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Louisville nonprofit examining effects of guaranteed income program for young adults

Row of houses
Photo by J. Tyler Franklin
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LPM
Russell was one of three west Louisville neighborhoods selected for Metro United Way's guaranteed income pilot program.

Metro United Way is leading the YALift! program, which gave $500 to young adults each month for a year. The Louisville organization plans to publish findings from its guaranteed basic income pilot in 2024.

Unlike many other forms of financial assistance, the YALift! program provided direct payments to participants without specifying how they had to spend them.

Louisvillians aged 18-24 who lived in the Smoketown, Russell and California neighborhoods could apply. The 150 participants received payments from April 2022 to March 2023. More than 90% of them were Black, and 68% were women.

During and after the pilot, participants answered survey questions about how they used the money and how it impacted them. Other applicants who weren’t chosen also received questions, which Metro United Way will use to compare the experiences of the two groups.

Researchers are now working on collecting a final round of feedback. Metro United Way expects to publish the findings next year.

The nonprofit led the pilot, in collaboration with Louisville Metro Government and Russell: A Place of Promise. Metro United Way and Mayors for a Guaranteed Income, a national coalition, each provided $500,000 to fund payments, while the city added $100,000 for administrative support.

U.S. Representative Morgan McGarvey, a Democrat who represents Kentucky’s 3rd congressional district, said he plans to introduce a guaranteed income bill inspired by the YALift! program by the end of the year.

Details of the bill aren’t finalized yet, but McGarvey said it would provide monthly cash payments to 18- to 24-year-olds who regularly file their taxes. He views it as a means to tackle poverty early in people’s lives, which he said could reduce government spending.

“We're going to pay for [addressing poverty] at some point along the way,” McGarvey said. “And would you rather do that up front, when we are helping people out? We're getting people a better chance.”

LPM News’ Jacob Munoz spoke with Metro United Way project manager Colleen Reilly about the guaranteed income program and its potential impact in Louisville. This interview has been edited for clarity and length.

Why was the 18–24 age range selected?

In Kentucky, a quarter of young adults are below the federal poverty level. A lot of our social safety nets focus on children or older adults.

With the economic downturns of the 2000s, plus the impact of COVID, young adults, especially ones that are just getting started and in some of those lower wage jobs, they often have a little bit of a harder time financially. And so we really wanted to target that age group.

I thought that it would be a good way to kind of set an income foundational floor for them as they're getting started on whatever their next steps are, if it's education, or going into a trade or starting a job.

Is this Metro United Way's first experience in terms of dealing with a guaranteed income program?

It’s really only been until the last couple of years that I feel like philanthropy has started to entertain the idea of direct cash to individuals. For a long time, it was seen as something that you just didn't do.

With a lot of our programs that we have, you can pay a vendor like LG&E. If someone's having some hardship and they can't pay their electric bill, you can pay the vendor.

When we were presented with the opportunity to manage this guaranteed income pilot, we thought that this would be a really great expression of the fact that we trust individuals to know what is best for themselves, and how to best manage their lives and their money.

Can you tell me about some of the key findings that we know about right now?

We’re still waiting on our evaluation results. We don't know exactly what those results are going to show, but we strongly suspect that they will mirror the results of the other guaranteed income pilot cities that have come before us. And so that has largely looked like things like reducing those monthly income fluctuations, so people are better able to budget.

All of that decreases stress, just knowing that there's a certain amount of money that's going to be there. So other pilot cities are showing, you know, increased well-being of participants, decreased rates of depression and anxiety. We're also seeing that people are actually more likely to gain full-time employment.

It’s also showing, kind of having this extra guaranteed amount of income that you have, it's allowing people to have more agency and self-determination, and maybe some healthy risk-taking in terms of, what they want to do for their career, or their education or things like that.

What sort of things do you want residents to know about guaranteed income, and why it could be important for communities and for residents in our city?

I think it's an extremely important tool that we have access to, to alleviate poverty. You know, poverty falls along racial and gender lines, so it's a tool for racial and gender equity as well.

Guaranteed income, just that term can be a little controversial. But when you think about it, it’s cash assistance to individuals. And that is something that we as a country do. One of the most recent examples of that is the Child Tax Credit, that was expanded during COVID. And so that was cash to families. With that, we saw all of these children being lifted out of poverty.

I really don't think that guaranteed income is too largely different than that or something like an Earned Income Tax Credit. So I think that's just a way that we can think about it and talk about it, as a way of lifting people out of poverty.

Support for this story was provided in part by the Jewish Heritage Fund.

Jacob is LPM's Business and Development Reporter. Email Jacob at jmunoz@lpm.org.