A new analysis released Wednesday from the research organization Boston Indicators and the advocacy group Children’s Health Watch shows that participants of several guaranteed income pilot programs found short-term financial relief by putting money they received towards bills and necessities.
Experts focused their review on data from a pair of guaranteed income programs that each served about 2,000 households in Cambridge and Chelsea, and one program that served 3,000 low-income individuals in Illinois and Texas.
Luc Schuster, executive director of Boston Indicators, said one major concern that critics of guaranteed income programs had before the pilots debuted was that “people might waste the money on luxury spending or non-essentials,” like alcohol or recreation.
“The research is really clear that people are not using the money for that,” Schuster told GBH News.
Instead, he said participants consistently spent money on necessities such as food, utilities, transportation and childcare.
“All of these programs target low and moderate income families who are really struggling to make ends meet and the evidence is that when they get an infusion of cash, they spend it overwhelmingly for essential, basic needs that their families need day to day.”
The findings come at what Schuster described is “an inflection point for considering next steps” for many guaranteed income pilots that were launched following the height of the COVID-19 pandemic and are now ending. Massachusetts has at least 24 known guaranteed income programs that were catalogued as part of the Boston Indicators and Children’s Health Watch report.
“Our paper was the first local effort to summarize what we’ve learned across all of those [pilots] to support the next round of interventions that might happen in the coming years,” Schuster said.
Advocates celebrated the analysis during a webinar Wednesday.
“Many of us have been wanting this for some time,” said Jessica Ridge, who supervised the launch of multiple guaranteed income programs across Massachusetts.
Ridge, a former staffer for then-Boston City Councilor, now U.S. Rep. Ayanna Pressley, recalled the story of a participant named Lita who paid down debt and eventually used a portion of the $500 she received through Cambridge Rise to go to therapy. She warned that there are benefits that strictly data-driven analyses might miss.
“They don’t capture the value of that for Lita and her kid and I’m not sure that captures the impact of that on the community. I think those things are really hard to measure,” Ridge said.
Schuster noted that while data did not show recipients spending money on luxuries, the data did not show major changes in their economic statuses either.
“There was a lot of hope in early days that these programs might transition people into more stable housing or allow them to leave the workforce, get more training or education, and then shift into a higher paying career,” Schuster said. “Those kinds of transformational effects haven’t been seen in the research.”
Schuster said that might be attributable to most guaranteed income pilots limiting payments to several hundred dollars, and in some cases, $1,000, monthly.
Schuster said there are multiple other Massachusetts programs focused specifically on health outcomes that researchers will keep an eye on moving forward. Earlier in the year, state lawmakers tucked into committee a bill that would establish a guaranteed income program for 1,500 residents. The early committee assignment without subsequent action typically signals the end of the bill’s consideration.
