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<ul class="summary-list"><li>OpenResearch's study gave monthly stipends to 3,000 low-income Americans.</li><li>Funded in part by OpenAI CEO Sam Altman, the study explored the impact of basic income payments.</li></ul>What happens when you give people $1,000 a month? They start thinking about launching a business.Earlier this month, the nonprofit OpenResearch published the <a target="_blank" href="https://www.businessinsider.com/sam-altman-basic-income-study-results-2024-7">results of a study</a> in which it gave $1,000 a month in cash payments to low-income residents in urban, suburban, and rural areas of the United States.The study, funded in part by <a target="_blank" href="https://www.businessinsider.com/sam-altman-chatgpt-openai-ceo-career-net-worth-ycombinator-prepper-2023-1">OpenAI CEO Sam Altman</a>, was driven by Altman's belief that recurring basic income payments might be necessary for an age when AI could make many jobs obsolete.Many in the AI industry support a so-called <a target="_blank" class="" href="https://www.businessinsider.com/universal-basic-income-ubi-dave-ramsey-show-karl-marx-playbook-2024-7">universal basic income</a>, which would give regular payments to all people regardless of their financial status. Given the political hurdles such a program would face, many cities are experimenting with a guaranteed basic income on a smaller level instead. Altman's study tested this version of a basic income."So technically, this is not a UBI, because if it were, there would be no income requirement, no age requirement. Every single person within a community would get it. And obviously, that's really difficult to test," OpenResearch's director, Elizabeth Rhodes, said on an <a target="_blank" href="https://www.nytimes.com/2024/07/26/podcasts/kamala-harriss-bratty-coconut-memescape-what-does-1000-a-month-do-the-empire-crowdstrikes-back.html">episode of the New York Times podcast Hard Fork</a>. "We're testing more unconditional cash."Most participants allocated their monthly stipends toward rent, transportation, and food. Over time, though, the money also contributed to a shift in their mindset."One of the things that I found interesting was the growing interest in entrepreneurship and having ideas for businesses," Rhodes said. "And in a lot of ways, I feel like it gave people some space to sit back and think about what would they do if they had more opportunities."The reality is that many low-income <a target="_blank" href="https://www.businessinsider.com/alice-living-paycheck-to-paycheck-without-government-assistance-snap-medicaid-2024-5#:~:text=The%20latest%20figures%20from%20United,the%20US%20are%20considered%20ALICE.">Americans are living paycheck to paycheck</a>, taking odd jobs, or overnight shifts. "There are a lot of people, I think, now that are just surviving and maybe work is not providing that sense of meaning and they don't have those choices," Rhodes said.

The director of Sam Altman's basic income study says one of the most interesting results was an increased interest in starting a business

<ul class="summary-list"><li>Critics of guaranteed basic income often suggest that cash payments discourage work.</li><li>Experts say basic income can help participants afford job training and land higher-paying roles.</li></ul>Taniquewa Brewster is training to be a doula. The mom of five knows both how joyful and overwhelming a baby can be, and she wants to improve birth outcomes for pregnant Texans.While earning her <a target="_blank" class="" href="https://www.businessinsider.com/i-am-a-doula-this-is-what-i-do-2022-1">doula</a> certificate, Brewster is working full-time as an assistant property manager at an income-based housing unit. The 39-year-old said she earned the position after being promoted from her role as a leasing agent, a change she said was only possible because of <a target="_blank" class="" href="https://www.businessinsider.com/universal-basic-income-pros-and-cons">guaranteed basic income.</a>She had previously been patching together <a target="_blank" class="" href="https://www.businessinsider.com/how-make-money-gig-worker-uber-lyft-doordash-delivery-driver-2023-12">low-paying part-time work</a> to get by."I was working as hard as I could, working overtime," Brewster said. "That's keeping me away from my family. That's keeping me away from things that I can be doing — even going back to school — because I have to work so hard to just cover rent."From September 2022 to August 2023, she received $1,000 monthly through <a target="_blank" class="" href="https://www.businessinsider.com/austin-basic-income-gbi-ubi-housing-homeless-parenting-rent-texas-2024-2">Austin's UpTogether pilot</a>. The cash payments gave her breathing room: she said the money helped her afford household bills, along with the real estate and doula training she needed to land higher paying jobs.Guaranteed basic income programs are gaining momentum across the US as an approach to poverty reduction. The model offers participants recurring <a target="_blank" class="" href="https://www.businessinsider.com/universal-basic-income-ubi">cash payments</a> for