Study: St. Paul's guaranteed income program improved families' well-being

In a home on the edge of St. Paul's Payne-Phalen neighborhood, presents sat neatly wrapped under the Christmas tree as 3-year-old Amary Lockridge climbed onto Damara Clark's lap for a hug.

Clark, a 52-year-old mother of three adult children and grandmother of 10, agreed to be Amary's foster mom in 2020. When she took full legal custody of the child about a year later, Clark quit work to care for Amary, who was born with spina bifida and required dozens of medical appointments.

Then Clark received a flyer from St. Paul about the city's guaranteed income pilot providing low-income families $500 a month. No strings attached.

St. Paul was the first U.S. city to use federal COVID-19 aid to launch a guaranteed income program in the fall of 2020. In the months that followed, dozens of local governments across the country (including Minneapolis, whose two-year guaranteed income program will wrap up in June) followed suit, unconditionally distributing cash in hopes of providing relief to residents — and trying to make the case for new state and federal policies by challenging narratives of poverty and welfare.

Now a new study by the University of Pennsylvania, of 95 families who completed St. Paul's 18-month pilot, has found that participants reported improvements to their financial and mental well-being.

"It feels like we are exposing all of the lies that we've all believed — without any data, without any research, without any evidence — about poverty," St. Paul Mayor Melvin Carter said in an interview.

"We're peeling away those layers, which I think is something that's absolutely necessary for us to have a real conversation about how we take care of people in the richest country on the planet."

For Clark, the extra $500 a month has at times gone toward diapers, groceries, cell phone and internet bills, an ice cream outing for the family — and a few of the gifts under the Christmas tree.

"Just that little bit helps. People don't understand that," Clark said. "You have a little more leeway. Instead of being like, 'Oh my God, oh my God, what am I going to do?' You can say ..."

She paused, then exhaled a sigh of relief.

Improved outlooks, elusive savings

Using surveys and interviews, Penn's Center for Guaranteed Income Research looked at how monthly cash payments affected St. Paul families' experiences and well-being. The study, which has not yet been peer-reviewed, includes data from the city's People's Prosperity Pilot, which gave 150 families $500 a month from October 2020 to April 2022.

Recipients were randomly selected from a list of families enrolled in St. Paul's CollegeBound program, which launched at the start of 2020 and sets up a $50 college savings account for every newborn in the city. To qualify, families had to show they were economically affected by the pandemic and had an income at or below 300% of the federal poverty level (currently $90,000 for a family of four).

Penn researchers highlighted a few key findings: During the guaranteed income program, 40% to 47% of participants said they could cover a $400 expense, but that figure dropped to 33% six months after payments stopped.

Similarly, 39% to 41% of participants said they had more than $500 in savings during the program, but only 27% said the same six months later.

"I think one of the most moving findings is the increase in positive outlooks on life, which was maintained six months post the last disbursement of funds," said research scientist Kalen Flynn, the report's lead author. "A positive outlook on life is an antecedent of hope, which is necessary for economic mobility."

The study also found that the percentage of participants employed increased from 49% at the start of the pilot to 63% six months after its conclusion. The Penn team now is conducting research on pilots run by local nonprofits focused on artists and refugees.

Lucille O'Quinn, a school bus driver, saw her work halt in the early days of the pandemic. The mother of seven is featured prominently in the documentary "It's Basic," which premiered at the Tribeca Film Festival last summer and tells the stories of guaranteed income recipients in St. Paul and other cities.

"I'm doing really good now. I'm back on my feet. Work is steady," said O'Quinn, who picked up a second part-time job as a personal care assistant, though she noted that the extra income meant a cut in her son's Social Security benefit.

"That hasn't discouraged me or anything, because you know what? It feels good to continue to work, and I'm not going to limit myself," O'Quinn said.

A path forward?

The popularity of the guaranteed income pilots has started to spur debates at other levels of government. The DFL-majority Legislature passed a new child tax credit last session, even as efforts to maintain the federal government's pandemic child tax credit extensions fell short.

DFL lawmakers last spring also introduced a bill to allocate $200 million in grants for local governments, nonprofits and tribes to launch additional guaranteed income pilots. Republicans say that such programs "place an unsustainable burden on taxpayers and hinder economic prosperity," said Anna Mathews, executive director of the Minnesota GOP.

But Carter said he thinks early data from the pilots refutes the argument made by Republicans — and he and others are hoping to provide more evidence.

St. Paul's second city-run pilot is using a control group to examine whether those receiving the $500 monthly payments fare better than their counterparts. That two-year program, dubbed CollegeBound Boost, is giving 333 families guaranteed income, plus an additional $1,000 in their child's college savings account.

Carter said that while it's "not impossible" St. Paul will launch another pilot down the road, his long-term plan "has always been to offer our cities as laboratories through which larger policy considerations can be studied."

Clark, a CollegeBound Boost participant whose monthly payments will conclude next fall, said she's preparing for that transition. Amary recently started school, freeing up Clark to soon start working part time. She's also taking classes in human services, in hopes of someday opening a home for girls with disabilities.

"Somebody has given me the chance to stand on my feet and do better for myself and my household," Clark said. "I want to pay it forward and put it back into my community."