Young Baltimore parents feel immediate effects from guaranteed income

Published on: October 12, 2022 6:00 AM EDT|Updated on: October 12, 2022 8:48 AM EDT

Ariana Williams is a participant in Baltimore’s guranteed income pilot program, which pays 200 young parents $1,000 per month in no-strings-attached financial support.

Ever since she was teenager, Jewels Hawkins says she’s been more or less on her own.

Not long after she stopped attending high school, her father lost his home — the beginning of several unstable years for the now 21-year-old mother of two. Since then, Hawkins has moved from one place to the next around Baltimore, often living with friends or relatives. She did a stint in a homeless shelter. She had an apartment for a while, but lost it.

“I’m just grateful to be alive,” she said.

Later this week, Hawkins and her two boys plan to move into a place of their own in East Baltimore — rent she can suddenly afford thanks to $1,000 in monthly, no-strings-attached funds that Baltimore City started sending her at the end of this summer.

The payments, which Hawkins at first assumed were a scam, are part of Baltimore’s new experiment in guaranteed income. Hawkins is one of 200 young Baltimore parents who saw $1,000 deposited into their bank accounts this August. They’ll keep receiving monthly payments for two years.

Now, Hawkins has been able to get all of the food, diapers and supplies she needs for her kids. She’s been able to manage bills. “And I can finally have a place that we call home,” she said.

Data on how the 200 participants in the Baltimore Young Families Success Fund are spending their money isn’t expected until later this year, but leaders of the pilot project say the effects have been immediate. For many participants, the first two payments have also delivered stability, said Robin McKinney, CEO of CASH Campaign of Maryland. They’ve freed recipients to catch up on bills, enroll in new job training courses, and, in at least a handful of cases known to CASH, allowed recipients to secure stable housing.

“A lot of people have been living not even paycheck to paycheck,” said McKinney, whose nonprofit is helping to administer Baltimore’s pilot. “They’ve been living underwater.”

In a city where about one-fifth of residents live in poverty, more than 4,000 people applied to join the guaranteed income program, which targets parents or caretakers between 18 and 24 years old who have annual incomes at or below 300% of the federal poverty line, or $69,090 for a household of three.

Participants were selected in a random lottery, but demographic data released last month suggests the program is reaching some of Baltimore’s most marginalized residents: 26 recipients identified as unhoused; about 92% are African American; about 88% are women; and about 89% said they are single. The median annual household income of recipients is $7,350, about 14% of the citywide level.

‘Space to breathe’

Baltimore, whose cash assistance program is funded with $4.8 million in federal COVID-19 aid, is among several dozen cities across the country that have launched pilot-scale guaranteed income programs in recent years. Specifics differ from place to place, but each program has a common tenet at its core: People are the experts on their own lives, and they know best how to meet their own needs.

A relative of “universal basic income,” guaranteed cash assistance was a little tested idea in the United States until just a few years ago. The country’s first experiment in decades on guaranteed income began in Stockton, California, in 2019. Today a league of dozens of city leaders, including Baltimore Mayor Brandon Scott, have backed expansion of guaranteed income at the federal level through the nonprofit Mayors for a Guaranteed Income, which has sponsored more than 40 pilot ventures by local governments around the country.

“The Baltimore Young Families Success Fund puts money directly in the hands of our residents because they know what their families need to ascend the ladder of opportunity,” Scott said after the city began enlisting participants into the new program this August.

Scott spokesman Jack French said the city’s current program could continue in some form after the two years run out, but the city has no plans to establish permanent guaranteed income.

Amy Castro, co-director for the University of Pennsylvania’s Center for Guaranteed Income Research, said early findings from several guaranteed income programs show that initial payments allow recipients “the space to breathe” and stabilize their financial situations. While moves into new apartments may not be typical in the first few months, Castro said participants in programs like the one in Stockton found immediate relief by catching up on overdue bills and shoring up other household finances.

