LOUISVILLE, Ky. — At the end of April, participants in Louisville's new guaranteed income program will receive their first monthly payment of $500. The money will be theirs to do with as they please and one month later, they’ll get paid again.
“Rent, food, school, home expenses, child care — whatever allows them more flexibility in planning and building for their futures,” Mayor Greg Fischer explained earlier this month when announcing YALift!, or Young Adult Louisville Income for Transformation.
The program will accept 150 people from the ages of 18 to 24 who live in three Louisville neighbors disproportionately affected by poverty — California, Russell and Smoketown.
Those participants will join thousands of Americans who have benefited from a recent wave in guaranteed income pilots, which are now taking place in over 20 American cities, from Tacoma to Gainesville.
The pilots aim to study an idea whose historical advocates include Thomas Paine and Dr. Martin Luther King, Jr. Proponents of guaranteed-income programs say poverty is best addressed by giving people money and allowing them to decide how to spend it. Unlike food stamps or Section 8 housing vouchers, the guaranteed income model is predicated on a no-strings attached delivery model.
“The idea is to support people’s agency and their choices regarding health, safety, opportunity and fulfillment,” Fischer said.
As Louisville’s program begins, others across the country are ending, providing a picture of what YALift! may do for participants.
Last week, most of the 150 participants in St. Paul, Minnesota’s guaranteed income pilot, received their 18th and final $500 payment. And a picture is already emerging of how they used the money.
“About a third of their dollars were spent on food and a third on retail,” said Muneer Karcher-Ramos, Director of the office of Financial Empowerment in St. Paul. “Next, would be medical needs, co-pays. That kind of thing.”
Those numbers differ only slightly from data out of Stockton, Calif., which launched the nation's first guaranteed income program in 2019. A study after the completion of the Stockton Economic Empowerment Demonstration (SEED) showed that more than a third of money was spent on food, followed by sales and merchendise, auto care and utilities.
Participants also used the money to improve their working situations. In St. Paul, some paid for child care and some paid for computer coding classes, Karcher-Ramos said. Others simply took time away from work to interview for a new job, using the $500 payment to make up for the money lost by missing a shift.
After the SEED program, data showed participants were more than twice as likely to find full-time employment than non-participants.
“Simply put, when every dollar of wage work is allocated for bills before it is earned, most cannot afford to skip work, or take necessary steps toward better employment, structurally trapping them regardless of individual effort,” the study said.
Guaranteed income programs don’t just benefit participants economically. They’ve also been shown to boost psychological health and reduce stress.
Karcher-Ramos has seen that in St. Paul, where participants have expressed relief from the stress that comes with living on the economic fringes. “You’ll hear folks say, ‘I can breathe,’” he said. Some participants have been able to buy birthday cakes, or take their families out for ice cream, activities Karcher-Ramos described as “micro things that add up to a lot in terms of enjoyment in everyday life.”
Qualifying for guaranteed income programs differs in different cities. In some places, participants must be mothers, live in certain zip codes, or take part in other city-run programs. In St. Paul, participants were selected at random from families enrolled in CollegeBound Saint Paul, the City’s college savings initiative, and were required to have been financially affected by the pandemic.
Louisville is among the first to specifically target young people.
“What we’re saying with YALift! is that young people deserve opportunities,” said Maya White, Senior Associate for Russell: A Place of Promise, which will help administer the program. “Young people deserve to make decisions for their well being, to make investments in their lives, to make power moves, to be the best people they can be.”
YALift! will cost $1.1 million to administer, with $500,000 coming from each of the Metro United Way and Mayors for Guaranteed Income, an organization that advocates for city-led guaranteed income programs. Louisville Metro Government will contribute another $100,000 to support the program.