California Invests In Guaranteed Income: $35 Million Will Support Monthly Payments For Pregnant Women, Foster Youth

Guaranteed income is expanding state-wide in California after lawmakers on Thursday passed the nation’s first state-funded guaranteed income program. 

The $35 million program will go toward monthly payments to pregnant women and foster youth phasing out of the system, and it will be distributed to local organizations in cities that have committed to guaranteed income programs. The pilot, which is backed by Gov. Gavin Newsom, passed with bipartisan support in the state legislature. There won’t be any restrictions on how recipients spend the money.

Senator Nancy Skinner (D–Berkeley), who chairs the Senate Budget committee, said that the plan could help provide a crucial safety net. 

“If you’re in the foster system up to a certain age, you are provided for,” she said. “Then, when you transition out, basically you're kind of just left out on your own. And most of us have family support systems. Our foster youth do not.”

Santa Clara County and San Francisco are two Northern California cities with guaranteed income programs targeting foster youth and pregnant women, respectively. 

Senate Minority Leader Scott Wilk (R–Santa Clarita) said that he supported the bill because of his legislative history with foster youth in his Los Angeles district and his desire to see better outcomes for them. 

“One out of three foster youth in LA County resides in my district,” he said. “I believe we should be doing all we can to lift these young people up.” 

What is guaranteed income, and what’s its history in California?

Guaranteed income is different from universal basic income (UBI), the main solution to address economic inequity that 2020 Presidential candidate Andrew Yang proposed during his campaign. While guaranteed income provides monthly payments targeted at people who meet specific criteria — often those who fall into the low-income bracket — UBI is a monthly lump sum for all citizens. 

California has led the nation in experimenting with guaranteed income across a wider audience than pregnant women and foster youth. In 2019, then-Stockton mayor Michael Tubbs launched the Stockton Economic Empowerment Demonstration, or SEED, which was the nation’s first mayor-led guaranteed income program. For two years, 125 randomly selected low-income Stockton residents were given $500 each month, no strings attached and no questions asked. 

Tubbs, now an advisor to Gov. Newsom, compared the payments to the stimulus checks provided during the pandemic, which he said allowed people to do things necessary during the public health crisis like pay their debts and continue working.

“No one stopped working,” he said. “No one stopped being productive. No one to give up on trying anything. People put that money to work. They use that as an investment. They use that as a springboard to opportunity.” 

He said the state funding will help city governments look at the most promising approaches to deal with the issue of poverty. 

Two years after Stockton launched its program, there are now guaranteed programs throughout the state, with city mayors across California committed to the Mayors for a Guaranteed Income, a coalition Tubbs started. 

Saadia McConville, a spokesperson for the organization, said in an email that the state funding was a major leap in the movement to provide an income floor for people who need it. 

“We applaud Governor Newsom and the legislature for leading the way nationally and recognizing that cash is a powerful tool in what should be everyone's shared goals of ending poverty, combating income inequality and building economic stability,” McConville wrote.

Guaranteed income has more benefits beyond monetary support

An analysis of the results of Stockton’s SEED program after its first year found that recipients experienced less income volatility, more mental stability and were able to find full-time employment.

SEED participant Tomas Vargas Jr. credits the program for helping him secure his current full-time position as an administrator for San Joaquin nonprofit Fathers and Families. 

“Before, I was getting side hustles, looking for cars to work on, helping my neighbors out, just for a couple extra dollars,” he said. 

He said the money is so important because it’s given no-questions-asked and provides reassurance — it was there every month. Vargas said that allowed him to make different choices than he would have without that security net. 

“It helps out with not just your income, but your mental state and my stress levels and stuff like that,” he said, adding that it gave him the space and time to bond more with his kids and wife.

It’s that broad safety net and personal agency that Tubbs said is a crucial component of guaranteed income’s ability to address economic insecurity, especially for people who make too much to qualify for existing social security programs but are still making too little to “live with dignity.”

“It’s saying that we actually trust you with the flexibility and the dignity that comes with being able to make decisions about how to use money for yourself, for your family,” Tubbs said. “A guaranteed income also helps folks who may be disabled and for caregivers, for poor people at home child-rearing and caretaking for their relatives.”

Vargas said he hopes the data from this pilot will help the program become universal.

“The data that we collect from all these programs that they are starting,” Vargas said, “[I hope] they get enough data to where it changes the government’s mind about what the outlook is on universal income and how it helps out in many, many different ways.” 

The programs that receive the money would be able to decide the amount of money recipients get per month, likely within the $500 to $1,000 range, which falls within the norm for current guaranteed income programs in California.