The first data from an experiment in a California city where needy people get $500 a month from the government shows they spend most of it on things such as food, clothing and utility bills. Associated Press reports:
The 18-month, privately funded program started in February and involves 125 people in Stockton…. But critics say the experiment likely won’t provide useful information from a social science perspective given its limited size and duration. Matt Zwolinski, director of the Center for Ethics, Economics and Public Policy at the University of San Diego, said people aren’t likely to change their behavior if they know the money they are getting will stop after a year and a half. That’s one reason why he says the experiment is “really more about story telling than it is about social science.” Plus, he said previous studies have shown people don’t spend the money on frivolous things. “What you get out of a program like this is some fairly compelling anecdotes from people,” he said. “That makes for good public relations if you are trying to drum up interest in a basic income program, but it doesn’t really tell you much about what a basic income program would do if implemented on a long-term and large-scale basis.”
The researchers overseeing the program, Stacia Martin-West at the University of Tennessee and Amy Castro Baker at the University of Pennsylvania, said their goal is not to see if people change their behavior, but to measure how the money impacts their physical and mental health. That data will be released later….
Since February, when the program began, people receiving the money have on average spent nearly 40% of it on food. About 24% went to sales and merchandise, which include places like Walmart and discount dollar stores that also sell groceries. Just over 11% went to utility bills, while more than 9% went to auto repairs and fuel. The rest of the money went to services, medical expenses, insurance, self-care and recreation, transportation, education and donations…. “People are using the money in ways that give them dignity or that gives their kids dignity,” Castro-Baker said, noting participants have reported spending the money to send their children to prom, pay for dental work and buy birthday cakes.