Middletown mayor Ben Florsheim was observing a conflict resolution circle among a group of middle schoolers — a requirement after they’d gotten in trouble — when one student said something that’s stayed with him.
“Can you give my mom a raise?” the teen asked after Florsheim introduced himself as the city’s mayor.
Florsheim regretted he could not — the teen’s mother worked for a retail delivery company, not City Hall — but he was struck by the immediacy of the question. “It was literally the first thing on this kid’s mind,” Florsheim said.
“A huge part of why kids are struggling is because it’s their families who are struggling, too, and the people who are taking care of them outside of their families — their teachers, their social workers, et cetera,” he said. As the rising cost of living has exacerbated financial challenges for families and public service workers, Florsheim said, it’s become increasingly difficult “to be present in those roles.”
To address the problem, Florsheim supports a relatively simple solution known as “guaranteed income,” which has been gaining traction in Connecticut since the pandemic. It boils down to this: Just give people money.
Participants in guaranteed income programs receive regular cash payments, usually monthly, that they can spend on anything. There are no work requirements and no strings attached.
“At its most basic level, this is about giving people the thing they don’t have that will facilitate them being in a position to have more of it down the line,” said Mendi Blue Paca, president of Fairfield County’s Community Foundation.
Blue Paca’s remarks came at a recent summit in Hartford, hosted by the Community Foundation Opportunity Network, that brought together philanthropy and nonprofit leaders interested in direct cash assistance programs.
“People say money can’t buy happiness, and I think in principle we agree with that, right?” Blue Paca said, looking around the room. “But what it can buy is autonomy and choice and respite and all the things that we know contribute to happiness.”
The longest-running guaranteed income program, the privately funded Magnolia Mother’s Trust in Jackson, Miss., which gives Black mothers $1,000 a month for a year, has provided financial stability for hundreds of families. The city of Stockton, Calif., launched a two-year program in 2019 known as Stockton Economic Empowerment Demonstration (SEED), distributing $500 a month to 125 households. In 2020, entrepreneur and presidential candidate Andrew Yang made cash transfers a central component of his campaign.
Since then, over 100 pilot programs have tested the concept in communities across the United States. Most are supported by philanthropy, in an effort to prove the concept and seek public funding. A handful are funded by local governments, many of which tapped money from the COVID-era American Rescue Plan.
Many programs, while small in scale, have seen promising results. Participants in Stockton’s program, for example, reported improvements to their physical and mental health and increases in full-time employment. A broader study of nearly two dozen municipal programs found that recipients spent most of the cash they received on essential household expenses, such as food and housing.
But another study completed last year found mixed results. The Texas- and Illinois-based recipients spent the money they received on essentials, but researchers found that while households’ financial assets increased, they also took on more debt, “resulting in a near-zero effect on net worth.” The study also didn’t find marked health improvements, as were evident in some of the smaller-scale pilots.
In recent years, opposition to the concept has grown. Arkansas, South Dakota and Idaho outlawed guaranteed income programs. Lawmakers in Arizona, Iowa, Wisconsin, Illinois, Mississippi and West Virginia have also sought to ban them, saying they’re a waste of taxpayer money and could disincentivize work. And Texas Attorney General Ken Paxton sued last year to halt the launch of a guaranteed income program in Harris County, where Houston is located; that program is on hold while the case remains pending in court.
Still, advocates remain optimistic, citing one example in particular of a highly successful direct cash assistance program: In 2021, the expanded federal child tax credit — which took the form of monthly cash payments to families with children — slashed childhood poverty in the United States by nearly half.
Connecticut pilots
Connecticut became a proving ground for guaranteed income pilots during the pandemic.
The philanthropically funded 4-CT launched in 2020 in response to the COVID emergency, and it ran several programs during the pandemic that delivered cash aid to essential workers, undocumented families, small businesses and other households. 4-CT now administers guaranteed income pilots for individuals returning from incarceration and for victims of violence, and it’s aiming to launch another program this year. The nonprofit also partners with community-based organizations and health centers to distribute cash on debit cards to thousands of state residents.
