A Call to Action: Addressing Poverty & Income Inequality
A new learning opportunity to explore the stabilizing effect of a guaranteed income and how cities can engage with pilots and policy work around the country
In this six-session Sprint led by the Mayors for a Guaranteed Income and the Economic Security Project, cities will learn about the research behind and value of a guaranteed income, the national network of mayors engaged with implementing demonstrations and advocating for guaranteed income programs at the state and federal level, and the City of Stockton’s experiences in piloting the first mayor-led guaranteed income initiative under Mayor Michael Tubbs.
Start Date: Thursday, October 8, 2020
Duration: October 8 — November 19, 2020 (Six sessions over a seven week period; no session the week of November 2)
Read on to learn more about Stockton’s approach of using a guaranteed income pilot to address their city’s economic inequality. For cities interested in replicating a similar approach, check out the ‘Sprint Overview’ section below for additional details and logistics.
The United States is one of the wealthiest countries in the world. Prosperity and economic well-being, however, are not broadly shared: Over 40 percent of Americans live in or close to poverty, with Native American, Black, and Hispanic communities making up a disproportionate percentage of those who are economically poor. In 2018, 42 percent of working Americans made $15 per hour or less, below the $16 living wage threshold. Women, particularly women of color, are the most likely to live in poverty and are overrepresented in low-paying occupations.
Even before COVID-19, nearly 40 percent of Americans could not afford a single $400 emergency — and now, as the economic consequences of the pandemic unfold, low-income and Black and brown communities are bearing the brunt of the additional economic hardship. Pre-existing income disparities (for example, on average, white workers make 28 percent more than the Black workers and 35 percent more than Hispanic workers) have been intensified as the pandemic disproportionately affects the most vulnerable residents.
Contributing to the economic instability faced by many families has been the rise in income volatility. A changing labor market has meant that predictable work hours have become increasingly rare and that more and more workers are depending on income from commissions, tips, and hourly work with fluctuating schedules. As many as 89 percent of Americans see their income fluctuate by more than five percent month to month, and 60 percent see changes in spending greater than 30 percent from month to month. Even if a living wage is made, this volatility undermines the financial security that hard working Americans deserve.
In uncertain times, how might cities and local leadership work to provide economic stability and resiliency for their residents and help them build a safety net for the future?
A Solution from Stockton: Providing unconditional cash transfers to stabilize communities
Stockton, California, once the foreclosure capital of America and one of the largest cities in the country to declare bankruptcy, is now ranked the second most fiscally solvent city in the nation and is reinventing itself as a leader in progressive social and economic policy under the leadership of Mayor Michael Tubbs. Yet, many of Stockton’s residents still face significant economic hardship. Stockton’s median household income of $46,033, for example, falls far below the state’s median household income of $61,818.
To address residents’ income instability, the Office of Mayor Michael Tubbs, the Reinvent Stockton Foundation, the Economic Security Project, and the residents of Stockton decided to test the nation’s first mayor-led guaranteed income initiative. A guaranteed income is a monthly cash payment given directly to individuals. It is unconditional, with no strings attached and no employment requirements. The idea is that unconditional cash can help residents meet urgent needs like a new car battery or help to keep the lights on, or with an unanticipated bill that could otherwise trigger a downward spiral.
In February 2019, 125 Stockton residents began receiving a guaranteed income of $500 a month through the Stockton Economic Empowerment Demonstration (SEED). Billed as “a hand-up, rather than a hand-out,” SEED seeks to “empower its recipients financially and prove to supporters and skeptics alike that poverty results from a lack of cash, not character.”
SEED is using data, both past and current, to guide its pilot. Empirical evidence gathered from guaranteed income pilot programs across the United States and in other countries around the world have shown that for residents who had access to this kind of support, educational achievement increased, health outcomes substantially improved, and there was no negative effect on labor market supply. SEED is also actively partnering with university researchers to ensure that the lessons learned from the pilot are accurate, transparent, and community-focused.
