Rich Pedroncelli/AP Photo
Susie Garza, a participant in the Stockton Economic Empowerment Demonstration, displays the city-provided debit card she received, August 14, 2019, in Stockton, California.
The idea of a universal basic income (UBI) was launched into the spotlight in 2016, as a front-and-center piece to Andrew Yang’s 2016 presidential bid. While Yang’s run was short-lived, the concept of UBI resonated with many Americans.
UBI continues to lurk in the background of possibility. When COVID-19 became a pandemic and almost all families received unprecedented cash assistance to deal with the devastating loss of income and stability, people saw how the concept could translate into real-time relief.
“The popularity of universal basic income [is] the inherent political potential of the policy itself,” said Nika Soon-Shiong, founder and executive director of the Fund for Guaranteed Income (F4GI).
Since the pandemic, a multitude of guaranteed-income pilots have been launched across the country’s cities and counties. Recipients report increased financial stability as they use the money to pay bills or buy food for their families. But the pilots, which have been championed by lawmakers, activists, and millionaires alike, are rife with issues. For as much stability as the money brings to recipients, they are also likely to encounter a myriad of challenges before they receive or continue receiving the funds. And the organizations launching these pilots struggle with the logistics that get in the way of scaling up guaranteed income to universal basic income.
But there’s a deeper question: Is UBI a pipe dream that, even if it could be passed, would have to operate in America’s economic system that puts markets and profit ahead of all else? Or is there a way to harness the profit reliance of business to help the increasing number of needy Americans?
Now, there are many different iterations on the basic UBI format. What Yang championed was a flat amount (usually $1,000) of unconditional income that everyone would receive, regardless of who they are. The pilots that have been launched, by contrast, are usually some form of guaranteed income, a type of UBI that puts money in the pockets of specific groups of low-income people, one that is often location-based.
When Tiffany, a resident of Compton, California, for over 30 years, learned of a guaranteed-income pilot in her city, she believed it was a scam. But the Compton Pledge was real, and so was the difference it made. She was able to afford her lifesaving medication, save, and expand her family.
Tiffany says it created faith in her city where it was once lost. “At a certain point, it seemed like there was something negative in every direction,” she told the Fund for Guaranteed Income, which spearheaded the pilot. “The Pledge helped members of this community—who had reached their breaking point—find some positivity.”
F4GI was founded in 2020 to “disrupt the cycle of poverty and incarceration.” It partnered with Compton’s mayor Aja Brown’s office and the Jain Family Institute to create the Compton Pledge, which provided up to $600 a month to 800 low-income families, the majority of whom were people of color.
F4GI is one of many organizations that have partnered with cities and counties to provide a form of guaranteed income. The Guaranteed Income Pilots Dashboard was launched in September by the Center for Guaranteed Income Research, the Stanford Basic Income Lab, and Mayors for a Guaranteed Income as a way to track the incoming data from more than 30 pilots. There are an estimated 140 pilots or experiments across the country, with the Economic Security Project tracking at least 100.
A particularly salient issue for the pilots is one of the most simple: getting the actual money into the hands of people.
While recipients of the funds report increased economic security, whether through the ability to save or through money for food, clothes, and medicine, the pilots struggle to meet the promised needs and to scale up appropriately.
A particularly salient issue for the pilots is one of the most simple: getting the actual money into the hands of people. Most organizations opt to load the money onto a prepaid card issued by a bank. The bank then acts as a middleman between the organizations and recipients, potentially causing confusion as to who should be contacted if the card is lost. Other people may not have an address to send the card to, or not want to share their address. Then, of course, there are fees for withdrawing money, diverting project money into the banks.
A more serious issue is situating the guaranteed income within the “incredibly punitive” web of social welfare in America, Soon-Shiong told me. Organizations have to contend with the possibility of the benefit being counted toward income for applications such as food stamps, WIC, or Social Security benefits for disabled or low-income folks, despite many of the programs being temporary.
Despite these problems, at this point it is clearly established that forms of guaranteed income are often life-changing, and that people use the money on what they need the most. One of the first major pilots that took place in Stockton in 2019 reduced month-to-month income volatility, enabled people to look for full-time employment, and increased the health of recipients. When Democrats expanded the Child Tax Credit in the American Rescue Plan to (theoretically) all families, even those with no income, child poverty fell drastically.
The fact that low-income families benefit from more money is so obvious that one wonders why so many pilots are still trying to gather data to prove whether guaranteed income is worth the money and is a positive influence on the lives of recipients.
Elsewhere, some pilots simply have less space than there are potential recipients. The pilots are limited in funds and capacity, stuck juggling how to determine who is eligible and who needs it the most. The result is often a time-consuming application process for many who may not even end up being eligible. In Los Angeles County, the application for a three-year basic-income pilot called Breathe took an hour, as Business Insider reported. Six hundred thousand people applied for 1,000 spots, meaning that thousands of applicants wasted time applying, only to be rejected.
F4GI contends with all of these issues so that guaranteed income may be scaled up as efficiently as possible. It offers many forms of payment, from a prepaid card to Venmo. The application process takes just over a minute, and F4GI attempts to utilize databases that are already available to determine eligibility. And perhaps most important is the effort to determine how to make guaranteed and basic income actually happen, not rehash old data that decisively says such programs are effective.
However, even the best independent groups can’t possibly meet overall American needs. Only the government can do that—but there is little appetite for huge new benefit programs. Sen. Joe Manchin (D-WV) refused to support the Child Tax Credit expansion mentioned above, and it expired. Even if he had, the program had severe administrative problems that left many poor families out, as did the famous pandemic checks.
The number of applicants and pilots across the country signals the increasing popularity of guaranteed income. But for many, the policy’s popularity goes far beyond that of Yang, and even beyond the way the pandemic upended the lives of many people. Soon-Shiong references the ideals of the Black Panther Party and their aspirations for a form of basic income. Ex-mayor Michael Tubbs, who launched Stockton’s guaranteed-income program, drew inspiration from the writings of Martin Luther King Jr., who explicitly wrote about guaranteed income, as Smart Cities Dive reported in an interview with Tubbs.
“This is not a new idea,” Soon-Shiong said. “But it is the most talked-about policy that’s never been done before.”
