Civic Register
| 10.20.17

Universal Basic Income Trial Launched in California

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What’s the story?

Universal Basic Income (UBI), the idea of providing citizens with a minimum, no strings attached, cash stipend, is an idea that is gaining traction around the globe. Trials have begun in half a dozen countries, and now one is being launched in Stockton, California, a small city on the far outskirts of the Bay Area.

Why does it matter?

In the U.S. the most prominent proponents of UBI come from the tech industry. They believe that the inevitability of automation will leave masses of the current workforce without means of income, so a UBI would begin to make up the difference and prevent the expansion of the gap between rich and poor.

The Stockton project — known as the Stockton Economic Empowerment Demonstration (SEED) — is being launched with support from the Economic Security Project, a pro-basic income advocacy and research group co-chaired by Facebook co-founder and former New Republic publisher Chris Hughes and activists Natalie Foster and Dorian Warren.

SEED is looking at offering $500 a month ($6000 annually) to a random sampling of 100 city residents. Mayor Michael Tubbs is trying to secure enough funding to run the trial for three years. He hopes to see how participants invest the money when they have a little extra breathing room and don’t have to scrape the bottom of the barrel for basic necessities, whether that’s taking more time off work to spend on other activities, or going back to school, or volunteering.

Critics of UBI have pointed to the massive price tag that would be involved if such a program were instituted across the country, over $1.25 trillion a year. Some proponents on the right argue that UBI could replace all other entitlement programs, like Social Security and food stamps.

The difference between the current entitlement approach and the UBI approach, however, being that entitlements are specifically geared towards helping the poor, while UBI would be given to everyone, regardless of their existing income.

Other analysts argue that the problem is not with the massive price tag, but that such a program would have to be accompanied by an adjustment to the tax system. In their scheme, the system would not be universal, however, but would expand the existing progressive tax system to pay significantly larger amounts to those on the bottom end of the income scale. The projected cost of such a program drops to $182 billion annually, and focuses funding on the poor.

Some UBI trials, like one run in Zambia, ran into a deeper issue with UBI, which is people’s resistance to offering unconditional money to those capable of work. Despite the success of the initial trial project, which saw participants either hiring people to help them farm their land, thus passing along the benefit, or becoming entrepreneurs and lifting themselves out of poverty, the government could not combat the public perception that they were "encouraging laziness".

As a result of social pressure, when the Zambian government concluded the trial and decided to expand the program country-wide, they only offered the cash benefit to those incapable of work — the elderly, the sick, single moms with lots of kids, which changes the potential outcomes completely.

The SEED project is still in the planning stages, but is projected to launch by August of 2018. Tubbs is hoping to see results similar to the initial Zambian model, but will likely have to deal with many of the same types of resistance to the ‘idea’ of unconditional assistance before he even gets to the budget implications.

What do you think?

Do you support the idea of a UBI, or at least find it intriguing? Or do you have the same concerns about unconditional cash assistance encouraging people not to work? Are you concerned about the price tag? Do you think removing many existing entitlement programs to cover the cost of UBI makes sense or not? What about the tax implications? Are there ways you can see to reorganize the tax system to mitigate the budgetary impacts of UBI?

Tell us in the comments what you think, then use the Take Action button to tell your reps!

— Asha Sanaker

(Photo Credit: Pexels.com / Creative Commons)

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