Bloomberg Businessweek

A Radical Experiment In Financial Vaccination

In the summer of 2017, Tomas Vargas Jr. had a wife and two young children at home in Stockton, Calif., and a teenage son he hadn’t seen in a decade. He had a $31,000-a-year position at UPS, side jobs repairing cars and carrying groceries, friends killed by gunfire, and night terrors. He was 33 years old. “In the morning, I would look dead in the mirror and tell myself, ‘I know you hate it. I know you don’t want to keep going. But what gives you the right to just be a piece of shit like that?’ And after I looked at myself deeply in my eyes, I’d sit there and tell myself, ‘Wash your face and get started and try.’ ”

One day that autumn, Vargas heard Michael Tubbs, the new mayor of Stockton, on television talking about giving away cash to his constituents, nearly a quarter of whom live below the poverty line. Vargas just laughed. Another year of work and dread followed. Then a postcard arrived in the mail, one of 4,200 sent to randomly selected residents of neighborhoods with a median annual income below the city’s figure of $46,000. It included a request to complete an online survey of 100 questions covering such things as stress levels and the use of check-cashing services. Vargas answered them all. In January 2019 he was informed that he was one of about 125 people randomly chosen to receive a guaranteed income of $500 a month for 18 months. He’d be part of the Stockton Economic Empowerment Demonstration.

Vargas figured it had to be a con. But he went down to the SEED office near city hall, where Sukhi Samra, the program’s director, assured him it wasn’t. He would receive the money on a SEED debit card and could spend it however he chose. Researchers would record everyone’s anonymized expenditures, which would then be published on the program’s website for anyone to see. A control group of 200 people were also being studied, receiving small payments in exchange for answering questions about their financial

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