By Danielle DuClos
When Vanessa Munsey applied for the state’s first guaranteed income program almost three years ago, she was living out of her car with her infant and three-year-old son.
The program, known as the Madison Forward Fund, offered participants like Munsey $500 a month over a year that they could spend on anything.
Around the same time Munsey was approved for the guaranteed income program, she had applied for a job as a legal assistant at a Madison law firm, she said. But she didn’t have a college degree.
Using payments from the Madison Forward Fund, Munsey was able to afford paralegal classes while working at the law firm, though.
“Being in school and being an active student is a really huge part of why I got this job,” she said.
Almost two years after Munsey received her last $500 payment, she is in stable housing and about to graduate with a paralegal degree. Her kids also participate in extracurriculars like ballet and jiu-jitsu classes, she recently told a packed room at the Black Business Hub for an event about the guaranteed income program.
“The (Madison Forward) Fund gave me a fighting chance to be successful and really changed the course of my life and the quality of life that my kids get to have now,” she said.
The Madison Forward Fund marked Wisconsin’s first guaranteed income program with $930,000 in funding solely provided by private donors. Kick-started by Madison Mayor Satya Rhodes-Conway, the program was a partnership between multiple groups including the city, the University of Pennsylvania’s Center for Guaranteed Income Research and the University of Wisconsin-Madison’s Institute for Research on Poverty.
Now, the success of the Madison Forward Fund is leading the Foundation for Black Women’s Wellness to run a second iteration of the program, according to Michelle Robinson, the organization’s chief programs and partnerships officer.
“We also know that guaranteed income is not just about money,” Robinson said at the Black Business Hub event April 8. “It’s about creating the conditions for healthy people and healthy communities. … It’s about what becomes possible when we stop punishing people for being poor or economically insecure and start investing in them as whole human beings.”
Known as the Madison Forward Fund 2.0, the program focuses on pregnant people and mothers with at least one child aged 3 or younger. It will serve 42 randomly selected families in Dane County who make 200% or less of the federal poverty line and have participated in one of the foundation’s Maternal Child Health Programs.
This continuation of the program started in March and will run through February next year, providing $500 a month along with wraparound financial coaching and maternal health services. The program’s funders include UW Health, Madison Gas and Electric, and the Evjue Foundation.
Of the 42 participating families, their median household income is $18,400. Almost a quarter of participants have experienced domestic violence in the last year and 60% have experienced food insecurity, according to the Foundation for Black Women’s Wellness.
While results from the Madison Forward Fund pilot aren’t finalized, preliminary findings show a higher rate of families receiving payments were employed full-time halfway through the program, at the end of the year and six months later than families in the program’s control group. A report with more details is expected from the University of Pennsylvania’s Center for Guaranteed Income Research at the end of this month.
Initial findings suggest the $500 in guaranteed income each month provided financial support without reducing workforce participation, according to the Madison Forward Fund.
Participants spent the bulk of their payments on retail goods and groceries at 29% and 27%, respectively. Transportation, housing and utilities were the next largest spending categories with less than 14% spent on entertainment, health care, financial transactions and education.
To participate in the first round, families had to live in the city of Madison, have a child 17 years or younger in the household, and make no more than 200% of the federal poverty line. At the time, that income was $55,500 a year for a family of four in Wisconsin.
The median household income of participants was $14,378 a year, according to a Center for Guaranteed Income website tracking the program.
A living wage in Madison for a family of four with two working adults is $29 an hour, according to the Living Wage Calculator from the Massachusetts Institute of Technology. A living wage is how much each full-time worker must earn on an hourly basis to help cover the cost of their family’s minimum basic needs.
A living wage in Madison translates to nearly $60,000 a year that each adult would need to make. For a single parent of two children, a living wage in Madison is considered $53 an hour, or $109,000 a year.
“Families are working really, really hard,” said Blake Roberts Crall, program manager of the Madison Forward Fund. “But it doesn’t matter how hard families are working. They still can’t get ahead. And there’s a lot of important social safety net programs or other sorts of resources out there. But even with that, it’s not enough to be able to really thrive in the city or in the community.”
The Madison Forward Fund was structured as a randomized control trial to study the effects the payments had on families. Of the 3,000 eligible applicants, 155 households were randomly chosen to receive the $500 monthly payments. Another 200 households didn’t receive payments and acted as a control group.
Participants were surveyed throughout the year of payments and then for another six months afterward. Over 80% of participants were female and almost three quarters were single. About half of participants were Black, around a quarter were white, and the remaining quarter were mixed-race, Asian or Latino.
Similar programs have been piloted across the country. Researchers of a guaranteed income program in Cambridge, Massachusetts, found participants reported higher incomes and full-time employment after receiving payments. A program in Rhode Island showed payments helped people transition out of homelessness as well as significantly increased their likelihood of attending their child’s school meetings.
While those programs were short-term pilots, Alaska has run a universal basic income program since the 1980s, known as the Permanent Fund Dividend. The payments vary year to year and are funded by investment earnings from the state’s mineral royalties. All residents can receive a payment, regardless of income or employment status.
Studies of Alaska’s payments show the income doesn’t negatively impact employment and can reduce rural poverty rates for Alaska Natives.
Lawmakers seek to block guaranteed income programs
A bill making its way through the state Assembly this year aims to ban municipalities from using state funds to support guaranteed income programs.
The bill was introduced by Reps. Jim Piwowarczyk, R-Hubertus, and Dave Maxey, R-New Berlin. At a public hearing on the legislation April 10, they highlighted concerns about taxpayer dollars going to these types of programs.
“Local governments should not be allowed to divert taxpayer dollars from critical programs to fund initiatives that encourage dependency on the government rather than fostering self-reliance,” Piwowarczyk said.
The Madison Forward Fund relied solely on private philanthropy rather than taxpayer dollars for funding payments to its participants.
At the legislative hearing, Piwowarczyk raised concerns about a similar, ongoing guaranteed income program in Milwaukee aimed at helping low-income pregnant mothers. That program, called the Bridge Project, received $350,000 in federal COVID-19 relief dollars from the city of Milwaukee and is otherwise supported by private funds, according to the Zilber Family Foundation, which is partnering on the project.
The bill was moved out of the Assembly Committee on Public Benefit Reform April 15 with the committee’s four Republican members voting in favor. The committee’s two Democratic members — Reps. Ryan Clancy, D-Milwaukee, and Christian Phelps, D-Eau Claire — voted against the legislation, questioning the need for the bill.
This post was originally published on Basic Income Today.