Universal Basic Income: An idea who’s time has come
Los Angeles rolls out largest US anti-poverty program. Earlier efforts have promising results, researchers say
The concept of a universal basic income (UBI) – an unconditional monthly government stipend paid out to those most in need – entered the national lexicon in the United States during the run-up to the 2020 presidential primary election.
Democratic candidate Andrew Yang made it the cornerstone of his short-lived primary campaign and many paid attention.
Yang described the UBI as “a form of social security that guarantees a certain amount of money to every citizen within a given governed population, without having to pass a test or fulfill a work requirement.”
Since then, the concept has been gaining currency in bigger and bigger demonstration projects not only in the US but around the world.
This week, the city of Los Angeles is embarking on the biggest one in the US yet. Since Sunday, it has been taking applications from those hoping for a chance to get $1,000 per month starting in January – no strings attached.
Applications will close on Nov. 7.
The city’s “Big Leap” (Los Angeles is calling it by an alternative name “Guaranteed Basic Income”) is by no means the first – not even in southern California – but it is so far the largest, with about $38 million available for up to 3,000 individuals.
Both the County of Los Angeles and the city of Long Beach (a Los Angeles neighbor) previously announced similar but smaller programs for their jurisdictions.
According to the city’s web site Los Angeles Big Leap the “Los Angeles Economic Assistance Pilot will provide approximately 3,000 individuals with $1,000 per month for 12 months.
“These will be unconditional, regular, and direct cash payments to individual participants that supplement existing welfare programs.” This means there are no restrictions on how the money can be spent and no requirements for the participants to “earn” it in some way.
“GBI programs are founded upon the belief that the people enduring financial instability or poverty are best positioned to make informed financial decisions that efficiently address their household’s needs – whether that means paying for rent, a new tire, or an unexpected trip to urgent care.
“These participants are granted the freedom to meet their most pressing needs without delay.”
The one-year pilot will allow the city to study the impact of its financial support to the neediest people and its effectiveness.
“The City of Los Angeles is working with the Center of Guaranteed Income Research at the University of Pennsylvania to gather valuable data throughout the pilot program,” the web site says. “The information collected will be used to reform current policies, guide future programs, and aid in the expansion of our social safety net.”
The only conditions applicants are required to meet are very broad in nature: they must be residents of the city; over 18 years old; have at least one dependent child or be pregnant; and have an income at or below the federal poverty level.
More than two years ago in central California, the city of Stockton (pop. 312,000) adopted one of the country’s earlier UBI programs in 2019.
On its web site A guaranteed income changes lives the city explains how 125 randomly selected residents were given $500 per month for 24 months.
“The Stockton Economic Empowerment Demonstration (SEED) is the nation’s first mayor-led guaranteed income demonstration,” the site says.
“Launched in February, 2019 by former Mayor Michael D. Tubbs, SEED gave 125 randomly selected residents $500/month for 24 months. The cash was completely unconditional, with no strings attached and no work requirements.”
The two-year project aimed “to test a simple yet innovative solution to poverty and inequality.”
The former Mayor Tubbs is quoted on the site, saying: “Poverty is the biggest issue. Everything we deal with stems from that. There’s so many people working incredibly hard, and if life happens, there’s no bottom.”
At the end of the pilot program in March this year researchers released their findings showing “how just $500 a month can provide the dignity and agency that everyone deserves.”
The report was compiled by a team of independent researchers from the University of Tennessee and the University of Pennsylvania, and funded by the Evidence for Action Program at the Robert Wood Johnson Foundation.
Key findings [of the study] include:
Guaranteed income reduced income volatility, or the month-to-month income fluctuations that households face.
Unconditional cash enabled recipients to find full-time employment.
Recipients of guaranteed income were healthier, showing less depression and anxiety and enhanced wellbeing.
The guaranteed income alleviated financial scarcity creating new opportunities for self-determination, choice, goal-setting, and risk-taking.”
