Guaranteed income and its close cousin Universal Basic Income have been proposed as solutions for both social justice and economic stimulus for decades, with leading voices as disparate as Martin Luther King, Jr. and economist Milton Friedman advocating for the establishment of a guaranteed income. While some say it is a form of welfare, advocates argue that it would help to relieve dramatic socioeconomic disparities and even potentially reduce dependence on government programs. A new groundbreaking pilot program in Los Angeles, co-led by USC Suzanne Dworak-Peck School of Social Work Assistant Professor Bo-Kyung Elizabeth Kim, seeks to inform the debate with scientific data that demonstrates real-world impact.

A BIG:LEAP for working families in Los Angeles

BIG:LEAP (Basic Income Guaranteed: Los Angeles Economic Assistance Program) is the first study of its kind to address income inequality in the metropolitan area and one of the  largest guaranteed basic income pilots in the country. The Los Angeles Mayor’s Office, City Council offices, and the Community Investment for Families Department worked closely with Amy Castro and Stacia West, founding directors of the Center for Guaranteed Income Research (CGIR), to design the program and develop the research pilot, which will help grow the country's body of guaranteed basic income research and help shape future policy reform. Kim is co-principal investigator for the BIG:LEAP study, leading the survey administration and data analysis, as well as participant retention, for the 18-month program.

“Our country has really taken a punitive approach to people who are struggling,” said Kim, the study’s principal site investigator. “As social workers, we know that people need help. As researchers, we are testing the effects of guaranteed income with the highest standard of research, a randomized control trial. The results could be used to implement policies that prioritize economic justice.”

Approximately 3,200 Angelenos have been selected from over 100,000 applicants to receive $1,000 per month for 12 months, and another 3,700 selected to operate as the control group. The study is specifically examining the impact of guaranteed monthly income on working families with children living below the Federal Poverty Level. BIG:LEAP began distributing monthly cash payments in January 2022 and is currently in its second round of 90-day-interval survey collection for both guaranteed income recipients and the control group participants.

"BIG:LEAP would not be feasible without the dedicated leadership of Dr. Kim,” West said. “She brings an expertise in social work and conducting research alongside a community to this study, and we are thrilled to partner with her and USC.”

Los Angeles is ranked the 7th most expensive city in America, with a cost of living that is 51.9% above the U.S. average but median annual incomes at only $296 above national average.  It is one of the most diverse cities in the world, making it an ideal location for testing the impact of guaranteed income on working families from a variety of backgrounds and lived experiences. According to BIG:LEAP, poverty affects two out of every 10 residents in Los Angeles, the majority being people of color and 31% of them children. One-third of working adults in Los Angeles are not able to support their families with full-time work alone.

“When Los Angeles puts its stamp on a transformational issue, we don’t follow — we lead, and we believe that BIG:LEAP will pay large dividends for health and stability across our city and light a fire across our nation,” said Los Angeles Mayor Eric Garcetti.

CGIR previously tested this model with a highly impactful pilot in Stockton, California called SEED (Stockton Economic Empowerment Demonstration) in which 125 Stockton residents were given $500 a month for two years. The study found that guaranteed income reduced month-to-month household income fluctuations, increased the likelihood of recipients securing full-time employment, created new opportunities for self-determination and risk-taking, and even increased their overall health and well-being with participants reporting less depression and anxiety. BIG:LEAP extends this research, doubling the monthly cash payment amount and increasing the number of participants twentyfold.

Economic status as social determinant

Kim has focused her career on racial bias in the justice system and has extensive experience using administrative data from multiple government agencies, as well as working with large teams conducting complex randomized control trials. However, it took the pandemic to focus her lens on poverty as a social determinant independent of, and in addition to, other factors such as race and ethnicity or legal system involvement.

“Coming out of the pandemic, it just felt so real, the struggles when you don’t have enough money,” Kim said. “We had all these youth in the justice system during COVID required to attend school and submit assignments online and yet live in households with no broadband WIFI. It was clear that a lot of the demands that we put on these families and people were not being met because they were poor. So many were struggling to put food on the table, let alone a private room to attend online classes.”

In her current work with the Los Angeles County Office of Education, Kim discovered that every one of the youth incarcerated in Los Angeles County in the 2021-2022 school year qualified for free or reduced-price lunch, a key indicator of poverty. “That doesn’t mean that only kids who come from low-income families are the ones committing crime. These are the kids that get caught up in the system,” she said “But what if we provide guaranteed income to ow-income families who are just struggling to make ends meet? Could that further support young people who are living with them? Economic inequity along with racial and ethnic inequity contributes to legal system involvement.”

Kim is also leaning in to her expertise on racial and justice system issues, working with CGIR to include questions in the BIG:LEAP surveys around criminal justice involvement, race and ethnicity, and housing status to see the potential impact of guaranteed income on different populations.

The power to choose for themselves

A central tenet of guaranteed income is that participants choose how they spend the money they receive, without any restrictions or requirements. Kim says that a priority for the CGIR team is “changing the rhetoric about poverty,” deemphasizing the shame and acknowledging that people in poverty often know far better than anyone else what they need and how to spend money wisely.

In fact, the results from the first-year of the Stockton SEED program found that the majority of people spent the money on basic needs, with food leading the list at 37%, followed by clothing and home goods at 22%, utilities at 11% and auto costs at 10%. Despite fears, less than 1% was spent on alcohol or tobacco. The program also had indirect benefits, with recipients obtaining full-time jobs at twice the rate of non-recipients and showing statistically significant improvements in emotional health, fatigue levels and overall well-being.

“We have this tight grip on the welfare benefits we provide, monitoring and restricting what you can buy. Why can’t you treat your family tor a nicer meal than you can normally provide once in a while?” Kim said. “We want to show policymakers that people are indeed using this money in the way they need to, even without us monitoring it on a daily basis. People without means know how to use money, and I think that's something we need to realize.”