Los Angeles and Oakland parents who received monthly cash without restrictions from new pilot programs said it did more than help them pay bills. What they gained, they said, was priceless — more time with their children.
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Before the pandemic, Claudia Gutierrez worked day shifts in one fast food drive-thru and night shifts in another, never making more than the minimum wage.
The coronavirus cut those hours in half.
Gutierrez, 51, lives with her two teenagers, an adult daughter, her daughter’s boyfriend and their 8-year-old child in an apartment in south Los Angeles. Her daughter and daughter’s boyfriend also worked in restaurants.
The pandemic threw the family into financial peril. At one point, the whole family got sick except her. They received some state rental assistance during the pandemic, but as an immigrant, Gutierrez doesn’t qualify for many other forms of aid.
Still, even though the family had to move to a new apartment, they managed to stay afloat last year — with the help of $1,000 a month from the city of Los Angeles, in one of the nation’s largest experiments with a “guaranteed income.”
Gutierrez was one of 3,204 people randomly selected for a one-year pilot program that gave Los Angeles families living in poverty monthly cash payments, with no restrictions.
The payments, Gutierrez said, helped her find a new home, lowered her stress and gave her time with her children.
“It impacted me personally in every way,” she said, “mentally, emotionally, in every sense.”
It was one of dozens of similar experiments that municipalities and nonprofits across California have launched in recent years. Like the one in Los Angeles, many of the experiments are publicly funded, often using COVID relief dollars from the federal government.
The payments in Los Angeles ended in December. Researchers at the University of Pennsylvania and University of Southern California are studying the effects on the recipients’ physical and mental health and financial stability.
Of the more than 40 guaranteed income pilot programs that CalMatters identified as operating or preparing to launch across California, roughly a third are like Los Angeles’: targeting low-income families with at least one child in the home.
Families with children have long been the subject of policy debates about how to best alleviate poverty and improve social mobility for future generations. Studies show cash transfers to low-income families — especially when children are young — are associated with improved child development, better performance in school, stronger health outcomes and increases in the children’s future earnings.
But most safety net programs restrict spending to specific items, such as food, and the nation’s primary program for cash aid to families with children — welfare — has long had work requirements and other criteria to receive assistance.
A 1996 federal law aimed at reducing welfare enrollment eliminated what used to be a guarantee of aid for families who qualify based on income, precipitating steep declines in those receiving assistance. The policy’s work requirement was intended to reduce dependence on welfare, but anti-poverty advocates have criticized it as too rigid, given the barriers poor people face finding well-paying, stable employment.
Now cities like Los Angeles, and several others in California, are testing guaranteed income programs as a new, unrestricted form of assistance, in the hopes that the flexibility will allow families to address the myriad challenges of poverty themselves.
A difficult choice
Unlike other aid programs, LA’s guaranteed income pilot had no mandates.
Gutierrez didn’t have to prove that she had worked a set number of hours. There were no restrictions on how she could spend the money. She didn’t even need to be a U.S. citizen.
To be eligible, Gutierrez just had to be a city resident meeting certain poverty measures, and she had to have at least one child or a college-aged dependent living at home.
The money came every month; it didn’t go up or down depending on how much she earned on her jobs.
Shortly after payments began last January, the family was notified that their building was being sold. Gutierrez saved the first few guaranteed income checks as she apartment-hunted in one of the tightest housing markets in recent history.
Between the first month’s rent, the security deposit and moving costs, the payments covered the nearly $6,000 it took to get them into a new apartment, she said, a sum she had never had all at once before.
The rest of the year, the payments went toward rent and other expenses. Each month, she set aside $100 for her children to spend as they wished. She took her 14-year-old daughter to a beloved Thai restaurant in Hollywood. A video on Gutierrez’s phone shows the girl beaming over a bowl of soup.
Gutierrez kept working part-time. Last year, sky-high gas prices made commuting to the second job hardly worth her time and money, she said; the cash payments helped supplement the loss of income. Since they’ve ended, she hasn’t gotten the hours back at the second job yet, so her family has cut back on expenses again.
