COVID-19 Highlighted the Poverty-Mental Health Link. Can California Experiments Break It?

Stories that caught our attention

Oakland Mayor Libby Schaaf speaks at a news conference in Oakland, Calif.
Oakland Mayor Libby Schaaf has announced a privately funded program that will give low-income families of color $500 per month to use for any purpose they choose. Photo: Ben Margot / AP 

Rosario Correa, a mother of three in Sacramento, works the night shift at a fast-food restaurant. She gets home at 2 a.m. and wakes up five and a half hours later to get her kids ready for online school. Much of her income goes to the childcare she needs when she’s working. Correa told Sacramento Bee reporter Kim Bojórquez, “I hardly sleep. It’s been very difficult.

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Women and people of color like Correa have been hit especially hard by the COVID-19 crisis. The economic upheaval that followed pandemic-related shutdowns was unprecedented, the California Budget and Policy Center reported earlier this month, noting that “many women in California were already struggling to pay the bills prior to the onset of the economic crisis.”

Though the pandemic and related school closures, spikes in unemployment, and other woes have challenged most Californians, the COVID-19 crisis hit families with low incomes and families of color with “more devastating force,” according to an Education Trust-West survey conducted in February. Worries about money run high, and the everyday choices forced by economic pressures can be overwhelming, as Karen D’Souza reported for EdSource. “More than a third of parents surveyed,” D’Souza wrote, “have skipped meals or had to cut back on food for the children as a result of the pandemic.”

The Pandemic’s Impact on Mental Health

A 2020 KFF (Kaiser Family Foundation) poll found that “people with lower incomes are generally more likely to report major negative mental health impacts from worry or stress over the coronavirus.” Thirty-five percent of people earning less than $40,000 reported a major negative effect on their mental health, as did 21% of those with incomes between $40,000 to $89,999. About 17% of people earning $90,000 or more reported that the pandemic had a major negative effect on their mental health.

The mental health effects of economic instability can be countered by supportive economic policies, according to work by Seth A. Berkowitz and Sanjay Basu published in Health Affairs last month. Their study compared a two-week period when people were receiving $600 in supplemental unemployment insurance to a like period after the supplemental payments ended. Households that received the enhanced benefits saw fewer health-related social needs and better mental health, researchers reported. After the benefits ended, however, these households were less likely to have made their housing payment and more likely to report not having enough to eat. They also were more likely to experience symptoms of depression and anxiety.

So many people who died by suicide weren’t just starving for therapeutic attention. They were starving.

—Jason Cherkis

Guaranteed income is one policy that could offer women like Correa the economic stability so crucial to better mental health. Guaranteed income offers recipients a set sum of money every month, similar to a universal basic income (UBI). The idea is not new, and has been tested in the United States as far back as the 1960s. More recently, UBI gained national attention as a key component of Andrew Yang’s unsuccessful run for the 2020 Democratic presidential nomination.

A guaranteed income pilot program in Stockton also drew national attention to the policy earlier this month, and has been successful in improving several aspects of quality of life, including mental health. Last week Oakland and Marin County each announced a similar program designed to assist people of color. Another policy that has significantly improved the mental health of low-wage workers also seeks to increase income, through a minimum wage hike.

The Health Consequences of Poverty

Poverty is a major determinant of health status because it harms both mental and physical well-being. The likelihood of deadly events like stroke and illnesses like heart disease and diabetes increases as income decreases. Americans living in families with incomes of less than $35,000 are five times more likely to report persistent daily sadness than people with family income greater than $100,000. “These disparities emerge early in life and can be transmitted across generations,” Dhruv Khullar, MD, and Dave Chokshi, MD, wrote in Health Affairs.

Journalist Jason Cherkis, who is writing a book on suicide, reflected that diagnostic labels such as major depression seem oddly misplaced when people are facing the enormous burden of unpaid rent and hunger. “I noticed that all too often, these patients’ troubles began with childhood trauma and frequently ended with economic deprivation,” Cherkis wrote in a recent op-ed for the New York Times. “So many people who died by suicide weren’t just starving for therapeutic attention. They were starving.”

