The city of Los Angeles recently wrapped up its first cash assistance program: Big: Leap. It provided $1,000 a month to 3,200 low-income families for a year, no strings attached.
It modeled itself after other guaranteed income pilot programs — sometimes called Universal Basic Income, or UBI — in cities like Stockton (one of the first in the nation to do it), Oakland and San Francisco. The idea of UBI is to provide extra income without any kind of work requirement or other conditions to, ideally, improve people’s lives.
City Councilmember Curren Price spearheaded the effort in L.A. He first proposed a $6 million initiative just for his district, Council District 9, but that eventually evolved into the much larger Big:Leap program that became available to people across the city.
“This program had a lot of appeal for me because I knew it could positively impact the individuals that I represent,” Price said, adding that his district is “... 80% Latino. It’s a poor working-class district and certainly it was impacted negatively by COVID."
He added that Big: Leap was “also an opportunity to see citywide how we can leverage resources in a different way to provide help to those in need.”
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Price’s district includes much of South L.A. and the west side of downtown, but the need is spread all over the city. As of 2020, there were more than 600,000 residents living in poverty, according to the U.S. Census Bureau.
How it worked
More than 50,000 people applied to L.A.’s Big: Leap program. To be eligible, people had to live in the city, have at least one dependent, have an annual income below the federal poverty line and show they experienced economic hardship because of the pandemic. The city’s research partner, the University of Pennsylvania's Center for Guaranteed Income Research (CGIR), later selected participants through a lottery.
Big: Leap ultimately distributed more than $38 million to participants and turned out to be one of the largest guaranteed income programs in the country. The initiative was paid for by the city’s general fund, including taxpayer dollars. About $11 million was diverted from the L.A. Police Department’s budget.
“I think if guaranteed income can work in L.A. it can work almost anywhere in the state and anywhere in the country because it has one of the most diverse populations in the country,” said Natalie Foster, president of the Economic Security Project, an organization that advocates for public programs that reduce income inequality.
“Studies have shown that people use the money to support their lives,” she said. “People use the money for groceries, they pay the electric bills, they put money away for education.”
The participants
To monitor how Big: Leap impacted participants' lives, LAist producers Marina Peña and Monica Bushman followed five individuals over the course of the year, checking in with them periodically.
Here’s what they learned about them:
Juan Sernas
Juan Sernas is a 56-year-old father of five children and grandparent of one from Oaxaca, Mexico. He’s lived in L.A. for the past 36 years. When the pandemic hit, Sernas was initially laid off from his job at a dry cleaner, and then was brought back for fewer hours per week. He went from working six days a week to just one or two days. Sernas is undocumented so he didn’t receive any cash assistance from the federal government during this time. His family’s debt started to pile up.
He heard about the city’s income program from television and his son helped him apply.
How the extra income helped: Sernas said the monthly payments from Big: Leap helped pay their family’s rent in Mid-City and buy food and clothing for his children. His wife Amalia Mendez also used part of the extra income to support a side business she started during the pandemic to make ends meet: Jaili Bakery. She was able to buy appliances like a second oven and a professional mixer.
“With the extra help, we were able to support my wife’s business and buy what she needed for her pastries. I was able to help her with the deliveries,” Sernas said. “The money wasn’t useful just for one thing, it was used in a lot of ways. I was also able to spend more time with my children. It’s a pity the program ended.”
The downside is that Sernas was not able to save too much for the future without Big: Leap. Most of it went to living expenses and the bakery. But Juan is back to working 20 to 30 hours per week and Amalia’s pastries and pan dulce are selling well.
Ashley Davis
Ashley Davis is a 35-year-old single mom to a 7-year-old son. When the pandemic hit, she was making money doing different types of gig work and freelance hairstyling while also juggling her son’s occupational, physical and speech therapy appointments.
Things got harder during the pandemic. Her son’s therapy appointments were put on hold and he was at home, attending kindergarten remotely. Davis said she didn’t really have anyone else to rely on even though her family is nearby. She said she feels “weird” asking family for help.
“I'm the one everybody calls for help,” she said. "Even if they had the time, I didn't want to take advantage."
How the extra income helped: Over the last year, Davis spent the funds on things like car registration, insurance and repairs, training to become a hair colorist, clothes for her son, and a day at Legoland for his sixth birthday.
"It was a bit of a peace of mind, having that,” Davis said. “It allowed me to kind of take care of some stuff that would have been much harder for me to take care of, or get ahead of."
