Shah Foundation helps run a guaranteed income pilot program on MA

Yahoo Finance’s Alexis Christoforous and Jill Shah, Shah Foundation President, discuss the foundation’s involvement in a Massachusetts guaranteed income pilot program.

Video Transcript

ALEXIS CHRISTOFOROUS: With the COVID-19 pandemic driving up unemployment and job insecurity, some have renewed their calls for a nationwide universal basic income. It's certainly not a new concept. And if you remember during the Democratic presidential primary race, candidate Andrew Yang proposed sending $1,000 each month to every US citizen 18 years and older.

Joining me now is Jill Shah. She is President of the Shaw Family Foundation, which is currently supporting a universal basic income pilot program in Chelsea, Massachusetts. Jill, it's good to have you here. I know this program in Chelsea is still relatively new. You got some payments of $200 to $400 out to-- to folks there, about 2,000 participants. What has the early data told you so far?

JILL SHAH: Yeah, that's correct. Alexis, thank you very much for having me with you today. So yes, the Chelsea program is being run for 2,000 individuals or their households. There were 3,000 applicants for the program, and so these 2,000 were chosen by lottery. We're actually looking at how both of those groups are faring as we're moving, hopefully, out of this crisis.

And the early data that we have so far that's actually been completed, all being done by Jeff-- Jeff Liebman out of the Harvard Kennedy School-- Jeff is an economist who served for both President Clinton and President Obama-- is showing us that people are in really dire straits. So the early surveys let us look at how people were faring. And the city of Chelsea, as you may know, was probably one of the hardest-hit cities in America. Many of the people there work for very low wages, work in hotels and restaurants and other places that were shut down at the beginning of the pandemic.

They also live in multigenerational households, and so often living in tight quarters. And this resulted in a lot of COVID cases in the city of Chelsea, in addition to a lot of the income that comes into Chelsea just completely going away. And so there were long lines every day around every corner as people stood in line to wait for food. And this guaranteed income program was partially put in place to try to remedy that.

ALEXIS CHRISTOFOROUS: I know that you work as a public-private partnership there at the Shaw Foundation. Tell us about the money, where you're getting it from for this particular pilot program.

JILL SHAH: Sure. So like I said, there's about 2,000 participants, and they're getting, on average, $400 a month. The program started in November and will run through the fall. And so that-- the money is coming from three different sources-- city funding, state funding, and philanthropic funding. And so we, along with the United Way and Mass General Hospital as well as a number of very generous individuals, are funding the guaranteed income program.

ALEXIS CHRISTOFOROUS: You know, Jill, you've heard the criticisms of UBI before, among them they say that besides being very costly, this would actually decentivize people to go out and work. I know, again, this-- this pilot program is quite early on. Are you seeing that bear out? And what would you say to those folks?

JILL SHAH: Yeah, I mean, so I've looked at a lot of the data about guaranteed income programs, and that data does not play out. In different cases where guaranteed income programs have been run around the country and around the world, that is, in fact, not a result, that people very much use guaranteed income as-- as a much needed benefit to kind of stabilize their household, but that they are very much still looking for work.

In our early data-- so we have about three months of data now that is showing that people are looking for a job, have gotten their job back, or are looking for more hours. And that would be-- it's over 80% of the folks who are participating in the survey-- surveys are answering that way. I really-- all of the data past shows that that's not the case. And I think that's-- that will be true in the case of Chelsea's pilot as well.

ALEXIS CHRISTOFOROUS: Do you think a case can be made for guaranteed income post-pandemic?

JILL SHAH: I do. I mean, one of the things that I like about guaranteed income is that the structure is very simple. You give cash to individuals, and you trust them to do what they need to do with it in order to sustain themselves and their families, and maybe grow as well, right. There's a piece of this that is much more dignified than the way that we take care of our most vulnerable neighbors.

And-- and I think that's a really important thing to consider when we think about all of the other ways that we structure support for folks in our country. And so I hope that there are some broader learnings that come out of this that help us think about, you know, the restrictions that we put on other programs like SNAP and school meals that probably don't need to be there and we could get the same effect, or better effect, probably.

ALEXIS CHRISTOFOROUS: All right, Jill Shaw of the Shaw Foundation, thanks for being with us, and best of luck with the program.