Researchers have long understood that economic instability has a negative effect on mental health, but the dramatic economic downturn that accompanied COVID-19 has put a spotlight on the issue. A California-focused survey conducted last year by the California Health Care Foundation echoed results from the KFF poll. Californians with low incomes were more likely to report that since the pandemic, their mental or emotional health got “worse” (30%) or “a lot worse” (6%). Among survey respondents with higher incomes, 62% reported no change in their mental or emotional health.

Cities in California, such as Compton and Oakland, are betting that a relatively small monthly boost in income will improve mental health for people with low incomes. Stockton’s universal basic income program provided a proof point that a small boost of $500 a month can help people create dramatic changes in their circumstances. A recent analysis of the first year of the program, which started in 2019, showed that most people moved from being likely to have mild mental health disorders to “likely mental wellness.”

Guaranteed Income

The idea behind guaranteed income is that giving people a set amount of money each month can help break cycles of poverty. Once they are no longer living paycheck to paycheck, people are better able to focus on improving other aspects of their lives, proponents say.

Stockton’s guaranteed income pilot program, called SEED, provided $500 a month to 125 randomly selected people living in lower-income neighborhoods. The program “measurably improved participants’ job prospects, financial stability, and overall well-being,” researchers found in their analysis, which was released this month.

What people managed to accomplish with their monthly $500 amazed researchers. In addition to improvements in mental health, gains in employment were particularly striking, they said. People who got the stipend moved into full-time employment at twice the rate of the control group. Painful month-to-month income fluctuations decreased.

“These numbers were incredible. I hardly believed them myself,” Stacia West, a researcher at the University of Tennessee who analyzed the SEED data, told Vivian Wu of The Guardian.

“What we saw was that individuals were able to leverage the $500 in ways that enabled them to show up and fill out a job application — if you’re working part-time and taking care of a child, there’s not a lot of time in your day,” West explained to Los Angeles Times business columnist Michael Hiltzik.

The similar Oakland program, which launched last week, will randomly select 600 city applicants to receive $500 a month for at least 18 months, according to Mayor Libby Schaaf. There will be no strings attached, and recipients will decide how to spend their checks. Applicants must be families with at least one child. Applicants must earn less than 50% of the area’s median income (about $59,000 per year for a family of three). Half of the slots in the program will be reserved for those earning below 138% of the federal poverty level, or about $30,000 per year for a family of three. The program is also designed to address racial wealth disparities, so applicants must be Black, indigenous, or other people of color. Oakland’s program, like Stockton’s, will be financed by foundations.

Marin’s program is similarly targeted, but the stipend is $1,000 and and will last for two years. Participants who are mothers will also be offered optional programs such as job training. The stipend for Marin’s guaranteed basic income will be paid for and administered by the Marin Community Foundation. The county voted last week to pay for the additional services available to mothers.

Minimum Wage

The end of the pandemic won’t erase the myriad traumas that it inflicted on people, especially those living in poverty. Instead, “the COVID-19 pandemic has raised concerns about a coming mental health crisis,” Cherkis wrote. The conditions of economic uncertainty experienced by Correa and other workers who struggle financially during COVID-19 can create an emotional firestorm that won’t end after herd immunity is established.

Cherkis points to research indicating that there are concrete policy steps that can help people cope with the trauma of the crisis. Increasing the minimum wage, for instance, help to offset suicide.

Researchers at Emory University found that a $1 increase in the minimum hourly wage could significantly reduce suicide rates. “When a state’s jobless rate topped 6.5%, a $1 boost in the minimum wage was followed by a roughly 6% drop in the suicide rate among working-age adults with a high school diploma or less — in other words, among those most likely to work in minimum-wage jobs,” Melissa Healy reported in the Los Angeles Times.

The recently passed American Rescue Plan Act, which did not include a minimum wage hike, did provide significant temporary assistance to reduce poverty stemming from the pandemic. The research from Health Affairs published last month, however, suggests that the changes will have to be made permanent to improve the mental health of people living on low incomes.

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