Jan 21, 2021 - Economy

Guaranteed income programs are proliferating

Illustration of a city skyline made of dollars.

Illustration: Brendan Lynch/Axios

Cities around the country are starting up guaranteed income programs, which pay low-income residents around $300–$600 a month to help improve their lives.

Why it matters: If successful, backers hope these experiments — which bring the idea of guaranteed basic income from the progressive drawing board to reality — could set the stage for a day when unconditional cash stipends are a ubiquitous national safety net.

Driving the news: The first three pilots — in St. Paul, Minnesota; Compton, California; and Richmond, Virginia — are now under way.

  • Compton, which is running the largest one, is giving up to $600 a month to 800 low-income residents for two years — with no strings attached.
  • "The Compton Pledge" will include undocumented immigrants and target people who are below the poverty line.
  • One goal is "to provide a data set that can be used to help guide guaranteed income policies at the state and federal levels," Compton Mayor Aja Brown tells Axios.

How it works: Some projects are being paid for by CARES Act money and others from private sources.

Context: The movement is being driven by Mayors for a Guaranteed Income, founded in June by Michael Tubbs, who was until recently the mayor of Stockton, Calif.

  • The group has 34 mayors — including Eric Garcetti of Los Angeles, Jenny Durkan of Seattle and Keisha Lance Bottoms of Atlanta — and $18 million from Twitter CEO Jack Dorsey.
  • Members hope to follow the lead of Stockton, which just concluded a two-year program that was declared a success.
  • "We found our folks spent money on food and utilities and rent and things of that sort, and not on frivolous expenses," Tubbs told Axios in December. "We've also found that people are healthier" because they have less stress.

Sukhi Samra, director of Mayors for a Guaranteed Income, said 12 to 15 programs are expected to start this year — including one in Pittsburgh that will include 100 Black women — with more to follow.

  • "Each of the mayors within the network is looking at a different recipient pool, and we encourage them to do so in a way that is responsive to their community’s needs," she tells Axios.
  • "Where possible we encourage cities to use public dollars, so that as more cities come on board, we can prove this is an idea worthy of public investment."

But, but, but: The programs may have some kinks to work out.

  • Planners want to ensure that participants don't lose other public benefits, like welfare or unemployment.
  • A two-year program in Finland that gave monthly payments to 2,000 unemployed people was viewed as a failure, since so many remained unemployed at the end of it.

What they're saying: "This is an acknowledgement that what we've been trying for a long time just hasn't worked," Providence Mayor Jorge Elorza tells Axios.

  • "I see it from a perspective of dignity," he said. "There's a lot of dignity and in having these dollars at your disposal, so that you can decide what is best for you and your family."

Of note: This approach is more targeted than the "universal basic income" promulgated by Andrew Yang, who wants to give every American $1,000 a month.

  • Yang tells Axios he sees the programs the mayors are starting up as stepping stones towards his goal. "I think universal basic income is inevitable," he said.
  • "Municipalities have budget constraints in a way that our national government does not," he added. "And so when you are looking to implement a basic income program in a community it makes perfect sense to start with the folks who have the least."
  • "So I'm sure if you were to ask the mayor, they would prefer to give it to everyone. But cities, can't operate like that, because they have budget constraints."
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