Taxpayer-funded “guaranteed income” programs that provide families in need up to $36,000 with no strings attached are being rolled out across the country, a analysis shows.
The programs, worth more than $125 million in total, have grown in popularity since the pandemic as progressive leaders push for cash grants to support Americans below the poverty line.
But the radical projects have been criticized after it was revealed that a mother of three in Washington DC spent more than half of a $10,800 lump sum on a luxury vacation in Miami, along with a new wardrobe for her children and a “glossy effect”. for herself.
Canethia Miller, 27, spent $6,000 on the vacation for herself, her partner and their three children, buying 15 new outfits for the kids and spending $180 on a haircut. She received the money through the first project in the country to offer money as a lump sum instead of monthly payments.
Similar programs in cities from Los Angeles to New York offer payments of up to $1,000 a month for three years with no strings attached to how the money is used.
A map of some of the country's largest guaranteed income projects shows participants will receive up to $1,000 a month for three years
Canethia Miller, 27, spent more than half of a $10,800 lump sum on a luxury vacation in Miami, along with a new wardrobe for her children and a “sparkly look” for herself
Erika James, 34, who also participated in the DC program, opted for monthly payments of $900 and said she put the money into a savings account for her oldest child, De'Vire
Eligibility criteria for many programs are based on the federal poverty level, a sliding scale based on income. For a single person, the poverty line is $15,060 or less, while for a family of four it is $31,200 or less.
Advocates and program leaders claim that guaranteed income projects are proven to lift people out of poverty by helping them achieve financial stability and goals, including moving out of government-subsidized housing. Recipients said the money changed their lives and even lifted some out of homelessness.
But critics say the systems “destroy fundamental elements of the social contract and create perverse incentives for people.” They claim that cases like Miller's prove that providing money without conditions on how the money is used is not a solution to inequality.
Ongoing projects will generate more than $125 million for nearly 10,000 Americans across the country in more than 30 programs lasting up to three years, according to data published on the Guaranteed Income Pilots Dashboard.
Separate data from Stanford University's Basic Income Lab found that at least 153 projects have been implemented in America, including 68 that are “active.” However, the data does not include programs including the one in D.C., which cost about $1.5 million.
Most guaranteed income systems are funded with taxpayer money.
The largest and most expensive guaranteed income program is the Big Leap program in Los Angeles, which provides $1,000 a month to 3,200 participants for a year.
The $36 million project was announced in October 2021 and is open to adult city residents who have at least one child or are pregnant and have income below the federal poverty level.
Like most other projects across the country, Big Leap is described as a “pilot project” aimed at studying the impact of a guaranteed, no-strings-attached income. Qualified applicants will be randomly selected.
Los Angeles is also home to the second largest program, which pays $1,000 per month for three years to 1,000 eligible L.A. County residents. This is financed by around $36 million in taxpayer money.
The third largest, in New York City, provides between $500 and $1,000 per month to 600 participants for three years.
The Washington DC project is led by Martha's Table, which is distributing the charity as part of its Strong Families, Strong Futures initiative. D.C. Mayor Muriel Bowser's office recently committed an additional $1 million to run the program for a second year.
The D.C. program was funded by Democratic Mayor Muriel Bowser and is the only one in the U.S. to offer cash as a lump sum
Miller was one of 132 low-income new or pregnant mothers who could choose between 12 monthly payments of $900 or a one-time payment of $10,800.
She decided on the lump sum. After the year-long program, she said, “I wanted to mess up. I wanted to have fun.”
The five-day vacation in Miami included a boat tour, which Miller said was an opportunity to show her children the city's multimillion-dollar waterfront properties. The family also visited museums, took a wildlife tour of the wetlands, and ate out together during the trip.
'[My kids] “I got to experience something I never would have been able to do without this money,” she told The Washington Post, who spoke to several participants in the program.
Miller said she spent $4,000 on bills and a used car and opened a bank account where she plans to keep at least $50.
The program, like others across the country, also offered financial literacy courses, although these were not mandatory.
Miller acknowledged that many communities in her area “don’t understand the financial benefit of a loan that saves for children; That's why we're broke, that's why we have nothing to pass on, and that's why we don't have a house to pass on.
Other participating mothers also spoke about the importance of financial literacy.
Stacie Adams, a mother of four who also received the lump sum payment, said: “[The courses weren’t] mandatory, but maybe it should have been. “A lot of people haven't seen the $10,000 yet and might have spent it straight away – even I struggle with finances too.”
LA County's BREATHE program — which provides $1,000 a month for three years — shared promotional materials from participants talking about the positive impact it has had on their lives.
Darien, a single mother of five from Long Beach, teared up as she said, “In the next few years, I’m going to make it. “I can save and hopefully do things with my kids that I’ve always wanted to do.”
“I don’t get much help,” added Darien, whose last name was not provided. She said she was separated from her ex-husband and had been single for about three years.
“When I was selected, you don't know how happy I was.” I was shocked. And then, [my kids asked] 'Why are you crying?' I thought, from this day on our lives will change. It will be different, you know.
“I told them that God has heard our prayers and we will get the help we need.”
Another mother, Jacqueline, also from Long Beach, said she was living in her car with her 10-year-old daughter when she was accepted into the BREATHE program.
“We lived or slept in my car. “There was no hope for us and I was just trying to survive,” she said.
Jacqueline, a participant in LA County's BREATHE program — which provides $1,000 a month for three years — said the program lifted her and her daughter out of homelessness
Darien, a single mother of five from Long Beach who also participates in the BREATHE program, cried as she said, “I can save and hopefully do things with my kids that I've always wanted to do.”
“When I got that call, it was literally a month after I became homeless and we were already on the streets. It gave me hope and it just gave me something to look forward to.”
Jacqueline said the money was an “opportunity” and she plans to go back to school and then find work in the medical field and ensure her daughter stays at her current school.
“This program has given me the opportunity to live again.” “Be a mother and gradually return to normality.”
Many of the programs have shared the encouraging stories of families whose lives have been transformed by the projects. Programs often specifically target mothers and young families, while others are open to all adults living below the poverty line.
But critics say cash spending is a blunt instrument that doesn't address the underlying causes of poverty.
Oren Cass, executive director of the conservative think tank American Compass, said: “A permanent, inclusive system that provides for everyone would destroy fundamental elements of the social contract and create perverse incentives for people as they make life course decisions.”'
Joel Griffith, an economist at the Heritage Foundation, added: “Often these handouts actually trap people in a vicious cycle of poverty.” “It doesn't help people build long-term wealth and achieve long-term economic prosperity.”