by Guest Contributor | Mar 15, 2023 | News
By: Nika Soon-Shiong, Founder and Executive Director, Fund for Guaranteed Income
Less than an hour’s drive from the pristine homes of Beverly Hills, the tree-lined campuses of UCLA, and the booming heart of the entertainment industry, Compton faces an economic crisis. Of its 100,000 residents, 19.5% are living at or below the federal poverty line, compared to 11.6% nationally.
In the absence of well-paying jobs, its residents – 30% of whom are Black and 68%, Latinx – are ever vulnerable to the willful neglect of our threadbare safety net. Many are unbanked, uninsured, and at the height of the pandemic, one in five was unemployed. While Hollywood has capitalized on an image of Compton as the “murder capital of the United States,” profited off of Compton’s talent, its real story is one of resilience – a bold demand for dignity in the face of an illusory American dream.
In 2020, Former Compton Mayor Aja Brown called for an abolition of poverty in the United States. Building on the ideological foundation laid by Dr. Martin Luther King, she explained that this was neither niche nor “radical,” but a politics of care rooted in decades of empirical research. Since that day, we at the Fund For Guaranteed Income (F4GI) have worked tirelessly to advance that vision: building and scaling the technological infrastructure needed to disperse cash payments broadly, including to people historically excluded from the welfare state like undocumented and formerly incarcerated individuals.
Beyond economics and the pursuit of good public policy, our work is deeply human.
Our implementation of guaranteed income pilots began with the Compton Pledge, a two-year program supporting 800 low-income families in the cultural heart of California. Since launch, it has distributed $6 million out of a total allocated $10.2 million, which the Jain Family Institute projects will close 70% of the racial wealth gap for the average participating family. Additionally, The Compton Pledge has brought calls on the government to “pilot programs for universal basic income” into the national mainstream. Collaborating with independent researchers to study the impact of raising the income floor, we have been able to see first-hand the benefit of these cash flows on employment opportunities, mental and physical health, and the strength of these communities.
A mother of two with chronic illness was able to afford her medications; a woman subsisting on poverty wages was able to pay her bills, then invest the incremental time on finishing her degree. In essence, they were afforded the dignity we all deserve. We are actively working with participants to tell their stories, through narrative cohorts like The Voices of Compton Pledge (VOCP), reframing flawed and racist welfare stereotypes, and advancing a liberatory shift in paradigm.
Today, F4GI connects ~2000 low-income residents to cash, case management, and community resources monthly. New pilots have emerged in other cities, most recently Long Beach, where the Long Beach Pledge will provide 250 single-head families in one of the areas most devastated by COVID-19 with cash payments, $500 per month for one year, along with services like financial counseling intended to invest in their long term prosperity. It is made possible by the Long Beach Recovery Act, a plan to fund economic and public health initiatives for Long Beach residents, workers and businesses critically impacted by the COVID-19 pandemic. The City of Long Beach has partnered with F4GI to create the program’s payment platform, which connects qualified participants to support services like financial counseling, in addition to distributing the monthly payments.
Our work aims to be as nimble and innovative as the systems cementing poverty are sinister. We will continue to advance the evidence base around accessible welfare systems, develop the tools which can create them, and build the coalitions that will demand them. Forever grateful to the City of Compton for allowing us to implement this initiative, we aim to continue expanding our pledge across city lines, and eventually the nation.
by Peter Knight | Mar 10, 2023 | Events, News
“This panel invites contributors to elaborate discussions concerning the Basic Income theory and its connection with problematics in the fields of Ethics, Politics, Sociology, and Economics. There are central issues for this panel, which aim for multidisciplinary debates that should stimulate UBI studies in various disciplines.
Therefore, questions that play a key role in this discussion are the following:
- How can a UBI project tell us more about the potential environmental impacts, and the rise of inequality, unemployment, and poverty around the world?
- Which social policies should be proposed in coordination with the UBI aiming for higher welfare levels and environmental stability?
- What are the ex-post consequences of a UBI policy, either in the short, medium or long-term perspectives? How would it affect educational, health, and political spectra, and how does it influence individual freedom?
- How does one build political and economic conditions for a UBI policy to be approved and how do long-lasting projects impact governmental spending regarding public services?
- Would a Basic Income project be beneficial to Portugal when faced with the Portuguese socio-economic structure and challenges?”
For details on the panel and its call for papers, click here.
by Peter Knight | Mar 5, 2023 | News
Illustration above by Miguel Gutierrez Jr., CalMatters; iStock
“State and local governments, and some private funders, are launching dozens of pilot projects making direct, monthly payments to low-income residents to help meet basic needs. Researchers will study what happens next. Key question: will this money add to, reform, or supplant current welfare programs?
Four years after Stockton conducted a nationally-watched experiment, giving 125 households $500 a month with no strings attached, dozens of programs throughout California are testing the idea of a guaranteed income.
CalMatters identified more than 40 similar pilot programs that have run, are operating or are planning to launch around the state. They are sending certain groups of low-income people regular, unrestricted cash payments ranging from $300 to $1,800 a month for periods of six months to three years, depending on the program.”
Read more and search a database of the California pilots here.
by Peter Knight | Feb 13, 2023 | News
An article in the New York Times published February 13 states that “For recipients, it’s a lifeline. For liberal supporters, it shows how expanding government can make a difference. For conservatives, it’s a return to wasteful welfare handouts.”