And over time, the evidence out of Stockton showed the payments had a deeper effect. With barriers around child care, transportation and spare time falling away, participants began to take risks and set goals for themselves that they weren’t able to focus on earlier, Castro said.

For Ariana Williams, a 24-year-old participant in Baltimore’s pilot, the guaranteed income program came as a signal of hope amid “a downward spiral.” In February, Williams lost her temp job as an insurance agent. She was a new mother and in need of a post-pregnancy surgery. The landlord of her old apartment took the property back, forcing Williams and her boyfriend to move apart. Williams, whose parents both died when she was a kid, took her daughter and moved in with her aunt, who was dealing with a string of her own health issues and facing possible foreclosure.

“You know how they say life gets harder before it gets better? It did,” Williams said. “It got worse.”

But once Williams started receiving cash from the city in August, things turned around pretty quickly, she said. She moved out of her aunt’s home and into an apartment she now shares with her 1-year-old daughter, boyfriend and older sister. She started a part-time job. Aside from rent, Williams said much of her new income stream has gone toward things such as food and diapers — the basics.

“I’m kind of a stickler for necessities,” she said. “I like to focus on needs more than wants.”

The experiences of recipients who have both found new housing in the first weeks of the program, like Williams and Hawkins, demonstrate how powerful cash assistance can be, McKinney said. A thousand dollars a month isn’t a lot of money, the CASH Campaign CEO noted, but it’s changing people’s lives.

“It just shows you that the line between sufficient income and insufficient income is not as big as we all think,” she said.

Unanswered questions

Just two months in, evidence around the effects of Baltimore’s guaranteed income for its participants remains thin. But researchers following the pilot are eager to plumb data on everything from spending to housing effects to more “squishy” questions like the effects on peoples’ mental health and time spent with family, said Randall Juras and Hannah Thomas, of Abt Associates, a consultancy analyzing the program.

Longer-term impacts, such as where recipients end up after two years and how their personal goals have changed, will be important to watch as well, the researchers said.

Some indication of the program’s direction might be found in places that have already generated spending reports. Newly-compiled data encompassing thousands of recipients in pilot programs around the country found that 40% of funds nationally have so far gone to retail sales and services, about 29% have gone to food and groceries and only about 4% have gone to travel, leisure and entertainment.

Mary Bogle, a researcher at the Urban Institute, studied the results of Washington, D.C.’s pandemic cash assistance program, in which the city gave residents of the Anacostia neighborhood $5,500, either all at once or in monthly installments. Recipients used their money to fund basic needs, such as food and housing, rather than on superfluous goods as some opponents of guaranteed income have predicted, Bogle and her team found.

After D.C.’s program began, the number of participants who reported not having enough to eat on a daily basis dropped from 34% to 19%. Fifty-four percent of recipients said they spent “all or almost all” or “a lot” of their payments on housing, according to the Urban Institute’s findings. Significantly, participants reported better mental health than other people with similar earnings in D.C. and nationally.

And Bogle went further to say programs like D.C.’s have opened doors not simply for stabilizing the finances of recipients, but for facilitating “economic mobility.” While the bulk of funds from the D.C. program went towards food and shelter, Urban Institute researchers found that participants also saved money for things such as car repairs, utility bills and homeownership.

Even so, there’s a lot to learn from the pilot programs that now dot the country, Castro said. The University of Pennsylvania professor explained the most effective ways to administer cash assistance — how much money and over how much time — aren’t clear yet, and refinement is needed to figure out how to get money to the most marginalized communities.

“The public momentum and public discourse on unconditional cash is moving much faster than the data is,” she said.

Now that Williams has found work and more stable housing, she said she’s interested in turning a longtime knitting hobby into a business, selling hats, scarves and blankets. It’s also allowed her to share some money with her aunt, the woman who raised her after both of her parents died, to stave off the threatened home foreclosure.

After all, Williams said her aunt always had her back, even when she didn’t ask for anything.

“It’s really hard for me to ask for help,” Williams said. “Even if I know, in the end, I really need it.”