GARY, IN — Does giving families free money each month help people get out of poverty? Organizers of a plan in Stockton, California say it does. Now, the universal income experiment is being tried in similar pilot programs across the country.
Gary, Indiana, a city that has struggled with economic hardship for years, is now testing out the guaranteed income model.
Once a prosperous steel city and known as the birthplace of the man dubbed "King of Pop," Michael Jackson, it’s now home to some 13,000 abandoned properties. More than 30 percent of its residents live below the poverty line.
“What I have seen is people literally, if you give them the information that's needed, if you give them a hand up instead of a handout. They do good with it,” said Burgess Peoples, executive director of the Guaranteed Income Validation Effort (GIVE).
Over the next year, the program will give a supplemental $500 a month to 125 Gary residents. No strings attached.
“This little, small part that I'm doing is just kind of give people the finances to go and start spending money everywhere to try to help us all, you know, build the city back up,” said Burgess.
Mayors for a Guaranteed Income, a group of 44 mayors committed to tackling economic inequality, provided Gary with the $500,000 in seed money it needed to get started.
It’s now one of eight pilot programs that have been launched around the country, including Stockton, CA; Saint Paul, MN; Richmond, VA; Compton, CA; Hudson, NY; Chelsea, MA; Gary, IN and Paterson, NJ.
Another 10 areas have been publicly announced, including San Diego, CA; Oakland, CA; Cambridge, MA; Los Angeles, CA; Columbia, SC; Long Beach, CA; Pittsburgh, PA; Tacoma, WA; Gainesville, FL and Durham, NC.
The only eligibility requirements to participate were that you be 18 years of age, a resident of the city, and not make more than $35,000 a year.
More than 4,000 people applied to the Gary program. The recipients were selected at random.
“The initial reaction is, 'Is this for real?'” said Peoples.
Peoples called each person selected to break the news.
“Your name was selected as being one of the recipients of $500 for 12 months,” she said to a caller.
“Oh wow! Really? Thank you so much!!” responded the caller.
Tammy Bourne Townsend, a mother of two and grandmother to seven, nearly missed her call, but when it came through, she was ecstatic.
“I was like hollering and screaming and just overcome with the fact that I can see the light. I can see my goals coming closer,” said Townsend.
One of her goals is to put that extra income toward buying a new home for her family.
“I'm a working woman. OK, I don't mind working, but this is an opportunity for me to get ahead,” she said.
Gary is seeing some positive economic indicators. New businesses are moving in, development is starting up, and for some, like restaurant owner Kendall McMiller, they believe the guaranteed income will help.
“I think it will, because the funds that they get, they’ll be able to spend in the community, which brings the community back,” said McMiller, who moved his restaurant D&K Salads from Illinois to Gary last year.
For now, Peoples gets to be a kind of fairy godmother, providing seed money for the most basic of dreams.
“One mother, and it always gets me she has four children, and they have one bed. And so, she said her first check that she receives she's going to buy beds for her and her kids, and that gets me every time,” said Peoples.
Gary hopes their program will mirror Stockton’s success in alleviating financial insecurity, doubling full-time employment, and enhancing mental well-being.