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  • The San Juan Daily Star

Cities adopting cash payments to curb poverty


Alondra Barajas, who is trying to save enough for a security deposit for an apartment, in Los Angeles, Aug. 17, 2022. Since she started receiving monthly payments earlier this year — while caring for her newborn, searching for a job, and looking for a new place to stay — her outlook has seemed brighter.

By Kurtis Lee


Early in the pandemic, Alondra Barajas had a temporary job for the Census Bureau, doing phone work from the two-bedroom apartment she shared with her mother and four younger siblings. When that job ended in late 2020, she struggled to find employment.


But Barajas learned from an ad on Instagram that she might qualify for an unusual form of assistance: monthly payments of $1,000 for a year.


Since she started receiving the funds this year — while caring for her newborn, searching for a job and looking for a new place to stay — her outlook has seemed brighter.


“It’s helped me from hitting rock bottom,” she said.


The payments are part of a pilot program from the city of Los Angeles, one of the nation’s largest experiments with a guaranteed income. The idea is that the best way to close the wealth gap and give people the opportunity to build a more stable life is to provide unrestricted cash payments to some of the most vulnerable Americans.


The concept, sometimes referred to as universal basic income, has had advocates for decades. Andrew Yang made it a centerpiece of his 2020 Democratic presidential campaign. At the same time, detractors have long argued that the approach incentivizes people not to work. Still, it is gaining traction, city by city.


More than 48 guaranteed income programs have been started in cities nationwide since 2020, according to Mayors for a Guaranteed Income, a network of leaders supporting such efforts at the local, state and federal levels. Some efforts are publicly funded, and others have nongovernmental support. Jack Dorsey, former CEO of Twitter, donated $18 million to help the initiative.


California has become the epicenter of the movement. The Los Angeles program, funded primarily by the city, benefits 3,200 people who have at least one child, as well as an annual income below the federal poverty level. Several cities have moved ahead with efforts using private money: Oakland pledged to give 600 low-income families $500 for 18 months, and in San Diego, some families with young children will get $500 a month for two years.


Last year, the state set aside $35 million over five years for cities to carry out pilot programs, which can use different criteria, including income level, people leaving the foster care system and residence in low-income neighborhoods. An application process for municipalities to tap into those funds is underway.


Beyond California, 300 Atlanta residents who live below the federal poverty level are receiving $500 a month for a year, and in Minneapolis, 200 residents from designated low-income neighborhoods will receive $500 a month for two years. This fall, 260 people living in motels or emergency shelters in Denver will receive a $6,500 payment and will get an additional $500 a month for 11 months, with payments planned for 560 more people.


Michael Tubbs, who as the mayor of Stockton, California, put in place one of the country’s first guaranteed income programs in 2019, notes that these payments are not meant to be a sole means of income but aim to provide a buffer for people to break the cycle of poverty.


Tubbs sees the programs as crucial tools in achieving racial justice for Black people and Latinos.


“The ways in which racism and capitalism have intersected to steal wealth from some communities,” he said, “creates the disparities we see today.”


Damon Jones, an economics professor at the University of Chicago, who has studied such programs, noted that unrestricted cash — including stimulus payments — was used broadly by the federal government to stem the economic devastation of COVID-19.


“Policymakers were surprisingly open to this idea following the onset of the pandemic,” Jones said. Now the emergency aid programs have largely lapsed, ending what for some was a lifeline.


Opponents argue that guaranteed income programs are too expensive and are counterproductive.


Oren Cass, executive director of American Compass, a conservative-leaning think tank, said the case against guaranteed income was not that people “receiving random windfalls can’t benefit from them — in at least some cases, they can and do.”


“It’s that a permanent and societywide system to provide for everyone would destroy fundamental elements of the social contract and create the wrong incentives for people as they make choices about their life’s course,” he said. “You can’t pilot that.”


Abigail Marquez, a general manager overseeing the Los Angeles pilot program, said the goal of her city’s effort was to promote changes to the ways federal public benefit programs were designed.


“Many, if not all, public benefit program regulations contradict each other, are difficult to navigate and are not focused on creating pathways to greater economic opportunity,” Marquez said. (Some states, including California, have built-in exemptions to ensure that accepting funding from the pilot programs does not put recipients at risk of losing certain state and federal assistance.)


The Los Angeles program received $38 million from the city. A small portion of the money comes from private funds.


According to city data, one-third of adults in Los Angeles are unable to support their families on income from full-time work alone.


“When you provide resources to families that are struggling, it can give them the breathing room to realize goals that many of us are fortunate enough to take for granted,” Mayor Eric Garcetti said when the program began.


That breathing room came at an opportune time for Barajas. After graduating from high school in 2017, she pushed aside dreams of college and began working a string of retail gigs — Claire’s, Old Navy, Walmart. She set aside $300 from her paycheck each month to help cover her family’s rent.


“I had to work,” she said. “We had no foundation, no money in our pockets.”


Last year, Barajas, 22, received funds from an extension of the child tax credit. She used some of the money for essentials such as clothes and food.


On a recent afternoon in Chatsworth, a Los Angeles neighborhood, Barajas reflected on how the money from the guaranteed income program was helping her stay afloat. She moved out of her mother’s apartment in April, after an argument. Since then, she and her daughter, now 15 months old, have slept on friends’ couches and sometimes stayed at pay-by-the-week motels.


For now, they are living at a 90-day shelter for women and children. Barajas hopes to attend community college this fall, but is focused first on finding a job. Many mornings, she scrolls her iPhone looking at postings before her daughter wakes up.


Most of the money from the guaranteed income payments goes toward food, diapers and clothing, but she’s trying to save several hundred dollars, enough for a security deposit for an apartment she hopes to move into with a friend.


“I’m one emergency away from having to spend money and then live on the streets and become homeless,” she said. “A lot of people are just hanging on with the smallest amount of wiggle room financially.”

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