“Chicago and the surrounding suburbs of Cook County are conducting the largest experiment of its kind in the nation, an effort to supply thousands of residents with a basic level of subsistence, not in the form of food, housing or child care — just cash. Ms. Lightfoot’s $31.5 million Resilient Communities Pilot selected 5,000 city residents in August to receive a guaranteed cash income for a year. The first $500 checks from a separate program, a $42 million county pilot, went out in December to 3,250 residents concentrated in the near-in Chicago suburbs.”
Read the full article here.
by Tyler Prochazka | Jan 17, 2023 | Featured
Taiwan is making history by sending out a one-time universal cash payment of $6,000 New Taiwan dollars (NTD) to every citizen “young and old.” This is the first time the country has implemented such a policy, and it comes as a result of excess tax revenue of $450 billion NTD, much of which is coming from corporate taxes that have seen record-high profits. $140 billion NTD will be dedicated to the cash payments, with the remainder going towards improving labor and health insurance systems and providing funding for local governments.
UBI Taiwan hailed the move as a victory for Taiwanese citizens, as the payment is unconditional and universal, meaning that everyone in the country will receive it, regardless of income or other circumstances. They said it reflects the growing demand that a greater proportion of Taiwan’s growth is shared with average families.
“This is a huge victory for the basic income movement,” UBI Taiwan founder Tyler Prochazka said.
UBI Taiwan promotes unconditional basic income (UBI) in Taiwan. UBI is a policy that periodically sends out unconditional cash payments to every citizen in a country regardless of an individual’s income or job status.
The organization has noted the problem of stagnant wages for the last two decades in the country and the rising cost of housing. Through basic income payments, they argue that many Taiwanese could pursue better opportunities and improve their education.
“Unconditional cash transfers are an efficient way to provide an ‘economic vaccination’ to make sure that everyone can face the future in a healthy and happy manner,” said Jiakuan Su, the new chairman of UBI Taiwan.
Over the last few years, Taiwan’s economy has experienced record-breaking 6.45% GDP growth in 2021 and over 8.73% growth in exports in 2022. However, most people have not enjoyed the fruits of this economic growth, as a 104 Job Bank survey found that real wage growth was nearly zero in 2022 due to inflation. The universal cash payment is a way for everyone to have a small share in Taiwan’s economic success.
“With the rise of the pandemic over the last few years, Taiwan has experienced rapid changes in its economy and society,” Su said. “We have experienced directly why Taiwan needs a resilient social welfare system to protect each person’s economic security.”
Since the payment is equal to all taxpayers, it will have a progressive effect with a greater proportion of the refund going to low-income earners. There is some expectation that the cash payment could help stimulate the economy because low-income households are more likely to use the money to satisfy their essentials, such as food and housing, freeing up some additional discretionary money for recreational uses as well. A greater willingness to spend by average families could help smaller businesses that may have struggled since the pandemic.
Both political parties have agreed on the general outline of the proposal and the cash could be sent out as soon as February. A surprise has been that the plan appears to be a universal rebate of the revenue instead of a targeted one, which will make it easier for everyone to apply and reduce administrative costs and time. One area still under consideration is whether foreign taxpayers will receive any of the money.
Previous cash assistance schemes during the pandemic were targeted and a stimulus voucher was sent universally. The pandemic vouchers were limited in how they could be spent and had an expiration date, similar to the vouchers under former President Ma Ying-Jeou.
Members of the Kuomintang (KMT) and Taiwan People’s Party (TPP) argued during the pandemic that cash should have been sent out instead of vouchers. At the time, the TPP held a news conference with UBI Taiwan to discuss the benefits of cash over vouchers. Many also complained that the targeted cash programs were difficult to receive because of the strict conditions.
Research by the World Bank later demonstrated that the simplicity of universal and unconditional cash payments during the pandemic increased access to the assistance and likely provided economic stimulus. Previous research showed a multiplier effect up to $2.6 for every dollar sent. Fears of saving the cash were largely overblown. For example, in over a dozen economies primarily in East Asia, 40 percent of the universal cash transfers during the pandemic were directly used for consumption.
Besides improved standard of living, research on basic income consistently shows improved mental health and trust in society. A meta-analysis of basic income policies looked at eight governmental reports as well as seven peer reviewed studies. They found there was justification that the alleviation of stress from financial instability could be a reason for improved mental health from basic income.
There have been criticisms of the current cash payment plan, including concerns about inflation. However, it is important to remember that this is surplus tax revenue that has already been collected and is not new money created by the central bank. An effect on inflation is just as likely if the government directly spends the money or if it is sent back to taxpayers.
Additionally, while it is true that Taiwan’s insurance systems require further reforms for sustainability, the vast majority of the surplus revenue is being used to shore up these systems and provide an emergency fund. A one time injection of funds is helpful but will not save these systems in the long run.
Previously, basic income advocates from UBI Taiwan have suggested that Taiwan could establish a sovereign wealth fund (SWF). Such a fund would act as a guarantee that Taiwanese could enjoy more equity in the growth of Taiwan’s economy even if wages remain stagnant. Excess revenue could be placed in the SWF and invested in the economy, with dividends from the SWF distributed back to the people each year, similar to the system in the US state of Alaska. The Alaska Permanent Fund sends out a yearly payment from the oil revenue generated in the state. In 2022, the universal payout reached a record high of $3,284 USD.
“I applaud the government’s decision to send the universal cash transfer and hope this establishes the precedent for Taiwan to consider making this a permanent policy,” Su said.
Prochazka furthered that by making this payment equal to all citizens, the government is taking the “first small step” towards ensuring that the benefits of economic growth are shared by all.
