A new California bill is proposing that young adults aging out of the foster youth system receive $1,000 no-strings-attached monthly checks from the state, providing stability to residents at high risk of homelessness and unemployment.
Authored by state Sen. Dave Cortese (D-San Jose), SB 739, if approved, would pilot a statewide universal basic income (UBI) program providing $1,000 per month to residents exiting the foster care system at age 21. The program would last for three years, and is intended to be a stop-gap measure for people who age out of foster care and lose social support services.
The program is hardly universal -- about 3,000 people a year would be eligible -- but it follows the same framework of UBI pilots that have gained traction across the country in recent years. The monthly checks can be spent however recipients see fit, and are intended to provide a reliable cash cushion for those who would otherwise be facing financial instability.
The bill targets former foster youth because the social services that they depended on for years are abruptly cut off at age 21. Many are unable to quickly gain financial independence and face serious problems along the way. Former foster youth are less likely to have stable housing, more likely to face significant mental and physical health problems, and are less likely to pursue higher education.
"During a time of such uncertainty, unconditional basic income will provide stability to our foster youth transitioning out of foster care and into adulthood," Cortese said in a statement.
The bill closely mirrors a similar basic income pilot program in Santa Clara County, which was spearheaded by Cortese in his previous role as county supervisor. The county has been sending $1,000 checks to 72 former foster youth since last year, and has spent $339,000 so far.
The age of the recipients in Santa Clara County differs slightly from the proposed statewide bill, where former foster youth ages 21 to 24 can qualify, with older residents given priority.
Though the county pilot is ongoing and its effectiveness has yet to be studied, participation is skewed towards women, families with children and those reliant on food stamps. The checks may also be providing badly needed help during the coronavirus pandemic, as 29% of the recipients have lost their job due to COVID-19 and 17% have lost work hours, according to county staff.
The newly introduced state legislation comes just weeks ahead of a report showing promising results from a UBI program in Stockton. In that pilot, 125 randomly selected low and middle-income residents received $500 each month for two years, with a team of independent researchers taking a close look at the impact.
The preliminary report from the Stockton experiment, released last week, found numerous improvements in the lives of the participants. The $500 checks softened "income volatility," or significant month-to-month changes in income, and participants were more likely to find work. In one year, the number of recipients with full-time employment increased from 28% to 40%. The group was also healthier, showing less depression and anxiety by the end of the pilot.
Other outcomes were more subjective. Some residents in the Stockton program reported they were more willing to set goals for themselves and take risks, and felt like they had more agency in their life choices. The $500 checks meant less dependence on others, the report found, and less of a need to ask for money from friends and family.
It's unclear how much SB 739 would cost the state. Santa Clara County's program is expected to cost about $900,000 for a cohort of 72 young adults, meaning the state program would likely cost tens of millions of dollars. County officials have sought to offset the costs with private funding, and have raised $95,000 so far -- less than one-third of the costs to date.
Santa Clara County is expected to study the benefits of the local foster youth UBI program in the summer, the results of which could feed the effort for a statewide expansion. County staff are looking into whether the extra $1,000 per month is leading to increased financial stability, improved health and a rosier outlook among the participants, and whether the money shielded residents from the economic turmoil caused by COVID-19.