Other findings highlighted in the report were also striking: at beginning of the study only 28% of the recipients had full-time employment. One year later, 40% of recipients were employed full time.
This is of major significance because it answers the most frequent question critics of similar programs always cite: cash handouts decrease motivation for recipients to get jobs. This study proves they do not.
The researchers also lamented the small amount of the payments in this pilot program.
“We found that the $500 made making rent payments, covering childcare, and taking care of medical needs more bearable for recipients, but it was not nearly enough to cover the exorbitant costs of these necessities.”
Perhaps that is one reason why the Los Angeles program plans to distribute twice the amount — $1,000 per month.
Another program launched recently in Gary, Indiana is also gaining some attention.
At its web site titled A guaranteed income changes lives we find that the program is modeled after the one in Stockton.
“The Guaranteed Income Validation Effort (GIVE) is Indiana's first mayor-led guaranteed income demonstration. Launched in May, 2021 by Mayor Jerome A. Prince,” the site says.
“GIVE provides 125 randomly selected residents $500/month for 12 months. The cash is completely unconditional, with no strings attached and no work requirements.
“Aiming to test a simple yet innovative solution to poverty and inequality, GIVE follows in the footsteps of the nation's first mayor-led program, the Stockton Economic Empowerment Demonstration ( SEED); preliminary findings show how just $500 a month can provide the dignity that everyone deserves.”
One of the most comprehensive reports on universal basic income programs around the world was published in October 2020 by Vox in their article Everywhere basic income has been tried, in one map
“The idea of a basic income was, for decades, something of a policy fantasy. But the last few years have seen it become less outlandish, to the point where we now have many limited basic income programs up and running around the world — perhaps a dry run for a broader embrace of the policy in the coming years,” the article says.
Of course, Vox does not include the one starting this week in Los Angeles … but no doubt a future update could not ignore one of the largest programs to date.
“The general idea — that the government should give every citizen a regular infusion of free money with no strings attached — has been around since the 16th century. But it’s recently experienced a remarkable resurgence: Advocates ranging from tech billionaire Mark Zuckerberg to libertarian economist Milton Friedman to former Democratic presidential candidate Andrew Yang have endorsed it. …
“And around the world, countries are running pilot programs to test it…” the article says.
The US has tried a few basic income experiments, but most have been short-lived small-scale trials.
The article does mention the Stockton program, where “the first batch of data shows the recipients are mostly spending the money on food, clothes, and utility bills.”
One of the only nationwide UBI programs was tried in Finland, which was named the Number One country in the world in 2021 for quality of life, according to CEOWorld magazine’s 2021 report.
Vox reports that “[I]n 2017, the Finnish government decided to see what would happen if it chose 2,000 unemployed citizens at random and gave them a check of 560 euros ($635) every month for two years. Participants were assured they’d keep receiving the money if they got a job.
“As it turned out, the income didn’t help them get jobs,” Vox reported, “but it did make them feel happier and less stressed. The recipients also reported that they felt more trust toward other people and social institutions — from political parties to the police to the courts — than they did before getting a basic income. Finland ended the trial in 2018.”
It’s noteworthy that there are currently three pilot programs underway within the confines of Los Angeles County alone. Another, further north, is entering its second phase: Oakland’s Guaranteed Income Pilot in the city of Oakland.
California has in many areas been a bellwether for trends which later spread around the US, sometimes even to the federal government. The state led the way in reducing air pollution and setting standards for automobile emissions, which were later adopted by many other states and then the federal government.
It is quite possible that these pilot UBI programs will prove successful, just like the one in Stockton. As the idea spreads nationwide, there may be a reason for optimism that eventually Andrew Yang's vision for the country will be realized at the federal level. That would be an unqualified social good.
Very interesting and once again I learnt a lot!
This is a GREAT example of why I am no longer a Democrat! There is no such thing as free money, someone has to pay for this, by taxing hard working people who choose to do something with their lives rather than sitting on their lazy ass! Simply put: a HORRIBLE idea!