California City Will Experiment with $500/Month Universal Basic Income

Liberals have touted the notion of universal basic income, or UBI, for years. The idea behind UBI is that everyone — households or individuals, depending on the proposal — receives a minimum stipend from the government to ensure a “floor” of income.

The concept of UBI sounds wonderful on paper. It’s nice to think that we could ensure that nobody does completely without some kind of income. But, like with any other socialist idea, where does the money come from?

Various entities have tried universal basic income in different forms. Cambodia has given $5 a month to children and pregnant women in a program in which the government and UNICEF partner. Finland experimented with UBI for 2,000 unemployed people; recipients get 560 euros whether they find a job or not. Non-profits and startups have floated trial balloons in Kenya and Oakland, California.

Alaska residents receive royalty payments from oil profits, but this program is more of a bonus than a UBI guarantee.

Now, Stockton, California, a city nestled in the shadow of Silicon Valley, is experimenting with a UBI project. The city will give 100 residents a stipend of $500 a month for 18 months with no strings attached. The goal behind this $900,000 gamble is to see if free money will lift people out of poverty.

Universal basic income has been a pet project of Silicon Valley for a while, with leading lights of the industry like Elon Musk and Mark Zuckerberg expressing interest. In fact, $1 million of the money involved in the experiment comes from the Economic Security Project, the brainchild of Facebook co-founder Chris Hughes.

Not long ago, Stockton faced bankruptcy, and a quarter of the city’s 300,000 residents lives below the poverty level. But 27-year-old Mayor Michael Tubbs believes in the idea of UBI as a way to get people out of poverty, and he established the Stockton Economic Empowerment Demonstration (SEED) to administer the experiment.

SEED’s website touts the revolutionary nature of this proposal:

SEED seeks to confront, address, and humanize the most pressing and pernicious problems our country faces: poverty, inequality, and widespread financial insecurity. We hope to challenge the long-hold stereotypes and assumptions about the poor, particularly the working poor, that paralyze our pursuit of more aggressive solutions; to illustrate how widespread and episodic poverty is; to highlight the fact that poverty does not discriminate. In sum, we believe that SEED provides an unprecedented opportunity to radically reimagine our social safety net and reinvent the 21st century Social Contract.

And CNN quotes the mayor:

“We have a bunch of folks starting off life already behind, born into communities that don’t have a lot of opportunity,” said Stockton Mayor Michael Tubbs. “My mom always used to say, ‘You have to get out of Stockton.’ … But I want Stockton to be [a place people] want to live in.”

His interest in Universal Basic Income also stems from the “looming threat of automation and displacement.”

Tubbs believes the companies building these technologies, “have a responsibility to make sure people aren’t adversely impacted and also make their communities better places.”

Lori Ospina, project manager for SEED, says that applicants for the UBI money have “inundated” her email box. And why not? Free money has an enticing lure.

When the project launches next year, SEED will monitor the stipend recipients in the hopes of determining whether UBI has a positive effect on health and school attendance, as well as “female empowerment.” Yep — you bet there’s an identity politics component to the UBI experiment.

But where does the money come from? In Stockton’s case, the money comes from private sources, but it only benefits 100 people. If this concept were to somehow work, how could a city of 300,000 people  give its residents that kind of money over the long term? All the Silicon Valley CEO guilt in the world can’t fund a citywide basic income for an extended period of time.

Another thing worth thinking about is that the track record of throwing money at social ills has proved fruitless. Going all the way back to Lyndon Johnson and his War on Poverty, governmental entities have poured out copious amounts of cash to eradicate poverty, only to see minimal results.

Stockton is playing around with yet another socialistic idea that looks good on paper but likely won’t pay off, especially as a long-term policy. Warm-hearted ideas like these inevitably wind up proving the truth about socialism that Margaret Thatcher best expressed: “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.”