a set period of time, with no strings attached. Like in Austin's pilot, many programs are directed at households that live near the <a target="_blank" class="" href="https://www.businessinsider.com/poverty-line-leaves-behind-low-income-americans-snap-medicare-wic-2024-6#:~:text=The%20current%20federal%20poverty%20line,up%2C%20it%20is%20too%20low.">federal poverty line</a>.Despite GBI's growing popularity with some policymakers and economic security experts, it continues to face opposition. Business Insider has covered basic income bans, <a target="_blank" class="" href="https://www.businessinsider.com/basic-income-program-lawsuit-houston-texas-ubi-gbi-ken-paxton-2024-9">lawsuits over GBI funding</a>, and criticism that giving people cash <a target="_blank" href="https://www.businessinsider.com/universal-basic-income-ubi-dave-ramsey-show-karl-marx-playbook-2024-7">discourages participants from working</a> — one of the most common critiques.Some experts, however, have a different view: Financial support frequently offers participants a leg-up in their careers. This is in line with results from most of <a target="_blank" class="" href="https://www.businessinsider.com/which-states-cities-have-guaranteed-basic-income-programs-low-income-2024-4">America's GBI pilots.</a>Since the Austin program ended and Brewster started her new role, she estimates her monthly income has increased by over $3,000. She said her <a target="_blank" class="" href="https://www.businessinsider.com/immigrants-new-mexico-basic-income-for-housing-healthcare-ubi-gbi2024-5">job stability</a> helped her afford essentials like groceries and healthcare, and allowed her to spend more time with her children."I know it's great to have that talent and to know how to do things," she said. "But when you have that certification behind it, it just helps you to move up in the company or in whatever you do."<h2 id="0c19f308-5bbe-47f6-a561-6c5d8e61a435">Basic income critics say cash discourages work</h2><a target="_blank" class="" href="https://www.businessinsider.com/universal-basic-income-ubi-ray-dalio-cash-payments-harm-poverty-2024-7">Billionaires</a>, politicians, and <a target="_blank" class="" href="https://www.businessinsider.com/universal-basic-income-ubi-dave-ramsey-show-karl-marx-playbook-2024-7">financial leaders</a> have criticized basic income programs, saying that cash payments could encourage laziness among participants. Others add that having an extra monthly income could <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-05-17/south-dakota-texas-block-local-universal-basic-income-laws">dissuade people from having a job</a>."Do we just get born and get money from the government?" Arizona State Rep. John Gillette previously told BI. "I think the Founding Fathers would say that is very contrary to our capitalist system and encouraging people to work."Sometimes results do show that participants work fewer hours or drop multiple jobs during their GBI program. For example, in <a target="_blank" class="" href="https://www.businessinsider.com/sam-altman-basic-income-study-results-2024-7">Illinois and Texas' OpenResearch study</a> — which examined the effects of two GBI programs that were funded by Sam Altman, the CEO of OpenAI — employment rates fell in the second and third years among the participants compared with the control group. The pilot gave 3,000 low-income families $1,000 a month for three years, beginning in 2019.When conducting guaranteed basic income pilots, researchers typically gather data on participant spending, housing outcomes, food access, mental health, job security, and weekly working hours. This data is gathered throughout a program's run and after its conclusion via participant surveys and is often compared to a control group of people not receiving cash payments.Sukhi Samra — the executive director of Mayors for a Guaranteed Income, a national advocacy network — told BI that measuring employment trends can be challenging because it doesn't capture the individualized benefits of GBI.It may look like participants are working fewer hours or fewer jobs, but often, Samra said those roles are more stable and higher-paying. Although job numbers declined in the OpenResearch case, the average participant income increased, researchers found. The study speculated the income boost could be due to participants having more flexibility over their employment choices."Sometimes being able to work less does have profound impacts for families," Samra said. "Especially when you're talking about parents being able to spend more time with their children, being able to obtain a professional license or degree, or take care of an elderly parent."More than a dozen guaranteed income pilots overseen by Mayors for a Guaranteed Income, like in <a target="_blank" class="" href="https://www.businessinsider.com/stockton-basic-income-experiment-success-employment-wellbeing-2021-3#:~:text=In%20Stockton%2C%20California%2C%20125%20residents,launch%20more%20basic%2Dincome%20pilots.">Stockton</a> and <a target="_blank" class="" href="https://www.businessinsider.com/baltimore-basic-income-parents-afford-housing-get-jobs-ubi-gbi-2024-7#:~:text=Baltimore%20gave%20low%2Dincome%20parents,some%20lawmakers%20are%20fighting%20them.">Baltimore</a>, showed