You may have seen it in the news recently that the experiment with guaranteed income in Stockton, CA has come to an end. 125 people received $500 a month, no strings attached. A control group who did not receive the money but were in the same socio-economic class as the recipients was also monitored. Which is what makes this experiment so unique: there is data to analyze. Oh wait, that doesn’t make this unique. It’s been done before. And is being studied elsewhere currently. But anyways, the results are once again, positive. I’ll provide the quick summary on the points people care about:
The majority of the $500/month was spent on necessities: food, rent, utilities. Because this matters to people: less than 1% went towards cigarettes and alcohol.
The money encouraged employment: The full time employment rate among the group receiving the money increased by 12%.
These results are not surprising. This matches up with prior studies, both in Canada and under President Nixon. When people have some money they can use to buy groceries and pay rent, they do something surprising: they attempt to better themselves. They go take classes. They pursue certification. They buy a suit. They look for a better job. This has now been documented in 1960’s America, 1970’s rural Canada and 2019 California.
It is worth pointing out that this was an experiment in guaranteed income which isn’t universal basic income. UBI is what I am in favor of and not guaranteed income. The main reason is if it is guaranteed income, then there are thresholds for qualification and disqualification and that can easily turn into another welfare system which encourages poverty and government dependence. That is what our current system in America currently does: encourages poverty and government dependence. And this isn’t a politically driven polemic, I write from painful first hand experience. I used to help run a business which, because of the salary, employed people on welfare. Because I believe very strongly that people should receive a living wage we instituted a raise for everyone. And something unexpected happened: I was asked to please not give them a raise. I’ll never forget this individual coming to me and explaining that they want to work and they want to provide for their family. However, this raise would push them over a threshold set by the government and they would lose all assistance and this raise ($.50 an hour) would not cover all of the assistance they would lose. And then this individual started to cry and said, “I want to work but the government wants me to stay poor.”
UBI doesn’t encourage people to remain in poverty or stay dependent upon the government because there are no strings attached.
There is no stigma attached to receiving it because it is universal.
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