CHELSEA, DRAWING on state, municipal, and philanthropic funding, gave nearly 2,213 families $400 a month via cash cards for eight months under a program dubbed Chelsea Eats.
United South End Settlements, using only private funds, is in the midst of an 18-month program called STEP, or Striving Toward Economic Prosperity, that gives $800 monthly checks to 16 families led by single mothers.
In Chelsea, Harvard researchers tracked where the cash cards were used and found that most of the money was spent at food and big box stores. The STEP program doesn’t track where participants spend the money, instead focusing on the impact of that spending on each family.
The Codcast took a deep dive into the two programs, trying to determine whether guaranteed income programs are worth pursuing long-term or whether they are just a COVID flash in the pan.
Jeffrey Liebman, an economist and the director of the Rappaport Institute for Greater Boston at Harvard’s Kennedy School, led a research team that examined the Chelsea Eats program. The team’s report concludes the program satisfactorily answered the primary concerns associated with guaranteed income programs.
“The two things people worry about in these kind of programs is can we trust people to spend the money well, and I think the answer to that is yes,” Liebman said. “And then secondly, are they all going to stop working when you give them money, and our study also shows that doesn’t happen. So on both of those critiques, at least at the scale of $400 a month in this community, the fears were not realized.”
Melody Valdes, chief of staff at United South End Settlements, said the money helped participating families reduce debt, plan for the future, and improve the well-being of their children.
“We’re seeing profound changes. Obviously, our impact is on a smaller scale, but we are seeing profound changes,” she said.
Neither Liebman nor Valdes are under any illusion their programs can significantly reduce poverty. That, they say, would require major, long-term federal funding. But they say the Chelsea Eats and STEP programs offer important insights on the value of putting money directly in the hands of poor people rather than running it through a government program with bureaucratic red tape.
“The nice thing about giving people unrestricted funds is you don’t have to guess what they need,” Liebman said. “It’s hard if you’re sitting in City Hall – do you need a housing program, do you need a program to give out food? Should you be subsidizing diapers? What should you be doing? Well, if you have people in need and give them unrestricted funds, they can figure it out for themselves. In this case, as you said, people mostly spent the Chelsea Eats cards at places you can get food, like grocery stores, or wholesale clubs, or local meat and produce markets.”
Valdes concurs. “Giving people money, trusting that they know what to do with those funds, and kind of replacing the overhead and administrative costs of running the programs that historically have been run and putting the money in the hands of the people that need it most, feels like it’s the beginning of a change,” she said.
Liebman said Chelsea officials discovered giving residents money to buy their own food was a better use of resources than gathering, boxing, and distributing one-size-fits-all packages of food. They also said letting residents buy their own food allowed them to purchase what they like and need, sidestepping allergy and medical concerns.
Valdes said the mere act of making individual choices is also important. “When you’re in poverty, you’re not able to make a lot of choices because you don’t have the resources to make those choices. If I only have $200 and I know I have to pay rent and buy food, I don’t have a way of saying what am I going to do with that money,” she said. “It’s saying we trust that you’re able to do this whereas other programs that exist are not getting at that.”
Liebman said similar guaranteed income programs could potentially work with other target groups. He specifically mentioned children aging out of foster care, who often have difficulty making the transition to on-their-own adulthood.
Liebman acknowledged the limitations of the Chelsea Eats program, but insisted its impact was profound.
“At the beginning of the Chelsea Eats program, the level of food insecurity in this community was just horrific,” he said. “More than 50 percent of the families said their kids were sometimes or often not getting enough to eat because the families didn’t have enough money to pay for food. It seems to me that making progress by having people actually get enough to eat is pretty profound, but you’re right, this was a temporary program and people’s needs were greater than what they got from the program. It would take more money for a longer time to end poverty in that group.”