an overall increase in employment among participants. Other pilots, like one in <a target="_blank" class="" href="https://www.businessinsider.com/denver-basic-income-project-ubi-extended-homelessness-poverty-2024-1">Denver</a>, showed no statistically significant impact on employment rates. Few programs show negative job outcomes.BI has heard anecdotally from participants that cash payments helped them <a target="_blank" class="" href="https://www.businessinsider.com/post/preview?svapi&amp;post_id=66ab7d4d6550c8ac4ef862cd">pay for the childcare</a> they needed to be focused at work, leading to promotions. Others said $500 or $1,000 a month was the boost they needed to drop several lower-paying gigs in favor of one <a target="_blank" class="" href="https://www.businessinsider.com/alabama-basic-income-single-mothers-afford-childcare-bills-birmingham-2024-8">higher-paying full-time job</a>, or reduce their working hours so they could pursue higher education or job training. Some leave their jobs to start <a target="_blank" class="" href="https://www.businessinsider.com/sam-altman-basic-income-study-results-starting-a-business-2024-7#:~:text=OpenResearch's%20study%20gave%20monthly%20stipends,essentials%20and%20considered%20starting%20businesses.">their own small businesses</a>."The benefits of that sort of compound over time, and aren't really captured in the nuances of the data," Samra said.Still, guaranteed basic income programs reflect short-term results. There is limited research on participant job outcomes in the months and years after their payments end. Participant employment — or unemployment — might also be impacted by outside factors, like the <a target="_blank" class="" href="https://www.businessinsider.com/hiring-picks-up-in-fall-low-openings-hurting-job-seekers-2024-9">changing labor market</a>, a person's family situation, or shifts to the <a target="_blank" class="" href="https://www.businessinsider.com/inflation-cost-of-living-what-is-middle-class-housing-market-2024-4">local cost of living</a>. Most GBI participants need to continue working to make ends meet.<h2 id="7292fcde-172d-457c-9073-cb15b2dc5747">Participants say basic income helped them afford job training, land higher-paying roles</h2>Cepia Harper, 41, just began her second year as a middle school English teacher. Her favorite lesson to teach is essay writing, helping students learn how to craft the perfect thesis statement.Harper began teaching shortly after enrolling in a <a target="_blank" class="" href="https://www.businessinsider.com/georgia-basic-income-afford-rent-daycare-single-mom-ubi-gbi-2024-6">Georgia-based guaranteed basic income program</a>, In Her Hands. The program offered 650 participants — who were all low-income Black women — $20,400 over two years, ending in spring 2024.Along with helping cover <a target="_blank" class="" href="https://www.businessinsider.com/new-orleans-guaranteed-basic-income-supports-opportunity-youth-school-work-2024-9">household bills and unexpected expenses</a>, Harper said the money allowed her to get her education credentials. She had previously been cobbling together a couple of retail jobs to make ends meet."I've never had it where I could just go home to my own kids, pick them up from practice," she said. "They all play sports, and I could never leave work to go to a game."More predictable hours means Harper can spend more time with her family. Her annual income has risen by about $13,000 since she began teaching, she said, so she no longer has to work multiple jobs.And, as participants use their cash payments to build careers, Asya Howlette said they are more likely to <a target="_blank" class="" href="https://www.businessinsider.com/new-orleans-guaranteed-basic-income-supports-opportunity-youth-school-work-2024-9">boost local economies</a>. As the director of the New Orleans Mayor's Office of Youth and Families, Howlette has noticed the trend in her own city, where she helped oversee a recent GBI program focused on teenagers and young adults disconnected from work and school."It's improving our economy because all of the money that these young people were using is going right back into our economy," she previously told BI. "It's not like they're sitting on a lot of cash, they're spending it right back in our grocery stores, they're putting it right back in our small businesses."While GBI isn't meant to serve as a paycheck replacement, Samra said can be a financial safety net: "We are allowing folks to stabilize and to then plan for the future," she added.Being able to afford training for more lucrative jobs in real estate and maternal care gave Brewster — the mother of five — financial confidence."It really motivated me," she said of her GBI program. "Because I knew that, once the money stopped, what would I do afterward?"Have you participated in a guaranteed basic income program? Are you open to sharing your experience? If so, reach out to this reporter at <a target="_blank" class="" href="mailto:allisonkelly@businessinsider.com">allisonkelly@businessinsider.com</a>.

