California ‘basic income’ experiment fails to provide ‘financial independence,’ study finds

A California guaranteed income pilot program intended to lift families out of poverty failed to lead participants to long-term financial independence, according to a new study from researchers at the University of California, Davis.

The Yolo County Basic Income (YoBI) program provided “no-strings-attached” cash assistance to a highly targeted group of at-risk residents. While the payments served as a temporary lifeline, researchers found that for the “significant majority” of participants, the program was not enough to break the cycle of poverty.

“While [Basic Income] reduced some of the immediate urgency around money and allowed families some stability, most participants still had unmet financial needs,” the study reported.

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The Yolo County Basic Income (YOBI) is one of many local municipalities providing no-strings attached cash assistance in an attempt to alleviate poverty. (Photo illustration by Thomas Trutschel/Photothek via Getty Images)

The program differed from standard Universal Basic Income (UBI) by focusing exclusively on families with children under age six who were already enrolled in the state’s CalWORKs program and experiencing homelessness or housing instability.

Nolan Sullivan, the former interim director of Yolo County Health and Human Services, described the initiative in 2022 as a “super targeted basic income” (TBI).

“It’s not just like randomly distributing wealth amongst a group of people,” Sullivan said at the time. “We are laser-focused on one particular group… really trying to break the rule of generational poverty.”

Under the pilot, participants received monthly checks averaging $1,289 for a two-year period. The goal was to raise family income to 200% of the federal poverty level.

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A recent study showed that a California guaranteed income program did not lead to financial independence. (Christina House / Los Angeles Times via Getty Images)

The UC Davis findings, published in the International Journal of Environmental Research and Public Health, highlight a recurring theme in guaranteed income experiments: the “survival mode” trap.

Participants reported that while the cash helped cover predictable expenses and pay down debt, it did not provide a cushion for the “unexpected.” Researchers noted that car repairs, medical bills, or a sudden loss of employment quickly wiped out any progress made through the monthly stipends.

One participant told researchers that without the program, they would likely be “out there looking for places to sleep.” However, the study concludes that despite these “lived experience” successes in preventing homelessness, a clear path to total financial self-sufficiency remained elusive for most.

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The Yolo County Board of Supervisors began issuing payments in April 2022 to families stricken by poverty. Similar to many other guaranteed income programs, it started as a pilot and was studied by academics to measure its impact. (Getty )

Despite the lack of long-term financial independence cited in the Yolo County study, advocates continue to push for the expansion of such programs. Similar pilots have popped up across the country, with Cook County, Illinois, recently turning its pilot into the nation’s first permanent guaranteed income program.

Critics, however, argue that these programs create a “fiscal cliff,” where recipients struggle even harder once the temporary government funding expires.

Yolo County officials did not respond to Fox News Digital’s request for comment.

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