The New York-based Bridge Project, which provides monthly cash assistance to new mothers, recently launched a program in Connecticut to support 500 households for roughly three years. The organization said program participants in other states saw rapid improvement in their mental health and were able to save money. (New York City recently allocated $1.5 million in public funding to support a new cohort of 161 pregnant people participating in the Bridge Project’s initiative there.)
Another national nonprofit, UpTogether, is supporting a guaranteed income pilot in Connecticut known as the “Changemaker Fund.” The program supports 120 community leaders in the cities of Bridgeport, Hartford and New Haven. The idea is to help these individuals — who are dealing with economic hardship — to direct more of their energy and effort toward community building and advocacy.
A pilot approved in Hartford in 2022 has yet to get off the ground.
But it’s clear “Connecticut has seen a growing appetite for exploring these types of opportunities,” especially in the last two years, said Cesar Aleman, director of the CT Urban Opportunity Collaborative, which administers the Changemaker program. “Now we’re at a point in Connecticut where you are seeing hundreds of families across the state getting multiple years of direct cash support.”
Over the next three years, Aleman said, direct cash assistance in Connecticut will total more than $13 million. Private philanthropy is providing funding for all of those programs.
That’s by design, said Sarah Blanton, CEO of 4-CT. “We have to start with philanthropy. Philanthropy has to be on the cutting edge, to innovate, to push to see and show what is possible,” she said.
If Connecticut’s various pilot programs can prove the concept, that could drive public funds toward a broader provision of guaranteed income. “There are more resources available on the public side than the private side, and I think that symbolically it is an important statement for our leaders to make,” Blanton said. “But it takes time.”
Middletown’s Florsheim — who had joined the national group Mayors for a Guaranteed Income — said he believes guaranteed income should be publicly funded. “The government should have a role in helping to give everybody a little bit of a leg up,” he said. But not all Connecticut towns and cities have the resources to make it happen, he added.
As a member of the 119K Commission, a group of mayors and other leaders developing strategies to engage the state’s “disconnected youth,” Florsheim said he’s urging the group to consider pairing direct cash with its other solutions. He’d like to see guaranteed income made available to three populations, he said, namely: “young people, the parents of young people who are struggling, and then the people who work with young people — teachers, social workers — many of whom are in this very same, very precarious, economically-insecure-but-working-full-time situation.”
Florsheim said he thinks giving people cash and improving their economic stability might save taxpayers money in the long run.
“You’re going to have less people on benefits. You’re going to have less people falling into situations where they’re winding up incarcerated. There are a lot of ways in which it helps with the overall social health and also the fiscal health of a community,” he said. “You’re able to be engaged in the economy. You’re able to graduate from high school and from college. There are just a lot of ways that it opens up doors for people to be doing better economically.”
‘A compounding effect’
Participants in Connecticut’s pilot programs describe the sense of relief the extra cash has afforded them.
Myra Smith, who’s currently receiving support through the Changemaker program, said the additional cash helped her to pay off debt on her utility bills and get her college-aged kids the books and materials they needed for school. Smith said she’d thought she might have to find part-time work on top of her job at the nonprofit Christian Community Action in New Haven, but the cash allowed her to focus on supporting her family.
Crucially, it also allowed her to set money aside in a savings account. Now, she said, if there’s an emergency, “We’re not freaking out.”
“Most people can’t climb out of an emergency because they don’t have the savings to do so. When they can’t do that, it sets them back,” Smith said. “If mom has an emergency and the only way she can take care of it is to dip into the food budget, or not pay the rent, that has a domino effect on that family. Some people never recover from that.”
4-CT’s Blanton said one of the reasons guaranteed income programs have worked is because the funds are unconditional and unrestricted.
