Stockton, CA SEED Initiative

Exploring Guaranteed Income as a Strategy to Address Income Inequality
County Health Rankings & Roadmaps Storymapping Team | June 23, 2020

“There is nothing new about poverty. What is new, however, is that we have the resources to get rid of it.” - Dr. Martin Luther King, Jr., 'Where Do We Go From Here: Chaos or Community?' (1967)

Income and wealth impact health even more during the pandemic

During the COVID-19 pandemic, it is especially important to understand the connection between income, wealth, and health.

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Child thank you drawing of rainbow.
Photo by Stephanie Martin on Unsplash

Before the pandemic, unemployment rates were low due to the availability of low-wage, unstable jobs. The median pay for a low-wage job was $18,000 per year, or $10.22 per hour. Fifty-three million Americans between the ages of 18-64, or 44 percent of the workforce, worked in low-wage jobs, often living paycheck to paycheck.

Since the beginning of the pandemic, many people working 'non-essential' jobs were laid off or experienced reduction in pay. People in lower-wage jobs were most at risk of becoming unemployed. Two out of every five households that made less than $40,000 per year lost a job in March 2020. All in all, more than 41 million Americans filed for unemployment insurance.

Many ‘essential’ workers are in low-paying, service-sector jobs. These frontline jobs employ high percentages of people of color.

These workers were faced with a nearly impossible choice when the pandemic hit: they could keep going to work and be exposed to a deadly virus while attempting to pay their bills, or they could quit their jobs and face even more dire levels of economic uncertainty. In most situations, workers who quit their jobs were not eligible for unemployment insurance.

This situation highlighted an important and pre-existing problem – income impacts health in important ways, and not everyone in our communities has the same economic opportunities.

Welcome to Stockton, CA

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Map of California pointing to Stockton
Stockton, CA

Stockton is home to the first mayor-led guaranteed income program in the country.

Mayor Michael Tubbs is both Stockton's first African-American mayor, and, at 29 years old, the youngest in its history. A native Stocktonian, Tubbs’ experiences growing up in a community with high crime rates and reading the works of Dr. Martin Luther King, Jr. while at Stanford University, eventually inspired him to return to his hometown and advocate for change:

"'While I was in college I remember reading ‘Where Do We Go from Here: Chaos or Community?’ and Dr. King was calling for a guaranteed income saying that in the richest nation in the world, the bottom shouldn't fall out for other people,' Tubbs said," in an interview with ABC News 10, San Diego, CA.

How guaranteed income works in Stockton

In 2019, Stockton began the Stockton Economic Empowerment Demonstration Program (SEED), an experiment in guaranteed income.

The program was designed with community input and provides $500 each month for 24 months to 125 residents. Program recipients can spend the payment on whatever they need, without conditions.

"SEED seeks to empower its recipients financially, and to prove to supporters and skeptics alike that poverty results from a lack of cash, not character." - SEED, www.stocktondemonstration.org
What Would You Do With $500 A Month? Stockton Pilots Universal Basic Income Program | NBC Nightly News

Why guaranteed income?

"We knew that this poverty is at the root of other problems we face... We wanted a bold solution that got to the very root of the cause, which is a lack of cash." - Sukhi Samra, SEED Director, 'Exploring Guaranteed Income as a Strategy to Address Income Inequality'
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Inforgraphic showing economic conditions in Stockton, CA
SEED Data Dashboard, Stockton, CA, data 

Guaranteed income can improve health equity.

According to UNESCO Inclusive Policy Lab, “UBI (Universal Basic Income) has potentially profound ramifications for inequality. Poverty is eliminated, the labor contract becomes more nearly voluntary, and the power relations between workers and employers become less unequal since workers have the option of exit. The possibility of people forming cooperative associations to produce goods and services to serve human need outside the market increases since such activity no longer needs to provide the basic standard of living for participants.”

Therefore, a UBI – or a guaranteed income – provides a stable income floor that leaves room for recipients to address human needs like acquiring adequate and healthy food and access to safe housing, thus improving their overall well-being and increasing health equity.

Income inequality in Stockton.

Income inequality is a barrier to health equity and is a problem in communities across the country. The economic conditions of where you live determine which schools you can access, the stores where you can buy food, and the community resources available to you. When income differs by place, so does opportunity. In the map below, you can see that within Stockton income varies dramatically by neighborhood.

Median Household Income by Census Tract in Stockton, CA
Click the arrows in the upper left corner to view the legend.

