A pilot guaranteed income program in Newark funded by foundation grants provided 400 city residents payments totaling $12,000 over two years. Steve Strunsky | NJ Advance Media For NJ.com
It was 2021, and Jennymarie Idrobo was a recent Montclair State University graduate sharing an apartment in Newark with her mother after her father had recently died.
Idrobo was working part-time, making $17 an hour as a fellow with a local nonprofit and struggling to pay her bills, constantly stressed out about her future, her widowed mother’s well-being, and the family’s hand-to-mouth finances.
And then some money changed everything.
Idrobo, now 26, was one of 400 Newark residents randomly selected from among 4,700 income-qualified applicants to receive payments totaling $12,000 over two years to use as she pleased, no strings attached, under what’s known as a guaranteed income program.
“I had student loans so that money I was getting monthly was going to my student loans, was going to money my mom needed for groceries, so I ended up taking up the grocery bill each month, and then I also took in the water bill. So I relieved my mom of a lot,” said Idrobo. “So that kind of lifted us.”
The extra money kept her and her mom going, and she was later hired as a full-time program associate for the Newark-based Gem Project, a nonprofit that helps high school students graduate on time.
Idrobo spoke to NJ Advance Media at a forum Tuesday on the Newark Movement for Economic Equity guaranteed income pilot program launched by the city in 2021 under Mayor Ras J. Baraka in collaboration with the University of Pennsylvania.
The $4.8 million program was funded by some of Newark’s best-known philanthropic organizations, including the Geraldine R. Dodge Foundation, the Prudential Foundation and Victoria Foundation. The Morristown-based MCJ Amelior Foundation, the Princeton-based Robert Wood Johnson Foundation, and the Stadler Family Charitable Foundation in Titusville also contributed.
Tuesday’s forum, which included the income program’s manager, Kaleena Berryman, coincided with the release of an analysis of the trial by the University of Pennsylvania’s Center for Guaranteed Income Research. The study found that the program improved income stability, stress levels, food security and other quality of life indicators for individual recipients and their families, though the improvements faded after the payments ended.
“The purpose of GI is to serve as a short-term financial intervention to stabilize households and provide pathways to economic mobility or other social benefits that take time,” Amy Castro, co-founder of the UPenn center, said later.
“The benefit of cash is speed, flexibility and efficiency,” Castro added. “If you lose your job and are on the verge of eviction, you do not have the luxury of time to navigate the complexity of housing services.”
The center was also involved in a more modest pilot program in Paterson launched in 2021 by Mayor Andre Sayegh, where 110 residents got $400 debit cards each month, with results similar to Newark’s, according to a report released last year.
Newark’s program differed from Paterson’s in that Brick City recipients were divided into two groups: one whose members received a total of four lump-sum payments of $3,000 each over the two-year trial period; and the other two payments of $250 per month for 24 months.
The programs included control groups of non-recipients against whom the behavior and attitudes of recipients were compared.
Members of both groups tended to experience similar improvements in their well-being, according to the analysis, though how they spent the money differed.
For example, those receiving lump sums tended to make larger one-time purchases or investments in things like household appliances or car repairs, while bi-monthly recipients tended to spend their smaller payments on rent, food, and other recurring expenses. Members of the lump sum group were also more likely to accumulate savings of at least $500. The analysis did not recommend one form of payment over the other.
Proponents of guaranteed income programs tend to be urban progressives like Sayegh and Baraka, who, along with Hoboken Mayor Ravi Bhalla and Trenton’s Reed Gusciora, are members of the nationwide Mayors for a Guaranteed Income coalition, one of the Newark program’s sponsors.
Baraka, an outspoken progressive who finished second to U.S. Representative Mikey Sherrill in last week’s Democratic gubernatorial primary, said this was an opportune time to showcase initiatives like guaranteed income as President Donald Trump and fellow Republicans seek tax cuts for middle-class and wealthy Americans and work requirements for recipients of federal benefits.
“I think it’s timely that we talk about this now, and we try to expand it now, especially in an environment where the richest people in the world are trying to take food out of the mouths of some of the most struggling in this country in the world,” Baraka told Tuesday’s gathering. “The best way to fight against the things that are happening now is to prove all these people wrong.”
The UPenn analysis includes findings for most recipients in the following areas:
- Financial Resilience: Six months into the pilot, people receiving recurring payments demonstrated reduced income volatility and, by 18 months, showed an increased ability to handle a $400 emergency expense compared to the control group. People receiving lump-sum payments were better able to handle a $400 expense at six, 12, and 18 months.
- Parenting: Recipients of both groups were able to spend more quality time with their children, whose grades at school and enrollment in advanced placement courses improved, compared to children from the control group.
- Housing Security: Recurring payment recipients could better maintain stable housing than the control group, while lump-sum counterparts could more easily handle big transitions like moving. Homelessness among people with recurring payments vanished from 3% of recipients originally. For the control group, the homelessness rate remained at 2-3% throughout the trial period.
- Food Security: Recipients of recurring payments reported significantly improved food security after six months, with continued improvement throughout.
- Mental Health: Recipients of recurring payments had significantly lower stress levels at six months and reported less depression and anxiety during the first 18 months of the pilot compared to the control group.
Susan Garofalo, a spokesperson for Baraka, later said the city would use study results to “inform state-level policy recommendations on expanding programs that offer residents unrestricted cash.”
Those programs would also include an increase and expansion of the child tax credit and initiatives that the city collaborated on with the nonprofit New Jersey Policy Perspective.
Publicly funded social safety net benefits — for food, housing and healthcare — tend to come with strict rules for eligibility and how recipients can use the funds, which in the case of Section 8 vouchers, for example, are paid directly to landlords.
The Newark program’s eligibility requirements were that recipients be impacted by the COVID-19 pandemic and earned less than $25,760 a year, or 200% of the federal poverty level in 2021.
Idrobo said restrictions on the Newark program would not have let her tailor the aid to her particular needs.
“I feel like if it was more restrictive, I wouldn’t have had the chance to do the things I actually needed,” she said. “It gives you flexibility. And a lot of people don’t realize the emotional well-being of receiving money.”
The concept of guaranteed income, also known as universal income, is hardly new, though it remains controversial and has not been widely embraced on a permanent basis. Its diverse range of proponents have included the Rev. Dr. Martin Luther King Jr. and Republican President Richard Nixon, whose proposed Family Assistance Plan would have provided a minimum income to male heads of households.
But contemporary conservatives tend to oppose guaranteed income, which some research suggests may have unintended consequences.
For instance, a study published in July by the nonprofit National Bureau of Economic Research examining a 3-year pilot program in Illinois and Texas found that its 1,000 guaranteed income recipients tended to work fewer hours and earn less from non-program sources than their control group counterparts. The NBER report found that the guaranteed payments “caused individual income to fall by about $2,000/year relative to the control group and a 3.9 percentage point decrease in labor market participation.”
Critics at the conservative Badger Institute seized on the NBER report to argue that guaranteed income is a disincentive to work.
“The findings suggest that rather than enabling people to overcome financial barriers and find better work,” James Bohn, an economist with Badger, wrote in November, “unconditional cash payments detach them from work, making it less likely that they will achieve self-sufficiency, potentially harming their longer-term economic well-being, and raising the cost of social welfare programs.”
But UPenn researchers looking at Newark’s program said recipients seemed eager to find a job.
“When unemployed,” the UPenn study found, recipients were “significantly more likely to be looking for work compared to the control group.”
Stories by Steve Strunsky
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Steve Strunsky may be reached at sstrunsky@njadvancemedia.com