Does giving people money with no strings attached stop them from working? A recent report from the Workforce Development Council (WDC) of Seattle-King County showed just the opposite.
From 2022-2023, the council piloted a guaranteed basic income program that gave 102 participants $500 per month for 10 months. When it ended, employment nearly doubled among the participants. On average, the new jobs paid more and came with more benefits.
"It's not a surprise to me,” said Gyanendra Subba, a project manager at WDC who helped design the program. “We started this with that hypothesis: this is going to help, this is going to have better outcomes."
The WDC is a nonprofit organization that focuses on economic growth in the Puget Sound region. It partnered with several organizations that randomly selected people from their respective memberships to participate in the pilot program. The funding came from a mix of state, county, and private dollars.
Direct cash assistance helps people get out of poverty by allowing them to spend less time working and more time looking for a better job, finishing school, or learning new skills, Subba said.
“Opportunity cost is trapping a lot of hardworking people because career advancement is not in their favor.”
Participants reported higher financial stability after receiving the money, including an increase in the number of people who had savings. Among children with families, the percentage of them with savings went from zero to 42%, according to the report.
For some participants, the money went directly to a fixed cost like rent, and for others, the participants were able to decide whether they wanted to do that or receive the cash. Subba said most people chose the cash.
The program was designed with this flexibility to prevent people from falling off a so-called ‘benefits cliff’ where the additional dollars would kick the participant off of other public assistance programs like food stamps because they would suddenly be outside the income threshold.
The pilot’s report follows success from similar programs in Tacoma and South King County as well as dozens of programs around the nation.
The guaranteed income program in Tacoma, GRIT, is currently selecting its second cohort after a successful pilot in 2022. The program says it received 2,000 applications, and it will randomly select 175 people to receive $500 per month from April 2024 to March 2025.
WDC plans to run their program again, too. Despite these successes, efforts to start a statewide program have stalled in Washington’s legislature.
“We cannot go back to how things have been done, we have to reimagine this,” said Marisol Tapia Hopper, director of strategic partnerships and funding at the council. “We have to pioneer initiatives that we don’t know are going to be successful, we have to test them.”
Hopper hopes this pilot can be a model for other programs in the state and around the country.
Hopper said her current focus is figuring out how to make the program sustainable, replicable, and bring in more funding. She said the goal is to increase the number of participants starting this year and to increase the amount of the incentive to $1,000.
WDC’s program was designed to build on existing infrastructure and relationships with partner organizations already in place. This allowed all of the funding to flow directly to participants without incurring any administrative cost, Subba said.
Rather than each organization focusing on their individual goals and outcomes, by working together to implement this pilot, they could address the systemic issues that keep so many hardworking people trapped in poverty.
"We did not do anything extraordinary,” Subba said. “We just reshuffled our dollars and our funding streams. The funding is there in the system. It's just figuring out how funders can collaborate and support this initiative to have better systemic outcomes that help people in the long run."
