💸 Paterson experiments with Guaranteed Income program

💸 Study finds it has "mixed results"

💸 Mayor wants to expand program to more people

PATERSON — Low-income residents living in New Jersey's third-largest city are getting $400 every month and can use it for whatever they want.

Paterson Mayor Andre Sayegh calls it a success and wants to expand the experimental program to thousands more Patersonians — and maybe one day, the entire country.

The Guaranteed Income Pilot Program gave 110 individuals debit cards loaded with $400 each month for twelve months during the pandemic.

Their purchases were tracked by researchers at the Center for Guaranteed Income Research at the University of Pennsylvania.

(AP Photo/Seth Wenig)
(AP Photo/Seth Wenig)

How was the money spent?

"They're not spending on cigarettes or alcohol like people may think. They're actually spending it on groceries. They're paying their rent, their utility bills," Sayegh said.

Funds were also spent on childcare, Thanksgiving dinner, and Christmas gifts bought at department stores. One man opened his first bank account, got a credit card, and brought his credit score up to 712.

An extra $400 each month represented a significant increase for the selected individuals, more than half of whom had at least one child.

The median yearly income for the group was less than $14,000. A family of three must make less than $24,200 to fall below the federal poverty line.

Paterson U.S. Census quick facts (Google Maps/Canva)
Paterson U.S. Census quick facts (Google Maps/Canva)

Living in poverty is a reality for tens of thousands of Paterson residents. More than one in five people in the city live under the poverty line, according to census data.

They're living paycheck to paycheck and are one flat tire away from going under, Sayegh said.

Did Guaranteed Income work?

Researchers said the allowance was not a "panacea" but worked as an intervention.

They also said the assistance had "mixed results." It was not enough to offset the economic hardships brought on by the pandemic and rising expenses.

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The Great Falls in Paterson as seen in 2013. (AP Photo/Mel Evans, File)
The Great Falls in Paterson as seen in 2013. (AP Photo/Mel Evans, File)

"In Paterson, the costs of living and housing were so high that the potential opportunities inherent in the extra cash were, in turn, restricted. For instance, rents continue to rise in Paterson, far outpacing income levels," the study said.

Still, the study said that the pilot program served as a "blueprint" for future policy initiatives.

Paterson mayor wants to expand Guaranteed Income program

Mayor Andre Sayegh, who took the initiative to get Paterson in the program, said the city expanded the program to 200 residents this past December. That's still far short of the thousands of residents who applied.

He's asking the state legislature to earmark $5.5 million in the 2025 fiscal year budget. If that fails, he said the city could use around $500,000 in leftover funds from the American Rescue Plan.

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