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A California city is launching the first US experiment in basic income — and residents will get US$6,000 a year

For a period of three years, a select group of residents will receive US$500 a month, no strings attached

PUBLISHED : Thursday, 19 October, 2017, 4:33pm
UPDATED : Thursday, 19 October, 2017, 4:40pm

By Chris Weller

Stockton, California is expected to become the first US city to launch an experiment in universal basic income, a system of wealth distribution in which people receive a set amount of money just for being alive.

Stockton Mayor Michael Tubbs said that by August 2018 he hopes to enrol an undisclosed number of Stockton’s 315,000 residents in the programme. Tubbs said the experiment — which is set to hand out US$500 a month, or US$6,000 a year — would ideally last for a period of three years.

A radical system gets government approval

Stockton is a unique candidate for basic income, which has gained traction over the past few years as a solution to poverty and a safeguard against the looming threat of robot automation.

Tubbs is 27 years old. When he was elected last year at 26, he became the youngest US mayor in a city of more than 100,000 people. The city he oversees — technically an exurb, about 50 miles east of Berkeley — became the first in the country to file bankruptcy, in 2012. It is still very much in recovery.

Tubbs credits his rough-and-tumble upbringing as part of the inspiration for pursuing a creative, if radical, solution to poverty. “When things came up unexpectedly it would cause a lot of hardships,” Tubbs told Vox.

That background was mixed with Tubbs’ admiration for Dr. Martin Luther King, Jr., who himself had proposed a guaranteed minimum income for all citizens in 1967. King advocated for basic income “so we can bring to the attention of our nation this need ... which I believe will go a long, long way toward dealing with the Negroes’ economic problem and the economic problem many other poor people confront in our nation.”

Many of Stockton’s residents face similar economic hardship today. The median household income of US$44,797 falls well below California’s state median of US$61,818, and the unemployment rate of 7.3 per cent is nearly double the national rate of 4.3 per cent.

Planting a SEED

Tubb’s plan is known as the Stockton Economic Empowerment Demonstration, or SEED. It’ll be financed primarily through the basic income advocacy group Economic Security Project (ESP), which is pledging US$1 million to launch and help finance the experiment.

ESP was founded in December 2016, in part by Facebook co-founder Chris Hughes. The $10 million project is backed by more than 100 of Silicon Valley’s biggest names, including eBay founder Pierre Omidyar.

SEED is the first government-organised basic income experiment in the US. Other non-government-run projects include studies in Kenya, the Netherlands, Oakland, California; and Ontario, Canada.

In Kenya, the charity GiveDirectly has issued cash transfers for the past several years; its basic income trial began in October 2016. In Oakland, the startup accelerator Y Combinator just wrapped a pilot study in which several people received US$1,000 to US$2,000 a month. YC is preparing to launch a larger trial across two states sometime in 2018.

Basic income is so new that researchers have yet to collect good data about the system in the developed world. Stockton’s experiment could provide unprecedented insights about basic income and how it causes people’s behaviours to change.

Sceptics often claim a basic income could sap people of their drive to work, or cause them to spend more on vices, while advocates say the extra cash will help people go back to school, start businesses, and otherwise become more productive members of society.

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