Boston Globe: Participants in Chelsea’s guaranteed income experiment are mostly spending at food stores, restaurants

By Andy Rosen Globe Staff

CHELSEA — Participants in Chelsea’s experimental guaranteed income program are mostly spending their monthly stipend at food stores and restaurants, according to a preliminary report by Harvard University researchers following the closely watched Chelsea Eats initiative.

Supporters of the program, which began in November and will run through at least next month, say the findings support their view that putting money in people’s pockets is the most effective and humane way to offer them help.

City Manager Thomas G. Ambrosino said the data, collected Nov. 24 to March 2, ″confirmed our expectation that people would spend the money responsibly.”

Chelsea Eats serves about 2,000 families recruited largely at food pantries in the city, providing them with as much as $400 per month on cards, depending on a household’s size. The cards can be used anywhere that accepts Visa payments. The program is supported by city funds, state grants, and philanthropic contributions.

“This is a more efficient way of dealing with the problem of food insecurity,” Ambrosino said. He said the program has cut out the overhead of operations such as food pantries, which require trucking, temporary employees, and other “non-food” costs, only to make people line up for things they may not want or need.

On Monday, researchers at the Harvard Kennedy School’s Rappaport Institute for Greater Boston will release an analysis of 47,624 transactions worth a total of nearly $2.1 million. They found that about 73 percent of those purchases were at places where food is the primary product, such as grocery stores, wholesale clubs, convenience stores, and restaurants.

Market Basket supermarkets were recipients of 32 percent of the total spending, the report said, with most of that business going to the chain’s Chelsea store.

The program is a departure from traditional assistance efforts, which either provide food directly to participants or allow them to purchase only items deemed eligible.

Chelsea Eats is among the most ambitious US experiments with so-called guaranteed income programs. The city has been among the state’s hardest-hit by both the coronavirus pandemic and the ensuing economic crisis that cost many residents their jobs.

Chelsea has about 40,000 people living in 13,000 households, according to US census data, which means the program is penetrating the community more deeply than other such trial programs.

In Stockton, Calif., population 313,000, a similar program that involved 125 people ran for two years, starting in early 2019. Research found that participants were healthier, found better economic opportunities, and were more insulated from financial instability than their peers who did not receive the $500 monthly payments.

The early results from Chelsea indicate the program is working as anticipated, according to Jeffrey Liebman, director of Harvard’s Taubman Center for State and Local Government.

Liebman, who is the lead author of the paper analyzing purchasing patterns, said the preliminary results showed a surprising amount of money stayed in and around Chelsea — at stores, restaurants, and markets — indicating that the program’s economic impact could be wider than expected.

While some of the spending on restaurants was at large chains such as McDonalds and Dunkin’, significant amounts went to local restaurants such as Broadway House of Pizza and Taqueria El Charrito.

“What this program shows so far is that it is feasible to implement a basic income program at scale, and that when you do so, it helps people meet their basic needs,” Liebman said.

Jill Shah, president of the Shah Family Foundation, which is a major supporter of the initiative, said there is a need for more programs like the one in Chelsea.

“People aren’t earning enough to keep them with enough food, shelter, and safety,” Shah said. “If we can’t guarantee every American those three basic needs to be met, then we’re not doing our job as fellow Americans.”

The foundation and the city recently announced that the program, which had been scheduled to conclude this month, will run into June. Shah and Ambrosino said they are hoping to continue it through the summer.

Even though the program appears to be helping, the need in Chelsea remains strong. Liebman said about 40 percent of people who applied for the program say they or their children are sometimes not getting enough to eat, compared with 55 percent before Chelsea Eats began.

At a twice-weekly food pantry run by the Salvation Army on Chestnut Street, Captain Brenda Gonzalez said people need food and other supplies, despite the Chelsea Eats program. On Thursday, volunteers were handing out turkey, fruit, vegetables, rice, sanitary supplies, and other goods.

Many people who requested cards were not selected to receive them. The payments were distributed by lottery from among 3,615 applicants. Others have needs that outstrip or are outside of what the program provides.

For those taking part, the additional money has allowed them some financial flexibility. Several Chelsea Eats participants ― who were volunteering at the Salvation Army on Thursday ― said they have used the money for food, but also for cleaning supplies and clothes.

“The card was very helpful because it covered so many things food stamps didn’t cover,” said Gloria Caballero, who lost her job in the food service industry more than a year ago. The mother of two spoke to the Globe in an interview interpreted by Gonzalez.

While the Harvard study did not determine exactly what people bought with their cards, it segmented the purchases based on the kind of retailer where transactions were made.

The results showed 20 percent of the spending was at retailers that primarily sell products other than food.. Four percent went to what researchers termed “professional services” — primarily utilities.

One percent went to travel and transportation. Less than half of 1 percent was spent at liquor stores or smoke shops.

Though the short-term prospects for Chelsea Eats remain promising, Ambrosino said he hopes it can spur additional momentum for basic-income programs.

Ambrosino said broad acceptance for such programs, including federal support, will be essential. “The local government can’t do this alone,” he said.