Yahoo Finance Baltimore gave young parents $1,000 a month. Participants used the money to pay bills and secure stable housing.
Baltimore gave low-income parents $1,000 a month for two years, no-strings-attached.
Participants reported higher housing security and incomes after the first year.
Over 100 basic income pilots have been tried in the US, but some lawmakers are fighting them.
For some Baltimore families, basic income helped pay the bills: rent, groceries, healthcare, childcare, and car payments. For others, it provided the support they needed to maintain stable jobs.
The Baltimore Young Families Success Fund, with research by research firm Abt Global, released its interim results in June for a guaranteed basic income pilot which began in August 2022 and is set to end this month. It gave 130 parents between the ages of 18 and 24 $1,000 cash each month to spend as they choose, with no strings attached.
After one year of receiving payments, participants were more likely to have housing, higher household income, and a degree than the pilot's control group. Still, some participants' overall financial well-being was not impacted in a statistically significant way.
Researchers primarily focused on participants' income, housing, employment, and education outcomes in the first year of the pilot. Through surveys and interviews, participants were compared to a randomly selected control group of 156 parents who met the criteria for the pilot but were not given basic income.
Like most other GBI pilot research, Baltimore's results are based on participants' self-reported experiences at the six-month and one-year points of the pilot. The pilot will continue to survey participants through February 2025.
Baltimore's basic income program joins over 100 similar pilots launched across the US — including some specifically focused on parents or families with young children. These pilots typically offer low-income Americans monthly payments for a set time period to spend on necessities. Economic security experts and local leaders continue to try the no-strings-attached cash model to combat poverty and income inequality despite continued conservative political opposition and legal challenges.
"We know that so many of Baltimore's young families simply need the opportunity to thrive, but often don't have the resources to help them make it happen," Baltimore Mayor Brandon Scott, who was a key player in launching the GBI pilot, said in a press statement.
However, not all policymakers agree that GBI is a sustainable approach to poverty reduction, and it is not yet clear how basic income will impact participants' long-term financial security.
Baltimore focused on young parents experiencing financial insecurity
Baltimore leaders focused on young parents because early adulthood is a key window for building financial stability, which can be difficult for individuals with young children, per the report.
Parents eligible for the pilot had incomes at or below 300% of the federal poverty level, which is $74,580 for a family of three, but most participants' incomes were below that. They also had to be full or partial caretakers for at least one child.
The pilot is a collaboration between the city, local foundations, community leaders, and the nonprofit Mayors for a Guaranteed Income — with funding coming from philanthropic donations and $4.8 million via the American Rescue Plan Act (ARPA).
The Baltimore Young Families Success Fund randomly assigned eligible applicants to the participant group or a control group.
Of the 153 selected pilot participants, 23 did not receive cash payments either because they declined them, could not be contacted, or did not fully meet the criteria. Additionally, most of the city's GBI participants were experiencing food or housing insecurity before receiving payments.
In fall 2023, BI talked to a Baltimore participant who said the pilot allowed her and her fiancé to move into a house. Tazhane Jordan had been living in her car with her toddler daughter and another baby on the way. She said the cash payments helped her family secure housing along with everyday expenses.
"People can always use resources for specific things, but sometimes, you know, you just need a little money for random things: gasoline, toilet paper, baby formula, things like that," Jordan said.
Baltimore participants reported higher housing security and household incomes
At the time of application, slightly more participants were in independent living situations than the control group — 52% compared to 45% — though this difference grew 13 percentage points after the first year. The "independent living situation" criteria mean participants weren't relying on friends or family for housing.
No participants were homeless after 12 months, compared to 5% of control group members. Researchers suggest basic income was likely responsible for the increased percentage of participants renting an apartment.
After a year of GBI, participants had a higher average household income of $23,608 a year, compared to $16,233 a year for the control group. Data shows participants either maintained their employment or saw a slight increase in labor force participation. More participants also reported applying to a trade school or college, and researchers noted that participants may have invested their cash payments in education instead of supplementing their income.
The researchers acknowledge participants remained "economically vulnerable" throughout the pilot, as their average household income remained below the federal poverty level and their unemployment rate was higher than similar Baltimore residents.
GBI pilots are facing political opposition, legal challenges
Basic income programs continue to face opposition in local and state legislatures. States like Iowa and Arizona have introduced GBI bans, as some Republican lawmakers call the programs "socialist," or worry cash payments could make low-income families too dependent on government assistance.
Several lawsuits have also been filed challenging the use of public money for basic income, alleging that it is "unconstitutional" in some states for cities to give residents direct cash. Texas Attorney General Ken Paxton halted a Houston-area GBI pilot in April, and a public money-related lawsuit filed by two St. Louis residents in June could cut funding for the city's program.
But some, like Scott, see the initial results from his city's pilot as promising. He said Baltimore parents are using the money to stabilize their families and build their careers.
"This program invests in their potential and allows them to pursue the needs and goals that they determined for their own families," Scott said. "All the evidence points to that being a game changer for them."
Have you benefited from a guaranteed basic income program? Are you open to sharing how you spent the money? If so, reach out to these reporters at allisonkelly@businessinsider.com and nsheidlower@businessinsider.com.
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