Mo Money, Less Problems. Universal Basic Income in Action
A financial assistance program called the “Universal Basic Income” is in trial for residents of Stockton, CA and it’s time to talk about it.
Universal Basic Income (UBI): The Basics
Universal Basic Income is a fixed income that every citizen of a governed area (city, state, or country) receives every month from their government. What makes it different from welfare benefits such as unemployment or disability is that every citizen is guaranteed the money free and clear, with no type of test or qualification. This type of money can either take the place of welfare benefits or be given along with them to make a wider safety net for individuals or families. Pilot programs of UBI have been run in a number of countries, including Finland, who decided to end it after two years.
Most recently the topic of UBI has been discussed by presidential candidate Andrew Yang. The cornerstone of Yang’s presidential platform is the “Freedom Dividend,” which will create a universal basic income of $1,000 a month for every American over the age of 18 who doesn’t receive welfare benefits. If a person does receive welfare benefits, he or she can choose to either continue receiving them or get the $1,000 instead.
People who support the Universal Basic Income initiative hope that the money will go towards low-income workers in order to help them feel more stable as well as give them a chance to better their lives with steadier work or and or education. Also, UBI works off the concept that the government should ensure that its citizens can survive. Opponents of UBI say that it goes against self-reliance and that those who receive this type of free money would either choose not to work or spend it on frivolous things instead of necessities. There is also concern about where the money to pay for UBI would come from, and whether it would be better than welfare programs already in place.
Putting UBI Into Practice
This month New York Magazine’s The Intelligencer published a series of interviews featuring participants of the first Universal Basic Income program ever attempted called the Stockton Economic Empowerment Demonstration (SEED). In Stockton, a town in Northern California, 125 randomly-selected residents who earn less than $46,000 (the town's average annual income) will receive $500 debit cards every month. Mayor Michael Tubbs oversees the program which happens to be halfway through an 18-month pilot program. In an interview with NPR, Mayor Tubbs spoke about how the idea from the program came from his research team looking for the most radical way to lessen Stockton’s poverty rate which happens to be 23% of town’s residents. Tubbs said, “When I was in college, I had studied Dr. King. And he talked about how the richest nation in the world should be able to provide an economic floor for everyone. And he talked about the need for a guaranteed minimum income. So when my team came back with that idea, I said, oh, I remember hearing about this from Dr. King. Let’s figure out how to do it.”
The official data released on the program shows how the residents spent the money: 40% on food, 24% on merchandise like clothing, 11% on utilities, and 9% on gas and car repairs. These figures were calculated from the debit card records, which lets the researchers see where the money was spent. Also, 40% of the money given overall was withdrawn for cash.
Going Deeper Than the Statistics
The official data shows how much the extra money helps the residents with more stability and freedom. The five Stockton residents profiled in Bliss Broyard’s series for The Intelligencer have used the money to pay down debt, purchase clothes and school supplies for their children, daily and medical expenses. For example, Danielle, a married mother of two girls who practice an austerity diet and now combined with the money is able to pay down medical debt and pay her parents who helps her out with her daughters. Then there is Laura, who was barely getting by on the Social Security benefits. After she received her first check she finally could afford car repairs and go to the doctor which resulted in her lowering her blood pressure. All five of the residents profiled in the series support the program overall.
Laura, SEED participant. Photo Credit: Michelle Groskopf
As pointed out by Broyard, “the point of making basic income universal is for the government to get out of the business of sorting the population into the deserving and the undeserving, categories that have been wrought and cast by racism.” Many of the critics of UBI still work off the assumption that poor people are bad with money, or don’t want to work, and that the drug tests, paperwork, and office visits required by welfare programs keep them in line. But as Broyard’s series shows, low-income individuals know how to pay their bills and budget the little money they have as much as high-income earners, and probably more so. Both supporters and opponents of UBI should look to the Stockton program as an example of what the money means to those who need it.
