The concept of universal basic income is controversial in the United States and various other countries. However, a pilot project in Stockton, California, proves that it is not as outrageous as some want you to believe. (1)
Universal Basic Income Pilot Project A Success
Michael Tubbs is the former mayor of Stockton, California. He strongly believes in universal basic income. This is the idea that every citizen is entitled to a basic level of income to improve poverty rates. (1)
Critics say that simply just giving people money will discourage them from finding actual work. Tubbs proved them all wrong with the Stockton Economic Empowerment Demonstration (SEED). (1)
“My belief in it came from being raised by three amazing women, including my single mom,” Tubbs told Insider. “The issue wasn’t that they couldn’t manage money. The issue was they never had enough money to manage.” (1)
SEED
SEED was a pilot project with the goal of improving the lives of some of Stockton’s struggling citizens. 125 residents were given debit cards that were automatically loaded with $500 each month from February 2019 to the following January. (1)
All pilot participants came from neighborhoods where the average household income is at or lower than $46,000 per year, the same as the city’s overall median household income. (1)
An independent research team found that SEED successfully reduced unemployment among participants and helped them pay off debt. Participants also reported improved mental health and emotional well-being. It also helped many participants successfully financially navigate the COVID-19 pandemic. (1)
“It’s really made a huge impact on my quality of life and being able to go do just normal things that a lot of people take for granted,” one participant reported. “whether it’s go out to eat once every two weeks and sit down for a nice dinner, or whether it’s, you know, my mom’s birthday and I just want to get her a birthday present.” (1)
It allowed some people to actually listen to doctor’s orders and stay home from work for two weeks to quarantine. (1)
Read: North American Cities Are Replacing Cops With Civilians And It’s Working
What Did Participants Use The Money For?
Nearly all of the SEED participants used the stipend for essential items (1):
- 37% was used for food
- 22% for sales and merchandise (for example, items from Walmart or dollar stores)
- 11% went to utilities
- 10% on car costs
- Less than 1% on alcohol or tobacco products
By the following February, more than 50% of participants said they had enough money to cover unexpected expenses, which is two times the amount from the beginning of the project. Unemployment dropped from 12% to 8%, versus the control group who did not receive the stipend. This group’s unemployment rate rose from 14% to 15%. (1)
“Everything I thought would happen, I said would happen – I argued with Sarah Palin and Chuck Woolery and talked to ‘CBS This Morning’ and Bill Maher about – actually happened,” Tubbs said. (1)
What’s Next For Universal Basic Income
Though Tubbs lost his reelection last year, he still hopes to push universal basic income to become a national policy. He started a coalition called Mayors for a Guaranteed Income last June for other American mayors who want to start pilot projects of their own. There are 40 mayors in the group, and Twitter CEO Jack Dorsey donated $18 million to help them out. (1)
While pilot projects are happening in other cities like Richmond, Virginia, and Compton, California, mayors aren’t the only ones who believe in universal basic income. (2)
Facebook co-founder Chris Hughes said that in 2018, all workers, students, and caregivers in the United States making less than $50,000 per year should receive a guaranteed income of $500 each month. (2)
“Cash is the best thing you can do to improve health outcomes, education outcomes, and lift people out of poverty,” he said in his book Fair Shot. (2)
What finances his plan? Taxes from the country’s top 1%, which includes himself. (2)
“a small group of people are getting very, very wealthy while everyone else is struggling to make ends meet,” he says. (2)
A Tough Hill To Climb
While many people support ideas like Tubbs and Hughes, many others are against them. Some say universal basic income could trigger inflation and may decrease people’s motivation to seek actual employment. (2)
As Tubbs has discovered, this is not the case. Universal basic incomes allow people to (2):
- Negotiate wages or wait for better jobs
- Go back to school
- Work less to take care of a relative
- Start families
- Get out of the “poverty trap” perpetuated by traditional welfare programs.
- Contribute to (and help to stabilize) the economy
“I am so proud of all the pilots, but I’m ready for policy. I’ve got all the evidence I need.” Tubbs said. (1)
What do you think? Are you for or against a universal basic income?
Read: There Is Nothing Natural About the Way We Work
Sources
- “First Results From California’s Universal Basic Income Trial Show Employment Rose.” Science Alert. Aria Bendix. March 4, 2021.
- The Balance.