How the money is used

SEED found that the way the recipients spent their $500 was mainly on necessities, and that their spending differed from before and after the COVID-19 pandemic.

Spending before the COVID-19 pandemic

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Infographic of SEED recipient spending
SEED Participant Spending Before the COVID-19 Pandemic - How SEED recipients spent their money, before the COVID-19 pandemic

 

Stories from recipients

"Rory Thacher, 29, is a custom motorcycle saddle bag maker with a store front in Stockton. Thacher is a college graduate with a communications degree. He said since receiving the $500 a month via debit card in February, he has saved most of it up to pay off student loans, pay for a vacation or invest into a retirement fund."

From ABC 10 News, San Diego, CA.

"Tomas Vargas, 36, is married with two children under his roof, an 8-year-old girl and a 6-year-old boy. One of the things he managed to do with the UBI grant [universal basic income] was spring for tutors for them. His daughter wants to be an astronaut and his son is good at math. 'It freed me up and gave me just another gust of wind,' says Vargas, who recently landed a new job at the local airport."

From The Record, Stockton, CA.

"For Falaviena Palefau, 30, her priorities were utility bills and debts she'd accrued. Another was getting her driver's license, something she kept 'putting off to the side because there's more important things.' She also noticed that the guaranteed income, dispensed via ATM card halfway through the month, really helped at the end of the month, when her food stamps often ran out and she and her two children might have to visit a local food bank. 'Being able to provide for my kids ... for me, that's a really big deal,' Palefau told ABC News. So were her daughter's shoes. 'She asked to get a pair of shoes that she wanted for some time now,' Palefau said, referring to her daughter. 'It felt so good to give her the money and go get it.'"

Spending during the COVID-19 pandemic

“We found that during the COVID time, food spending went up, from about a third of all purchases to up to 50 percent. Spending declined on things like appliances and clothing, et cetera. Folks are really hunkering down and making sure they have the basics to shelter in place.” -Mayor Michael Tubbs
 
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Infographic of changes in spending for food compared to other categories.
SEED Participant Spending During the COVID-19 Pandemic, March-June 2020 - From KQED's The California Report, interview with Lily Jamali and Mayor Michael Tubbs
 

Stories from recipients

“The SEED money has allowed me to purchase food for my family, so I had enough when the pandemic hit. It’s only 500 dollars, but it does make a big difference to a single mother supporting a family. It allows my kids to eat.” – Lorrine Paradela

From The Houston Chronicle, Houston, TX

“SEED has given me peace of mind. I don't need much since the pandemic, but I have confidence that we’ll be ok. For now, I am focused on saving each month so I’m not at zero when this is over.” - Virginia Medina

From The Houston Chronicle, Houston, TX

What Stockton has learned from SEED... and what you can, too

"The financial difficulties associated with at-home parenting, terminations, and working from home shared by SEED participants represent windows into American life. Conventional wisdom dictates we’re to have three months of savings for emergencies, but due to rising inequality few did — and apparently, few corporations did either. More people filed for unemployment in March and April than during the Great Depression. The CARES Act provided a modest $1,200 stipend to many, but not all. Bipartisan support for stimulus payments offers hope, but payments need to match the scale, scope, and duration of the crisis. In this, we look toward what we’ve learned from SEED," according to Amy Castro Baker and Stacia Martin-West, SEED researchers, in The Appeal.

Castro Baker and Martin-West offered further context about why the COVID-19 pandemic gives additional importance to focusing on those earning lower wages:

  • "First, we must preserve existing benefits like health insurance, food stamps, and Supplemental Security Income to protect the most vulnerable. 
  • Second, we must provide recurring cash transfers to workers facing the most risk — and who we now count on to save us. 
  • Third, we must realize this window of opportunity, a moment in history for reimagining a more just trajectory."
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Photo of Stockton, CA Mayor Michael Tubbs
Michael Tubbs, Mayor of Stockton, CA. Picture from his Twitter profile, @MichaelDTubbs

"Coronavirus is far too bleak to talk about silver linings...but the coronavirus will leave legacies, and one may be the way it made the country reconsider its economic foundation. 'Every century or so we find a way to be more humane, more civilized, and extend the safety net,' Mayor Michael Tubbs says. '300 years ago, I was literally property. Sometimes it takes a pandemic, a crisis, or in the case of slavery, a war, to get where we need to be.” - Mayor Michael Tubbs, from Cal-Alumni Association Magazine, University of California-Berkeley

Ready to learn more and take action?

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