The basic income myth: cash discourages work

<ul class="summary-list"><li>The results of OpenAI CEO Sam Altman's guaranteed-basic-income study are in.</li><li>Overall spending increased, but most of the extra cash went to food and rent.</li></ul>The results are in for Sam Altman's much-anticipated basic-income study, one of the largest of its kind. The experiment gave low-income participants $1,000 a month for three years, no strings attached.Recipients put the bulk of their extra spending toward basic needs such as rent, transportation, and food, the study found. They also worked less on average but remained engaged in the workforce and were more deliberate in their job searches compared with a control group."Recipients had greater agency to make decisions that worked best for their lives and to prepare for the future, from moving neighborhoods to expressing interest in new business ventures," the report's authors said.Altman, the CEO of OpenAI, a leading artificial-intelligence company, raised $60 million for the study, including $14 million of his own money. <a target="_blank" class="" href="https://www.openresearchlab.org/studies/unconditional-cash-study/study">OpenResearch</a> conducted the study, which was led by the researcher Elizabeth Rhodes.It officially began in 2019 when 3,000 Texas and Illinois residents across urban, suburban, and rural areas enrolled. All of these residents had incomes below $28,000. A third got $1,000 a month for three years, while the rest — the control group — got $50 a month. No enrolled participants lost their existing benefits.The study found that those who received the $1,000 payments increased their overall spending by an average of $310 a month, but most of that spending went toward food, rent, and transportation. They also offered more financial support to others in need compared with the control group.Researchers, however, said they found no "direct evidence of improved access to healthcare or improvements to physical and mental health" among those who received $1,000 payments."We do see significant reductions in stress, mental distress, and food insecurity during the first year, but those effects fade out by the second and third years of the program," the report said, noting that $1,000 a month could only do so much. "Cash alone cannot address challenges such as chronic health conditions, lack of childcare, or the high cost of housing."<h2 id="f9fd84cd-91cb-426e-86a2-3a3a6135eb76">The debate over basic income</h2>The study was inspired by Altman's belief in the importance of a basic income in the age of AI, which some fear could render millions of jobs obsolete."It's impossible to truly have equality of opportunity without some version of guaranteed income," Altman said when announcing the project.The idea of a <a target="_blank" class="" href="https://www.businessinsider.com/how-people-spend-universal-basic-income-ubi-food-housing-transportation-2024-4">universal basic income</a> has been around for a while but rose to prominence as the center of Andrew Yang's 2020 presidential campaign. Other significant figures in the tech industry have since voiced support for some kind of basic income, including the Twitter cofounder Jack Dorsey and Tesla CEO Elon Musk. The AI godfather <a target="_blank" class="" href="https://www.businessinsider.com/ai-godfather-geoffrey-hinton-universal-basic-income-2024-5">Geoffrey Hinton recently advised the British government</a> to adopt a universal basic income to mitigate the number of "mundane jobs" AI could replace.A universal basic income would provide all people with direct cash payments, no strings attached. That's a hefty political lift, however. So many cities and states have experimented with guaranteed basic incomes instead. These programs provide cash payments without restrictions to select low-income or vulnerable populations. Altman's study falls into this camp as well.Data from dozens of these smaller programs have found that cash payments can help alleviate homelessness, unemployment, and food insecurity — though results still stress the need for local and state governments to invest in social services and housing infrastructure.Earlier this year, Altman also floated another kind of basic-income plan, which he called a "<a target="_blank" class="" href="https://www.businessinsider.com/openai-sam-altman-universal-basic-income-idea-compute-gpt-7-2024-5">universal basic compute</a>." In this scenario, Altman said, people would get a "slice" of the computational resources of the large language model GPT-7, which they could use however they liked."You own part of the productivity," he explained on a <a target="_blank" class="" href="https://podcasts.apple.com/us/podcast/all-in-with-chamath-jason-sacks-friedberg/id1502871393?i=1000655220554">podcast</a>.Even these smaller experiments, however, have <a target="_blank" class="" href="https://www.businessinsider.com/basic-income-opposition-discriminatory-universal-basic-income-argument-2024-4">faced political hurdles</a>. Conservatives in several states have challenged the programs, halting their progress.