Elvira Ramirez
Elvira Ramirez is a single mom from Tehuacán, Mexico. She’s also undocumented and said Big: Leap was the only cash assistance program for which she was qualified.
Ramirez also shared that she separated from her partner during the pandemic, which impacted her finances. Without his income to rely on, she started accumulating a lot of credit card debt to pay for basic necessities. She cleans homes for a living, but she said her shifts aren’t stable.
How the extra income helped: Once Ramirez started receiving the monthly payments from Big: Leap she said she was able to use the money to pay for her rent, bills and some of her 14-year-old son’s school expenses.
Over the course of the guaranteed income program, Ramirez said she made two important changes in her life:
“The program offered some financial relief, so I was able to spend more time with my son,” she said. “I also started learning how to budget my monthly expenses and find ways to make ends meet.”
Alfoncina Hernandez
Alfoncina Hernandez is a mom of four children from Oaxaca, Mexico. She first heard of Big: Leap on Univision when she was looking for cash assistance during the pandemic. Hernandez is also undocumented so she didn’t qualify for a lot of government help during the pandemic.
How the extra income helped: Thanks to the extra money she received from the programs, she recently started the immigration process for permanent residence.
Hernandez currently sells used clothing in South Central L.A. to support her family financially. But said Big: Leap was a big help for her family because, after the pandemic, people haven’t been buying as much clothing.
“There was a little more peace of mind in my household because we had a little more money for our expenses,” Hernandez said. “Gasoline and food were going up around this time, so it was a big help for many things.”
“I’m really happy that I was able to start immigration process,” Hernandez added. “Hopefully once I have my work permit, I’ll be able to find a more stable job.”
Celina Gonez
Celina Gonez is a 55-year-old mother of three and grandmother of four. She lost her job as an office assistant early on in the pandemic and was eventually able to find part-time work at a dollar store and then at a grocery store, stocking shelves, where she currently still works. Due to arthritis and other health issues, she can’t be on her feet for a full day, so she works five-and-a-half hour shifts. And while she was at one point working three days a week, her hours were reduced to two days a week last year.
Gonez receives housing assistance in the form of an emergency housing voucher (EHV) administered through the city of L.A.’s housing authority, and said without it she wouldn’t be able to afford to live in the city.
How the extra income helped: The Big: Leap funds she's received have gone to pay for things like car repairs, vet visits (one emergency) for her senior dog Sancho, and to help with moving costs for her daughter.
Now that the program is over, Gonez is worried about making ends meet but, she said, she’s come to terms with it. “I was blessed and not a lot of people had this opportunity,” she said. “I just need to focus on being thankful and tell myself that it's ended and that I'll be okay.”
What’s next?
Over the next year, researchers at the University of Pennsylvania, the city’s partner in this pilot program, are putting together a report on what Big: Leap achieved — and didn’t. It will analyze how the lives of the people who received the cash assistance were impacted and compare that to applicants who didn’t make the cut.
Throughout the process, both the participant group and the control group completed surveys every six months to measure various aspects of their wellbeing, including mental health, food and housing security, employment, homelessness, parenting and family dynamics. The goal of the research is to help inform the debate over universal basic income with data based on real world experiences.
“We hope to document the success in a way that will provide resources or at least provide an impetus to continue this program,” said L.A. Councilman Curren Price. “Moving forward, we want to see if we can identify some additional funding.”
He said there’s been some discussion about a smaller guaranteed income program, one that perhaps focuses on pregnant women or women with children as a target audience. “There's lots of information to mull over, but I think there's a willingness now to move forward with programs like this,” Price said.
The existing research out there points to a lot of success with UBI programs in different cities but they’ve also been criticized. The concerns are mainly about who is chosen to participate in these programs, whether they will spend the money on the “right” things and what will happen when the money stops.
As for other guaranteed income programs in the L.A. area, the county recently launched its own pilot called Breathe, which will provide 1,000 county residents with $1,000 a month for three years. Additionally, another county program that was launched last October is providing 300 young adults, ages 18-24, with $1,000 monthly payments for three years.
“There are many guaranteed income programs in L.A. and the country is watching what is happening,” said Economic Security Project’s Natalie Foster. “I believe what happens in L.A. will ultimately influence the direction that policy heads.”
If people reading this are interested in seeing more of these guaranteed income programs in California, Foster said to contact your state senator, your state assemblymember or even your mayor and ask them to support such efforts.
