Momentum has grown for UBI-style programs
By Sarah Holder
Original article: https://www.bloomberg.com/news/articles/2021-12-28/the-u-s-cities-giving-residents-direct-cash-payments
At least 20 guaranteed income pilots have launched in cities and counties across the U.S. since 2018, and more than 5,400 families and individuals have started receiving between $300 and $1,000 a month, according to a Bloomberg CityLab analysis. If all these programs complete their pilot periods as planned, they’ll have given out at least $35 million.
These figures mark the close of a year of rapid growth for U.S. programs that give some residents direct cash payments, with a half-dozen other pilots promised to launch in cities next year. For many advocates, the concept of “basic income” has evolved from the more expansive UBI — a universal basic income to all residents — to more targeted guaranteed income programs that have the goal of narrowing inequality and dismantling poverty.
As local programs sprouted up in cities across the U.S. in 2021, more than 60 mayors joined a coalition to advocate for the policy in their cities and nationally. Among Democrats, at least, it is no longer considered radical to propose giving low-income residents money with none of the traditional strings of welfare attached. And at the national level, Congress engaged in its own temporary mass cash distribution program, in the form of stimulus checks to the vast majority of Americans.
Still, the local programs are small in scale and duration, and the nationwide push to expand them comes as the quest for a federal guaranteed income policy has not yet succeeded. The fate of the closest thing to it — the child tax credit — hangs in the balance. Since July, the U.S. government has sent eligible parents between $250 and $300 a month for each child they have. With Congress in a stalemate on the federal spending bill, the chance of extending the benefit, which is set to expire at the end of December, looks unlikely. And there is still significant debate among those on the left over whether the massive government investment it would require to take basic income national should be a higher priority than other social programs like universal health care or affordable housing.
So if 2021 was the year of guaranteed income experiments launching and capturing the national imagination, 2022 will be the year we’ll see if these local, targeted experiments can translate into long-term shifts.
“Five years ago, we were talking about robots; we were talking about the future of work; we were talking about jobs in theory just disappearing altogether because machines were going to take over,” said Chris Hughes, an original co-founder of Facebook (now Meta) and the co-founder of the Economic Security Project, during a December panel discussion hosted by the nonprofit. Now, he said, “we’re talking about a new social contract; we’re talking about basic questions of deservedness, of racial and economic justice, of what we owe one another.”
Research findings grow
As the first phases of many of these pilots come to a close in 2022, advocates will have a growing body of research from which to draw policy.
But these initiatives aren’t the first test cases of how basic income works. So research is expanding in scope, beyond the question of whether regular cash assistance helps — proponents are already convinced that it does.
“I think personally that the body of knowledge that we have is already sufficient to push for change in the safety net,” said Stephen Nunez, the lead researcher on guaranteed income at the Jain Family Institute.
“This is a market economy and if you give people money, they’re going to be better off almost by definition by having money. The better question is better off compared to what.”
Evidence from other countries and from U.S.-led cash assistance programs has found that the monthly support sometimes reduces work hours slightly, Nunez said, and increases positive health outcomes. Early research on the 2021 U.S. child tax credit shows that families overwhelmingly spent their extra cash on food and utilities; the Census Bureau also found that the first payment alone corresponded with a drop in food insecurity in households with kids. In Stockton, California, where a basic income trial ended at the beginning of this year, the research group also reported mood improvements, less income volatility, and more full-time employment than before the money — and compared to the control group.
But critics worry that the limited duration and scope of these programs mean they’re not test cases for expansion. Among the most persistent concerns is that a guaranteed income will deter people from working at all — an outcome undercut by a Finland experiment but hard to definitively disprove.
Many of the newer pilots are designed to test optimal designs for these programs — things like the best disbursement methods, the most effective ways to combine them with other social safety net programs, and how to communicate their worth to the public, said Nunez.
Some are designed as randomized controlled trials, where researchers track outcomes for both control and recipient groups. Others are experimenting with different payment methods and periods: Compton compensates families between $300 and $600, on a sliding scale based on their size; Newark, New Jersey, which is starting its second phase this month, is paying half its participants $250 on a bi-weekly basis, and the other half twice a year, in two $3,000 installments.
Time ranges vary, with San Francisco’s $1,000-a-month for 130 artists lasting 6 months, while Hudson, New York, is paying a random selection of 25 low-income residents $500 a month for 5 years.
And unlike a universal program, which would include everyone, regardless of class, many of these guaranteed income pilots are laser-focused on specific communities that have experienced historic disinvestment, or have been most impacted by Covid, such as Black mothers and fathers, artists and low-income families. Other programs still in their design phase will target unhoused youth and foster youth.
Still, advocates emphasize that they don’t view guaranteed income as a replacement for other components of the safety net, but a supplement. “We’re not UBI maximalists,” Nunez said. For the uninsured, for example, he believes insurance would go a lot further. “Cash is not a solution to market failures.”
Shifting poverty narratives
The other goal of these guaranteed-income pilots is to shift narratives about how to address poverty in the U.S., which advocates say has failed to recover from Reagan-era notions about “welfare queens.” The Nixon administration piloted and almost passed a national basic income policy for all but the wealthiest Americans that was supported by even conservative economists.
“If you go back and you read the research on that, and try to understand why it didn’t happen, it really does feel like it came down to this human instinct of fear, or lack of trust, or doubt, in how an individual might behave if you just give them cash,” said Jill Shah, president of the Shah Family Foundation, which funded a guaranteed income program in Chelsea, Massachusetts, that gave 2,040 households up to $400 per month during the worst of the pandemic. “Like, how could it be so simple?”
It’s not enough for progressive circles just to talk about the toll of economic inequality and the promise of guaranteed income, said Aisha Nyandoro, the CEO of Springboard To Opportunities, a nonprofit organization that runs the Magnolia Mother’s Trust, a program out of Jackson, Mississippi, that is now giving its third cohort of Black mothers $1,000 a month. “It cannot be work that is typically only held by organizations that are led by brown and Black individuals,” she said at the Economic Security Project panel.
Nyandaro remembers being asked what she wanted the headline to be if the Magnolia Mother’s Trust was successful. “I want the headline to be ‘we were wrong,’” she said. “Meaning that individuals recognize that the narrative that they tell themselves about Black women is wrong.”