Can Cities Pave the Way Toward a Universal Basic Income?

For seven months, starting last fall, Mia Birdsong traveled to cities across the country to find out how people struggling to make ends meet would use an unconditional cash infusion, or Universal Basic Income (UBI). Their answers, she found, were surprisingly unsurprising: A reliable car to shave 90 minutes off a daily commute; a years-overdue visit to family just across the state line; a football uniform for a child hoping to try out for the school team; a couple of 20-dollar bills in the sock drawer—for emergencies only.

“The things that people would want out of a Universal Basic Income shouldn’t come as a surprise to anyone,” says Birdsong, a senior fellow of the Economic Security Project and a Fellow with New America’s Family-Centered Social Policy program. “They care about the same things that everybody cares about: home ownership, their children’s education, their own education. They would use the money to make sure that their extended families and communities are okay.” Such findings point towards a long-proven conclusion among social scientists: The ripple effects of direct cash transfers extend far wider than in-kind transfers, which end when the food stamps have run out, or when the housing voucher has been cashed in.

Different versions of Universal Basic Income have found supporters across centuries, continents, and political spectrums. Advocates on the left argue that, in addition to providing a necessary safety net for the millions of Americans in poverty, UBI would improve the bargaining power of low-wage workers and reduce the patronizing interference and stigma often associated with government assistance. And now, with some 80 percent of full-time workers reporting that they live paycheck to paycheck and few accessing welfare, a renewed wave of interest is growing. With millions of jobs hanging by a thread stretched thinner and thinner by increased automation, UBI appears to many as an appropriately radical solution, especially in the cities in closest proximity to automation’s pull.

About an hour and a half northeast of Silicon Valley, the small city of Stockton, California, still hasn’t recovered from the financial crisis. Many homes remain in foreclosure, and unemployment—which peaked at 19 percent in early 2011—remains among the highest in the country. When Mayor Michael Tubbs took office in 2017, the then-26-year-old pledged to bring new jobs and opportunities to the city’s poor, who at the time made up about a quarter of the population. “I grew up in a working-class, working-poor family. My mom was on welfare for the first seven years of my life,” Mayor Tubbs says. “Issues of economic security are personal to me, and it’s important to use my platform to talk about the plight of the majority of people in our country who are really struggling.”

His most ambitious proposal was unveiled last year: a local UBI pilot. For 18 months beginning in 2019, 100 residents will receive $500 a month—no strings attached. Participants will be selected randomly; anyone who lives in a neighborhood with a median income at or below that of the city’s overall median income of $46,033 will be eligible. Researchers will follow how families use the money and the effect it has on the quality of life in their homes and communities.

Given the small trial population, it is unlikely to have an immediate or measurable effect on poverty in Stockton; rather, its chief effect—and its goal, in fact—will likely be to demonstrate if and how a UBI program might work in the city and how it might be scaled up.

“We know a lot about what happens when you give people money through programs like TANF [Temporary Assistance for Needy Families, or welfare, as it’s more commonly known] and EITC [Earned Income Tax Credit], but we don’t have a good example in the US of what happens when you give money without conditions,” says economic journalist Annie Lowrey, whose just-released book, Give People Money, explores the outcomes of UBI projects across the world. “Because we don’t have that research here, it still feels like it’s out of the realm of the possible, but it’s not so uncertain what people will do with the money.” Lowrey writes that, contrary to Reagan’s toxic myth of the “welfare queen,” most people who receive a limited amount of cash won’t stop working—they’ll work to improve the lives of their families and communities.

Since Stockton’s proposal was announced, the idea has caught on across the country. Mayor Tubbs says he’s received dozens of e-mails from city mayors and representatives interested in bringing a UBI to their city. Just last month, Chicago Alderman Ameya Pawar proposed assembling a task force to develop a UBI pilot, in which $500 a month would be delivered to 1,000 Chicago families. The task force would also explore local methods for updating the Earned Income Tax Credit system—a tax refund for low to moderate income people—by creating a Chicago-backed EITC or distributing federal EITC to Chicagoans on a quarterly, rather than yearly, basis. With 36 co-sponsors on the bill, its approval rides on Mayor Rahm Emanuel, who, despite clear pro-corporate sympathies, has a history of supporting similar efforts. Chief among them: a 2014 experiment testing quarterly EITC distribution, which found that periodic payments go much further towards increasing financial stability than an annual lump sum, which many families use to pay off debt which has accumulated over the previous year. The pilot would make Chicago the largest American city to try UBI.