Since SEED’s launch, the team has consistently shared findings and stories on a community dashboard, with recipients reporting having spent their guaranteed income on everyday necessities and emergencies including items such as groceries, utility bills, credit card debt, and dental work. Recipients also reported feeling less anxious and able to spend more time with their families — findings that largely mirror the outcomes found in other guaranteed income trials. SEED aims to fill the research gaps about holistic economic and health impacts that guaranteed income has on individuals and how a guaranteed income can combat income volatility in service of a more stable and resilient economic future for residents.
While guaranteed income is not a panacea for economic immobility, racial income inequality, and the many other complex economic and social issues prevalent in cities across America, there is a growing and robust evidence base that it can help increase economic stability and create an economic foundation for those in need.
As part of its City Solutions work, What Works Cities is partnering with Mayors for a Guaranteed Income (MGI) and the Economic Security Project to offer cities an opportunity to learn more about the research behind guaranteed income, its benefits, and to explore the first steps of implementing a guaranteed income program at the local level, as well as how to join other leaders around the country calling for a federal guaranteed income.
Participating cities will join a six-session online learning opportunity with a cohort of peers from other cities to gain:
- A firm understanding of the history, available research, and needed research around guaranteed income;
- The actions necessary to launch a task force or working group to explore a guaranteed income demonstration in their cities;
- The actions necessary to develop a guaranteed income demonstration; and
- Concrete next steps to engage with MGI to collectively advocate for a federal guaranteed income.
In addition to learning sessions facilitated by MGI and the Economic Security Project, cities will have the opportunity to develop connections with cities experiencing similar challenges and hear from practitioners including Mayor Michael Tubbs, City of Stockton staff, and SEED researchers.
The Sprint will include:
- Session 1: Guaranteed Income & Sprint Overview
- Session 2: Developing a Task Force and Working Group
- Session 3: What We Know and Building Research to Fill the Gaps
- Session 4: Building a Guaranteed Income Demonstration
- Session 5: Pilots to Policy, Engaging with Federal Advocacy
- Session 6: Your Mayor as Champion, Joining MGI and Media Engagement
- When: Thursday afternoons at 3:00 PM ET/12:00PM PT — Six sessions over seven weeks, starting October 8, ending November 19. Note: no session the week of November 2.
- Where: Weekly 1 to 1.5 hour webinars and/or cohort discussions delivered via an online learning platform.
Who should participate
While individuals are able to participate in this WWC Sprint, cities are encouraged to bring together a team of key stakeholders in order to maximize the opportunity and establish a foundation for long-term success.
Participating members of the team could include, but are not limited to, leaders and staff from:
- Mayor’s Office
- City Council
- Economic Development Department
- Health and Human Services
- Department of Neighborhoods/Community Engagement
- Closely affiliated non-profit organization partner
- Community foundations and other funders
- City’s population must be 30,000 or above
- If your city has not previously done so, you must commit to submitting a completed What Works Cities Assessment by December 31, 2020 (takes approximately 30 minutes to complete).
While the Sprint opportunity is open to all eligible cities, cities that have identified addressing economic development issues and/or equity as a top priority are especially encouraged to register.
Participating cities are expected to participate fully in all six sessions, complete all assignments and readings, and engage sincerely in advancing on the goals of the Sprint.
Weekly sessions will be led by Mayors for a Guaranteed Income and the Economic Security Project. Speakers will include experts and practitioners with deep experience in this issue, including Mayor Michael Tubbs of Stockton, California; Madeline Neighly, Director of Guaranteed Income, Economic Security Project; and Stockton Economic Empowerment Demonstration (SEED) researchers.
- Informational session webinar: Tuesday, September 22, 2020 (Watch the recording)
- Registration deadline: Monday, October 5, 2020
- Sprint begins: Thursday, October 8, 2020
- WWC Assessment must be completed by: December 31, 2020
What Works Cities, a Bloomberg Philanthropies initiative launched in 2015, helps local governments across the country drive progress in their cities through the effective use of data and evidence to tackle pressing challenges that affect their communities.
Through its City Solutions work, What Works Cities partners with cities, community organizations, and other local and national organizations to accelerate the adoption of programs, policies, and practices that have previously demonstrated success in helping cities solve their most difficult challenges.