California City Gave People $500 A Month for 2 Years — Free Money Made Them Work More, Not Less

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Money can’t buy happiness, but it can buy groceries, keep the lights on, and cover the gas needed to get to a job interview. As artificial intelligence keeps fueling debate over whether universal basic income could someday become part of everyday life, one California city already put the idea to the test—and the results surprised plenty of skeptics.

In 2019, Stockton became the first U.S. city to launch a mayor-led guaranteed income program. Under then-Mayor Michael Tubbs, the Stockton Economic Empowerment Demonstration, or SEED, provided 125 randomly selected residents living in neighborhoods at or below the city’s median household income with $500 a month for two years. 

The program was funded entirely through private philanthropy, including a major grant from the Economic Security Project, a preliminary analysis by SEED released in 2021 showed.

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The Monthly Checks Didn’t Keep People Out of Work

One of the biggest criticisms of guaranteed income has long been that people might stop working if they received cash with no strings attached.

Stockton’s first-year results told a different story. Full-time employment among participants climbed from 28% to 40%, while the control group saw a smaller increase from 32% to 37%. Researchers said the additional income gave recipients room to pay for childcare, transportation, interview clothes, and other costs that made it easier to pursue better jobs, the report found.

The Money Went Toward the Basics

The spending data also pushed back against another common assumption.

Nearly 37% of the money went toward food, 22% covered merchandise and household goods, 11% paid utilities, and 10% went toward auto expenses. Less than 1% was spent on alcohol or tobacco.

The extra cash also helped smooth out the financial ups and downs that can make it difficult to budget. The share of participants who said they could cover an unexpected expense with cash jumped from 25% to 52%. Recipients also reported lower levels of anxiety and depression, along with improvements in emotional well-being, energy, and overall health, according to the report.

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The Benefits Continued After the First Year

The early findings weren’t the end of the story.

A peer-reviewed analysis published in the Journal of Urban Health followed participants through the full two-year program, including the COVID-19 pandemic. Researchers found recipients continued to experience lower income volatility, reduced mental distress, stronger physical functioning, and greater confidence in making important life decisions.

Participants were better positioned to weather pandemic-related financial shocks, explore new employment opportunities, prioritize caregiving, and avoid low-quality jobs that carried a higher risk of COVID-19 exposure, according to the study. 

Interviews with recipients revealed what those numbers looked like in everyday life. Participants described spending less time worrying about overdue bills and more time focusing on their families, health, and future. One participant said that before joining SEED, paying bills often meant not knowing how she was going to eat. Receiving the monthly payments, she said, finally gave her room to breathe, the study found.

Guaranteed Income May Still Be a Debate

SEED was never intended to become a permanent citywide program, but it became one of the country’s clearest early tests of guaranteed income. Rather than discouraging work, the pilot suggested that a modest monthly payment gave many recipients enough financial stability to pursue better opportunities while improving their overall well-being.

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Whether universal basic income ever becomes a broader reality remains an open question. For now, Americans looking to strengthen their finances generally have to create additional income on their own.

Real estate has long been one way people build wealth, but purchasing an investment property often requires significant capital and comes with the responsibilities of being a landlord. 

Arrived offers another option by letting investors purchase fractional shares of professionally managed rental homes starting at $100. The platform handles the day-to-day work—including finding tenants, coordinating maintenance, managing repairs, collecting rent, and overseeing property operations—allowing investors to gain exposure to residential real estate without buying an entire home themselves. 

Investors can build a diversified portfolio across multiple properties and potentially earn monthly dividend income from rental payments while also benefiting if the homes appreciate in value over time.

Stockton’s experiment showed what happened when guaranteed income arrived in one community. Until programs like that become more than isolated pilot projects, many Americans will continue searching for other ways to build the kind of financial stability that a monthly check was designed to provide.

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