- People do not have the financial resilience to navigate emergencies in today's economy.
- Unconditional cash assistance helps people stabilize and prepare for future emergencies.
- After 2016 wildfires in Tennessee, Dolly Parton and the My People Fund pledged to provide $1,000 per month for six months to each family who lost their homes.
- The results showed that the direct cash payments did not disincentivize work and helped people get through the crisis.
- The study and others shows that now is the time to consider guaranteed income as part of a 21st century social safety net.
- Stacy Elliott is a Ph.D. student and graduate research assistant for the College of Social Work at the University of Tennessee.
Stacia Martin-West is an Assistant Professor in the College of Social Work at the University of Tennessee.
- This is an opinion column. The thoughts expressed are those of the author.
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As the entire West Coast deals with the fallout from massive wildfires and our nation continues to struggle through a once-in-a-generation pandemic, we can learn a great deal about how to help people in emergencies from unconditional cash disbursements we studied in Gatlinburg, Tennessee.
As we continue to navigate a once-in-a-generation pandemic the findings of our work in Gatlinburg demonstrate just how powerful cash can be in an emergency. Not only does cash assistance not cause folks to drop their employment, but it helps them navigate and prepare for future emergencies better than other other forms of aid. With hyper partisan gridlock preventing Americans from receiving badly needed stimulus checks, this moment gives us pause to consider cash as a permanent part of the social safety net.
In November 2016, devastating wildfires destroyed approximately 1,300 residences leaving local families in emotional and economic crisis. Dolly Parton and the My People Fund pledged to provide $1,000 per month for six months to each family who lost their homes. Here's what happened.
People don't stop working when we give them money
Despite receiving $1,000 per month for five months and a $5,000 cash transfer at the end of the program, recipients maintained employment and their regular work hours.
One of the most prevalent myths of cash transfers or guaranteed income is that receiving cash assistance disincentivizes folks from working or maintaining their level of employment. Our results indicate that this myth is false — recipients maintained about the same amount of employment and work hours before and during disbursement of the monthly $1,000.
People are better able to prepare themselves for future trouble when they have an income floor
Reported savings rates and amounts of savings to weather a future financial emergency increased substantially from the first to second observation. As with many forested areas on the West Coast, the next wildfire emergency in East Tennessee is a matter of when, not if, so having emergency savings in preparation for future wildfires is invaluable.
While the wildfires in 2016 were especially deadly and destructive, a major wildfire emergency happens in the Gatlinburg/Sevier County area of Tennessee about every decade or two, and climate change patterns hold important implications for longer, dryer summers and greater risks of future wildfires.
Folks are better able to manage emotional challenges when finances are more stable
Following the fires, there was a sharp increase in reported symptoms of depression and anxiety in the sample. However, there was a parallel rise in reported treatment-seeking behaviors for those symptoms.
Results indicated that wildfire survivors had higher rates of reporting symptoms of depression and anxiety, and the rate of reporting symptoms was sustained across time, even during and after receiving cash transfers. The good news though, was the parallel rise of reported treatment-seeking, such as going to therapy or the doctor to treat depression and anxiety.
Cash works best
In the final survey, recipients were asked which form of assistance was most helpful (other forms included donations from charity and churches, services from Red Cross and disaster relief, donated goods from friends and family, etc.) and the majority of respondents reported that the monthly cash transfers were the most helpful form of support above all others. With this, the study concluded that cash transfers may be an important, underutilized approach to recovery following an emergency.
As a lead researcher on the Stockton Economic Empowerment Demonstration (SEED), the first mayor-led guaranteed income pilot in the country, we weren't intending to look at the impact of GI as traditional disaster relief, but rather its impact on the ongoing emergency of income volatility that folks are living with daily.
Though our focuses are different, we are seeing similar data. Only 2% of people in the study report they are unemployed and not looking for work. When they began receiving the funds, they spent it how anyone would — on food, merchandise and utilities. And recipients report having been able to prepare for future financial emergencies and navigate the unexpected emergencies brought on by the pandemic.
We are also studying how changes in income volatility alter financial well-being, psychological distress, and physical functioning. We plan to release these data at the culmination of the research in 2021. Though the research is still in progress, anecdotal information provided through the storytelling efforts demonstrate a positive impact.
There is legislation introduced for a limited guaranteed income to lift the economy and help Americans weather the pandemic, but now with the second state of emergency 2020 has seen it is clear that folks do not have the financial resilience to navigate emergencies in today's economy, personal or pandemic sized.
As we consider solutions to help Americans remain solvent in an era of constant emergencies, we must look at the evidence that supports ongoing guaranteed income as part of the 21st century social safety net.
Stacy Elliott is a Ph.D. student and graduate research assistant for the College of Social Work at the University of Tennessee. Stacia Martin-West is an Assistant Professor in the College of Social Work at the University of Tennessee.