<h2 id="8ac87517-0da8-463d-9395-bf25b14d1489">The Altman study's findings</h2>In its results, Altman's study assessed both quantitative data, such as surveys and bank transactions, and qualitative data, such as interviews with recipients.The study found that compared with the control group, recipients' total individual savings in their bank accounts increased by nearly 25%. Recipients also spent $22 more a month on other people, or about 26% more than the control group. There was little impact on car or home ownership, though recipients of the $1,000 were more likely to move neighborhoods or pay for housing than the control group.Regarding healthcare, recipients saw slight increases compared with the control group in dental care, emergency-room visits, and healthcare spending — though there was no direct evidence of improved health.Recipients were more likely to want to have a budget and advance their education, specifically in the third year, compared with the control group. But there were no significant effects on educational attainment overall.The study, which began during the COVID-19 pandemic when unemployment was high, found that employment rates fell in the second and third years among recipients compared with the control group. On average, incomes rose significantly for all groups, though slightly higher for the control group. Incomes for recipients of the $1,000 rose from just under $30,000 to $45,710, while incomes for the control group started at a similar level but grew higher, to $50,970."Cash offers flexibility and may increase agency to make employment decisions that align with recipients' individual circumstances, goals, and values," the report's authors said.<h2 id="78870e8c-3763-4a7c-a1d2-a8d6bae99891">What the participants in Altman's basic income study say</h2>One recipient in the program, Sarah, is a mother of four from rural Illinois who teaches in a homeschool network and makes just enough from her job to pay for school supplies."I don't really make anything off of it," she said in a testimonial shared by OpenResearch. "Even though my husband had a pretty decent job, we didn't have a lot of money for extras."The payments from the Altman program helped Sarah pay for braces for both of her children, which weren't covered by their insurance, she said. She also used the money to finance a graduation trip for her daughter.But Sarah said she began "slipping into a mindset" in which she was less careful with her finances because it felt as if money was coming in "without having to work for it.""Looking back, I regret that I didn't save more of it," she said.Another recipient, Cara, told the study's researchers that she suffered from a debilitating nerve disorder that caused pain across much of her body and a loss of mobility.While she started to receive some short-term disability payments, she said a break-in to her apartment set her back financially, and she began to sell her personal belongings."Feeling the loss of being able to care for yourself and desperately needing the help of others; it's rough," Cara said.She said she "probably started crying" when she got the phone call saying she would be receiving $1,000 payments from the Altman program. The money helped her pay off nearly all of her debts."It's almost like a miracle," she said. "Knowing that I was able to manage that mountain of medical debt, it felt like my brain would have been in a completely different place."Celene, another participant, told researchers she was forced to move her family in with a friend after losing money in a business venture. She said she was living in squalid conditions.When she received the call that she had been selected for the group receiving $1,000 a month, she was in utter disbelief.She said the money helped her buy new clothes, shoes, and necessities for herself and her children. By the second month, she had landed a job and began saving.The money helped her "not feel like a failure as a parent," she said, and gave her the confidence to make decisions in her family's best interests.Correction: July 22, 2024 — An earlier version of this story misstated when Andrew Yang ran for president. It was in 2020, not 2016.

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The director of Sam Altman's basic income study says one of the most interesting results was an increased interest in starting a business

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The basic income myth: cash discourages work

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Sam Altman's basic-income study is out. Here's what it found.

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