Why free money makes you more likely to get a job

Guaranteed basic income is an anti-poverty policy gaining traction in Washington cities. Tacoma recently started its second basic-income pilot, on the heels of a separate King County experiment.

KUOW’s economy podcast, "Booming," sat down with Natalie Foster, the architect of more than 130 basic-income pilots across the United States to understand surprising findings from King County’s basic-income experiment, and what it means for the policy more broadly.

S

tephanie Bartella felt like she couldn’t win.

She’d worked up the courage to leave what she described as an unsafe marriage with her four kids. Then she moved from Texas to Tacoma, Washington, to be closer to her parents. She earned her bachelor’s degree, got a job at Pierce College, and made a financial plan for her family. But after all of that, she still had to put the utility bill on her credit card.

“It felt really defeating,” she said.

RELATED: Do basic income programs cause people to work less? Ask Alaska

Bartella was considering getting a second job when her luck turned around. She found out she was selected for Tacoma’s first guaranteed basic-income pilot. She would receive $500 a month for a year through Growing Resilience in Tacoma (GRIT).

“It felt like winning the lottery, really,” Bartella said.

Bartella and the rest of the first GRIT cohort received 13 monthly payments starting in December 2021. The program was designed to demonstrate the effect that small, temporary cash payments without strings attached can have on the financial stability of participants long-term. The Washington state Legislature funded a second version in Tacoma to expand the participant pool and study the feasibility of a basic-income program long-term. This month, GRIT 2.0 began sending out cash payments to the new cohort.

Bartella used the money to pay off overdue bills, get braces for her son, and remove a rotting tree that had been looming in her front yard. And she says that having the freedom to focus on the job she had helped her land a promotion.

“I was able to relax, look at what I already had, and see what were the opportunities around me,” she said.

RELATED: A year of GRIT in Tacoma

Although she’s no longer receiving the payments, Bartella says basic income had a lasting impact on her financial health. Thanks to that promotion, she can afford her bills now.

Bartella’s experience is typical for participants in basic-income pilots. Although the findings from the first GRIT program won’t be published until this summer, an earlier pilot in nearby King County shows Bartella’s story isn’t unusual.

Participants in who received $500 a month through the King County pilot were much more likely to have a job by the end of it. Employment increased from 37% to 66%, and participants ended the program with higher wages and better benefits.

To understand why free money would make people more likely to work, the Booming team sat down with Natalie Foster, author of "The Guarantee: Inside the Fight for America’s Next Economy." Listen below to hear Foster explain the surprising multiplier effect of no-strings-attached cash.