According to a report by the Center for Guaranteed Income Research (CGIR) at Penn’s School of Social Policy & Practice (SP2), findings from the Paterson Guaranteed Income Pilot Program (GIPP) show links between unconditional cash and recipients’ overall well-being, financial stability, time management, and sense of belonging.
The program, spearheaded by Mayor Andre Sayegh and a task force in Paterson, New Jersey, offered $400 monthly cash payments to 110 randomly chosen individuals and families from July 2021 to June 2022.
Recovering glory
Paterson, once a bustling industrial hub, has a storied history of championing justice-oriented initiatives. Dating back to the 1800s, it played a crucial role as a stop on the Underground Railroad. In the 1900s, it gained further renown for the Paterson Silk Strike, a pivotal moment in the fight for labor rights.
Known for its vibrant mix of racial and ethnic backgrounds, Paterson was among the first cities to explore the idea of providing unconditional cash support to residents facing significant economic hardship during the COVID-19 pandemic.
“The $400 monthly cash allowance, while not a panacea, offered financial relief for many participants and served as a valuable blueprint for future policy initiatives—particularly in a diverse city landlocked by extraordinary wealth and exorbitant housing costs,” the researchers explain.
Guaranteed income
As part of The American Guaranteed Income Studies series published by CGIR, the report reveals how participants in the Paterson Guaranteed Income Pilot Program (GIPP) experienced various benefits despite the challenges posed by the pandemic and nationwide inflation.
The key findings include:
- Enhanced quality of life: Guaranteed income helped participants cope with household chaos, mental distress, and food insecurity.
- Improved financial well-being: Participants showed increased financial resilience, stability, savings, and ability to handle unexpected expenses.
- Greater control over time: Recipients found it easier to balance paid work and unpaid caregiving responsibilities.
- Enhanced social connection and belonging: The program fostered mutual support and community interdependence, reducing feelings of social isolation and loneliness.
Participants in the program were selected based on their income levels, falling below New Jersey’s living wage thresholds. The impact of the program was assessed by comparing them to a control group of 131 county residents who did not receive payments.
The unconditional nature of the income gave participants the freedom to spend it as they deemed fit. One participant expressed relief, stating that the income allowed them to avoid grueling work hours and prioritize their children’s education.
While the gains experienced by participants were largely temporary, the report suggests that the program laid the groundwork for long-term goal-setting, risk-taking, and community empowerment, despite not fully alleviating the broader stressors faced by the Paterson community beyond the pilot program period.
“While the pilot’s findings highlight persistent gaps and needs, they also underscore the program’s role both as a catalyst for change and a beacon of hope amid adversity,” the authors conclude.
