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A high-profile universal basic income experiment in Stockton, Calif., which gave randomly selected residents $500 per month for two years with no strings attached, measurably improved participants' job prospects, financial stability and overall well-being, according to a newly released study of the program's first year.
Michael Tubbs, at the time the mayor of Stockton, Calif., speaks during a 2019 interview. A universal basic income program run by a nonprofit founded by Tubbs gave $500 a month to 125 people who lived in census tracts at or below the city's median household income.
The Stockton Economic Empowerment Demonstration, or SEED, was founded in February 2019 by then-Mayor Michael Tubbs and funded by donors, including the Economic Security Project.
It gave 125 people living in neighborhoods at or below Stockton's median household income the unconditional monthly stipend. A study of the period from February 2019 to February 2020, conducted by a team of independent researchers, determined that full-time employment rose among those who received the guaranteed income and that their financial, physical and emotional health improved.
The idea of universal basic income was featured prominently in the 2020 campaign of Democratic presidential candidate Andrew Yang and has gained further traction during the coronavirus pandemic. Supporters say that for people living in poverty, a guaranteed income can alleviate stress and provide the financial security needed to find good jobs and avoid debt.
On Yang's nonprofit Venture for America — a kind of "entrepreneurial Teach for America," which would get the brightest minds to go to economically depressed communities and create startups there
Yang said he would create 100,000 jobs by 2025. So far, VFA has created 3,500 jobs
On how Yang's universal basic income (UBI) idea — the "Freedom Dividend" — would work
"The form of UBI that he is proposing for the United States is a set of guaranteed payments of $1,000 per month, or $12,000 per year, to all U.S. citizens over the age of 18," per Yang's campaign website.
Yang points out that this idea is not "Andrew Yang, crazy futurist." Everyone from Thomas Paine, to Martin Luther King Jr., to Milton Friedman, to the U.S. House of Representatives in the '70s has sought after this policy.
"This is baked into America's DNA. It's inevitable, and we need to get with the program and pass it so that we can actually start focusing on the real problems of this age, instead of having 78 percent of Americans living paycheck to paycheck and almost half can't afford an unexpected $500 bill, which ends up spreading this mindset of scarcity that makes it very very difficult for us to come together and solve bigger problems like climate change. Studies have shown that if you can't pay your bills, it has the effect of occupying your mental bandwidth to a point that it decreases your functional IQ by 13 points, or one standard deviation.
"So if people listening to this have the sneaking feeling that America is getting less rational, less reasonable, less optimistic, even more xenophobic, we are, because if you introduce pervasive financial insecurity into a society, those are all of the things that happen. And the way to reverse this is by getting the boot off of our throats and passing a freedom dividend, or a negative income tax, or a universal basic income — whatever you want to call it. But this is the flagship proposal behind my campaign, and one reason why we're doing so well is that it becomes very obvious as soon as you start to dig in and reflect on it."
"Americans can see through very, very quickly that the 'Freedom Dividend' is simply capitalism where income doesn't start at zero."
Andrew Yang on his universal basic income plan
On where the revenue to pay for this — estimated in the trillions of dollars — would come from
"A study just came out that said that our data is more valuable than oil. And, if you're listening to this, do you remember getting your data check in the mail? I certainly don't.
"You have Amazon, this trillion-dollar tech company that's closing 30% of our stores, paying literally zero in taxes, less than everyone listening to this. Think about that for a second: A trillion-dollar company, zero in taxes. So then if you look up and say, 'How are you going to pay for it?' Of course you're going to have a hard time paying for it if Amazon's paying zero back into our society.
"What we need to do is we need to give every American our tiny, tiny slice of every Amazon sale, every Google search, every Facebook ad, every robot truck mile. This would generate hundreds of billions in new revenue and pay for this 'Freedom Dividend,' in large part because the money does not disappear in our hands. We end up spending it in our local communities — on car repairs and daycare and Little League sign-ups. And it ends up creating hundreds of thousands of jobs where we live and work. This is the trickle-up economy from our people, our families and our communities up."
Won't consumers end up paying for a value-added tax?
"One reason why it's so important that we have this dividend — so that for any money you're spending into the the Amazons of the world, that you're getting that and then some. My plan would increase the buying power for 94% of Americans, and the 6% it would not are doing very, very well."
Why won't the "Freedom Dividend" be added on top of other government assistance folks are already receiving?
"The last thing we want to do is take anything away from anyone. I mean, you can tell, I'm trying to make the economy work for people, which is the way it should be. So the 'Freedom Dividend' is opt-in. We're not taking anything away from anyone, but if you do decide to opt in, then you would be foregoing certain cash-like benefits. But when I've talked to folks who are on SNAP or on these other programs, most of them would vastly prefer unconditional cash with no case management, no reporting requirements. A lot of them are incredibly frustrated by the bureaucracy that's associated with the benefits, and they live in fear that they're going to be taken away."
Please comment the project. Is the concept crazy? Is it unrealistic?
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