in poverty? No. But it is able to help you and your family and your kiddos be able to put more food on the table and have more housing stability as well.”
The report said the median annual income for the group selected to participate was $21,000 at the start of the program.
Universal Basic Income: Sacramento program to give families extra cash | To The Point
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