In the past year Gutierrez noticed her anxiety, which had built so high she once saw a doctor for vertigo, had begun to ease.
The most consequential thing the money bought, Gutierrez said, was freedom from a difficult choice. For years multiple jobs kept her away from watching her children grow up; the thought still brings her guilt.
“Either I gave them food and I could have money, or I could just be there with them,” she said. “But what was I going to do being with them if I didn’t have money?”
Some of her older children didn’t finish high school. This year, her 18-year-old son is on track to graduate, she said, and the 14-year-old is planning her classes with college in mind.
Gutierrez takes it as a sign she has been “staying on top of them.”
“I would never leave my job, because I am not a person who wants to be at home doing nothing,” she said. “I said to myself, this (program) would be for me an opportunity to offer my children a better lifestyle, to have more time for them.”
California lawmakers OK funding programs to guarantee some people — especially foster youth and pregnant women — an income floor.
Critics of guaranteed income programs say they discourage work and stretch the government’s safety net beyond what’s feasible.
Proponents argue giving unconditional cash to people in poverty grants them flexibility when wages, welfare and charity aren’t enough. In particular, the payments can help those who need time for a valuable, uncompensated job: raising children.
“There’s so much academic research that shows that stabilizing the home a child lives in gives a generational impact for 10, 20 years,” said Aly Bonde, manager of a guaranteed income pilot program in Oakland.
The city and a nonprofit called Oakland Thrives are testing an 18-month run of guaranteed income two ways: One 300-person group includes randomly selected families with children, who take home less than half the area’s median income and who live in east Oakland. The second cohort, also a 300-person group of even lower-income families, was randomly selected from across the city and they will be compared to a control group in the study.
Blue Meridian Partners, a New York-based private philanthropic organization, is funding the payments of $500 a month for both cohorts. The first cohort, after finishing its 18-month run, recently was extended for six months with a donation from the San Francisco Foundation.
A 2018 Oakland city report found white households in the city have three times the income of Black households and more than 1.5 times that of Latino households.
Program managers picked the neighborhood of the first cohort because its residents are predominantly people of color; city leaders said it’s an area of “prime importance and high racial disparities,” and it was hit hard by the pandemic, Bonde said.
Researchers will be studying how guaranteed income affects recipients’ health, employment, financial stability and wellbeing, as well as children’s educational outcomes and families’ housing stability.
Bonde said the hope is the program can improve children’s social mobility.
While parents have reported using the money to pay for basic necessities, she said, unrestricted cash could free up their time in ways that can have long-term benefits — such as allowing parents to miss an hour of work to attend a school meeting or to pay for child-care so they can take a night class or receive job training.
Noé Salgado, a 38-year-old warehouse worker, was a recipient in the first cohort. In 2021 he was living with his wife and two small children in a one-room apartment attached to his mother’s house.
His work hours had been reduced during the pandemic and the family had fallen behind on bills, he said.
The first few payments from Oakland went to catching up on bills and moving his family into an apartment of their own — a two-bedroom for him, his wife and their now four daughters.
After that, the checks allowed Salgado to buy the children clothes and supplies, and himself power tools to start a car alarm installation business.
Unable to afford childcare for the girls, all under the age of 6, Salgado’s wife stays with the children at home, and Salgado works the equivalent of two jobs at the warehouse to make ends meet.
He said he hopes the installation business takes off and, with more flexible hours, he can bring in enough income to replace some of his time at the warehouse.
“I was trying to use the money in ways where it can produce more money for me,” he said.
He also splurged on the occasional treat for the family, like a trip to the Gilroy Gardens amusement park.
“It felt really good to see my kids happy,” he said. “It was a feeling I’ll never forget.”
Carlos Aviles, and CalMatters’ Liliana Michelena, contributed reporting.
more on guaranteed income
State and local governments, and some private funders, are launching dozens of pilot projects making direct, monthly payments to low-income residents to help meet basic needs. Researchers will study what happens next. Key question: will this money add to, reform, or supplant current welfare programs?