“There are a lot of programs that provide really narrow support for narrowly defined needs, but these programs are flexible, and they trust people to know what’s best for their own lives,” she said. “The process, and the implied trust in giving someone the autonomy and the dignity to make their own decisions, has sort of a compounding effect.”
Abraham Santiago participated in the first cohort of 4-CT’s guaranteed income program, Elm City Reentry, for individuals returning from incarceration. “It allowed me the space to do all of these things that you would normally not have the space to do when you first come home,” he said. “It allowed me to reestablish family connections, because I wasn’t so stressed about money.”
The $500 monthly payments began when he got out, in August 2022, and continued for a year. During that time, Santiago started a job as a health care technician and launched a T-shirt design business with his son, who is now in his 20s. He said the experience helped them bond after being apart for so long.
Santiago, who is 55, is also involved closely with several community advocacy efforts. Lately, he’s been urging members of the state’s Social Equity Council — which reinvests tax revenue from the sale of cannabis products — to consider funding guaranteed income programs in neighborhoods that were most impacted by failed U.S. drug policy.
“We have an opportunity, with this money, to really target communities that have been historically destroyed,” he said.
Aleman, of CT Urban Opportunity Collaborative, said direct cash programs have the additional benefit of enhancing community building and advocacy — in part because the recipients often give back, but also because they have more time to do so.
The Changemaker Fund was designed to encourage precisely this outcome, Aleman said.
“One way to create the change that we want to see is to support those who are leading the work, who are also experiencing acute hardship,” he said. “In doing so, we’re both contributing to their immediate well being, while building and fostering the sense of community that they have been working towards — and propelling them to continue to be civically engaged.”
Who could benefit from direct cash in CT?
Over half a million, or roughly 40%, of Connecticut households don’t earn enough income to cover basic needs like housing, food, medical care, utilities and transportation, the United Way has reported.
The vast majority of those households include working adults, many of whom are also primary caregivers for children or elderly family members. United Way refers to this population as ALICE, or “asset limited, income constrained, employed,” families.
“They’re working at the jobs that are open to them,” such as in food service and retail, or as personal care aids or delivery drivers, said Lisa Tepper Bates, president of United Way of Connecticut. “A lot of those jobs tend not to pay wages consistent with the increased cost of living.”
Tepper Bates acknowledged that state lawmakers have discussed efforts to lower the cost of living for Connecticut residents, but she said it’s a difficult thing to do. Increasing the stock of “deeply affordable housing” could have a widespread positive impact, she said, but bringing down the price of other essentials isn’t always within lawmakers’ control.
“What they can do is help to put more money into the pockets of people who are paying these bills,” Tepper Bates said. To that end, the United Way will be advocating during this year’s General Assembly session for the creation of a permanent child tax credit.
To afford to live in Connecticut, Tepper Bates said, a single adult working full-time needed to earn $18 an hour in 2022, the most recent data available for United Way’s analysis. For a family of four with two adults and two young children, in order to make ends meet, combined income needed to reach roughly $57 an hour that year. The cost of living has only gone up since then.
“The fact that wages have not kept up with the cost of living is at the core of so many of the tensions in our nation right now,” Tepper Bates said.
As of this January, Connecticut’s minimum hourly wage for non-tipped workers was $16.35. (For workers who earn tips, the minimum wage remains $6.38 for hotel and wait staff and $8.23 for bartenders — though if tips don’t bring those workers’ wages up to the minimum rate, employers must make up the difference.)
Tepper Bates, like Middletown’s Mayor Florsheim, thinks that making cash available up front to families could lead, in the long run, to fewer households relying on emergency safety net programs.
“If people have it in their own wallet — the resources they need to pay their bills, to provide for their families — then,” she said, “we may not hear from them looking for emergency food assistance, looking for more emergency rental support.”
As 4-CT’s Blanton put it, “It’s really profoundly simple to just trust people to make their own choices.”