With more cities likely to come out of the woodwork looking to do their own test run, a question becomes increasingly pressing: How will they fund it? For Stockton’s UBI pilot, Mayor Tubbs has secured funding from the Economic Security Project, a research organization co-chaired by Facebook co-founder Chris Hughes, whose recent book Fair Shot: Rethinking Inequality and How We Earn just joined the rapidly expanding pro-UBI catalog. Since its inception a little over a year and a half ago, the Economic Security Project has funded a number of UBI-related initiatives, from macroeconomic modeling at the center-left Roosevelt Institute to Mia Birdsong’s interviews, which will form the basis of a podcast series to be released in the fall.

The Economic Security Project is hardly the only UBI benefactors to come out of Silicon Valley. After completing a smaller trial in Oakland last year, start-up entrepreneur Sam Altman’s organization Y Combinator Research is conducting a test with 1,000 people across two states receiving $1,000 a month for the next three to five years. More recently, Elon Musk and Mark Zuckerberg have joined UBI’s cadre of public supporters—though their apparent tilt to the left seems less a matter of progressive altruism than cold reckoning with the future they’ve helped create. For Musk, for instance, UBI appears as a “necessary” solution to a fast-approaching future in which “there will be fewer and fewer jobs that a robot cannot do better,” Zuckerberg, meanwhile, has lauded UBI’s potential to serve as a springboard for as yet closeted entrepreneurs—to “give everyone a cushion to try new things.”

The support of these wealthy entrepreneurs—whose companies have contributed to the very economic precarity that make such radical solutions as UBI necessary—has been met with its fair share of skepticism. “Silicon Valley does not appear to me to be directed towards building worker power, it does not appear to be directed towards building debtor power, it is not directed towards building power at all for low-income folks,” says Raúl Carrillo, the director of the National Jobs for All Coalition and one of the directors of the Modern Money Network. “I’m supportive of universal adequate living standards and everyone living a life where all of their material needs are met. Show me the document—I’ll sign it. But I don’t think we want to live in a world where people are subsisting through checks from Silicon Valley and they still don’t have a voice in how the world works. At that point we might as well all just ask for Amazon gift cards.”

Some UBI advocates share versions of these concerns. Alderman Pawar expects that Chicago’s UBI would also be funded by philanthropists, including the tech community, and he has his reservations. “Philanthropy does not necessarily create equity and I understand the concerns around that,” he says. But ultimately, he’s willing to take the risk. “I believe that it’s equally important to force a conversation about direct cash transfers. If that means going to private philanthropists or even the tech community to fund a pilot to dispel those really horrible myths, I’m all for it.”

The fact is, for cash-strapped cities like Chicago and Stockton, there’s no immediate alternative. Money set aside on a local or state level for a pilot, let alone for a full-fledged program, would likely come at the direct expense of other crucial services, potentially doing more harm than good. And from a research perspective, Dr. Amy Castro Baker, a professor at the University of Pennsylvania who is working with the Economic Security Project to design the specifics of the pilot’s implementation in Stockton, says that private funding has its benefits: “It gives us a safe incubation space to test what it would be like before it’s tied to a political cycle. We’re freed from having to contend with political forces in the same way.”

But this raises another question: Are the proposed pilot versions of UBI so narrow, and so well insulated from “political forces,” that they can’t actually tell us all that much about how to scale up the program? The question these pilots are seeking to answer—what will people do with the money?—is a manageable research question, but it leaves much more unwieldy ones untouched: How could the country shift its priorities to pay for the $3.9 trillion a year it would take to give a $1,000-a-month payment to every American? (Hint: Some advocates have suggested raising taxes on estates or instituting a carbon tax or even robot tax.) What would it take to achieve the political shift necessary to pay for a UBI that is actually “universal”? And would giving the same amount of money actually have a marked impact on inequality, or would it simply raise the baseline, while maintaining the status quo?

Those involved in designing local pilots believe that these questions can be put on hold, at least for now. “What’s important is that people are suffering right now, today,” Mayor Tubbs says. The most important thing the pilot can do, he says, is spark a conversation that might translate down the road into state or nationwide change. “The Stockton pilot is important because it shows that a local elected can talk about this and not die for it. The public is actually ready for this conversation.”

Stockton Mayor Michael Tubbs responds to a question during his appearance before the Sacramento Press Club, Tuesday, July 10, 2018, in Sacramento, California. (Rich Pedroncelli / AP Photo)

Originally published by The Nation