by Sara Bizarro | Nov 21, 2017 | News
Stockton, California and Mayor Michael Tubbs announced plans for a Basic Income trial – the Stockton Economic Empowerment Demonstration (SEED). The project is still in its initial stage, and the design phase of the project will be launched in January 2018. The design period will last 6 to 9 months, and according to a Sukhi Samra, representative of the SEED project, the design phase is being used to “solicit community input and to ensure that SEED is really reflective of the needs of the Stockton community.”
The concrete outline of the project is still in the early stages, but there are some starting points. The basic income stipend will be $500 per month and will apply to anywhere from 25 families for 5 years to 100 families for 1.5 years. The project has secured a $1 million grant from the Economic Security Project and a grant from the Goldhirst Foundation of $250,000 which was announced last Thursday. The project also hopes to be able to raise additional funds. According to the guidelines in the SEED website, the demonstration will gather both research and storytelling partners, and those who are interested in participating can follow the info here. The site also states the project will prioritize high quality data with the cooperation of academics and academic institutions, while also engaging in storytelling, encouraging documentary filmmakers and creative storytellers to join the team.
The city of Stockton has had a difficult past. In 2012, it became the first city in the United States to file for bankruptcy. Since then, the city has been recovering, but it continues facing important challenges since 1 in every 4 residents still live below the poverty line. Mayor Michael Tubbs became the youngest Mayor in history, and the first African American Mayor of Stockton, in 2017. He has a progressive agenda in many areas, and the Basic Income demonstration is intended as a way to show what happens when a group of people have an income floor that is guaranteed. Stockton will be the first public/private trial in the United States with significant leadership from a public official. Mayor Tubbs is inspired by Martin Luther King Jr. who defended a guaranteed basic income. Tubbs is interested in finding out “if a guaranteed income will unleash potential and provide the needed stability.”
More Info:
Stockton Economic Empowerment Demonstration Website.
Economic Security Project.
Dylan Matthews, ”Three years ago, Stockton, California, was bankrupt. Now it’s trying out a basic income”, Vox, October 18, 2017
Alexis C. Madrigal, “Free Money at the Edge of the Tech Boom”, Atlantic, October 19, 2017
by Sara Bizarro | Nov 18, 2017 | News
Peter S. Goodman, a veteran economics journalist, wrote a comprehensive piece about the recent Basic Income developments for the New York Times. In this piece, Goodman refers to the main motivations behind the idea of Basic Income as including the current wage stagnation, the lack of jobs to support the middle class and the threat of automation. The idea, Goodman says, is “gaining traction in many countries as a proposal to soften the edges of capitalism.” Basic Income can be use to insure “food and shelter for all, while removing the stigma of public support.”
The article also refers to several Basic Income experiments currently underway. In Europe, the article includes the experiments in Finland, Netherlands and Barcelona. In the USA, the article mentions the experiments being prepared in Oakland and Stockton, CA. Also mentioned are the Canadian experiment in Ontario and the experiment in Kenya organized by Give Directly.
Regarding how to finance Basic Income, Goodman says that the cost of Basic Income is a simple multiplication of amount of money distributed by the amount of people. He says: “Give every American $10,000 a year — a sum still below the poverty line for an individual — and the tab runs to $3 trillion a year. That is about eight times what the United States now spends on social service programs. Conversation over.” This argument however, has been challenged by several Basic Income researchers, including Karl Widerquist, who is was interviewed and quoted in the piece. In his paper “The Cost of Basic Income: Back-of-the-Envelope Calculations”, Widerquist says that the cost of Basic Income is “is often misunderstood and greatly exaggerated.” In the paper, Widerquist argues that a Basic Income of “$12,000 per adult and $6,000 per child with a 50% marginal tax rate” would cost “$539 billion per year: about one-sixth its often-mentioned but not-very-meaningful gross cost of about $3.415 trillion.“
Beyond the issue of financing, the article covers a lot of ground regarding current discussion of Basic Income and its motivation, as compared to other social security schemes. Goodman refers to the bureaucracy of social support and the poverty trap, when “people living on benefits risk losing support if they secure other income” and the idea that “poor people are better placed than bureaucrats to determine the most beneficial use of aid money.” The article also refers to the left wing worry that Basic Income could be an excuse to cut social programs, “given that the American social safety programs have been significantly trimmed in recent decades.”
The piece closes with an acknowledgement that Basic Income “appears to have found its moment” and a quote by Guy Standing, saying that, “The interest is exploding everywhere, and the debates now are extraordinarily fertile.”
More information:
Peter S. Goodman, “Capitalism Has a Problem. Is Free Money the Answer?”, New York Times, November 15, 2017
by Kate McFarland | Nov 8, 2017 | News
In an interview with BBC News, Nobel Laureate economist Joseph Stiglitz warned that basic income (citizen’s income) should not be the current priority of the Government of Scotland.
On September 5, First Minister Nicola Sturgeon announced that the Scottish Government would provide funding for basic income trials in the regions of Fife, Glasgow, North Ayrshire, and Edinburgh, where pilot studies of the policy had received the support of local authorities.
During October’s Inclusive Growth Conference, Sturgeon reaffirmed the government’s commitment to supporting trials of basic income, despite acknowledging that the policy might prove infeasible in the end:
Despite the fact that this has some critics, we are going to work with interested local authorities to fund research into the feasibility of a citizen’s basic income scheme.
I should stress our work on this is at a very early stage. It might turn out not to be the answer, it might turn out not to be feasible.
But as work and employment changes as rapidly as it is doing, I think it’s really important that we look and are prepared to be open-minded about the different ways in which we can support individuals to participate fully in the new economy [1].
Stiglitz, who has served as an economic advisor to the Scottish Government since 2012, believes that pursuing a basic income would represent misaligned priorities in light of Scotland’s fiscal constraints. Instead, the distinguished economist urges the government to prioritize benefits targeted to those who need them most, job creation to ensure a job to all who want one, and a livable income for all who work full-time.
When asked about the UK’s interest in basic income during an interview with the BBC’s Sunday Politics Scotland, he replied:
I think the point of a citizen’s income is that it recognizes rights of ordinary individuals–that supporting individuals, social protection, is not aimed at those who have been left behind, but is a basic part of our society.
But I do worry about two things. One, as you say, there are fiscal constraints. Should the scarce money be used to give everyone a basic amount, or should it be targeted at those who have particularly strong needs? I think there needs to be some targeting.
Secondly, over the long run, our responsibility as a society is to make sure that everybody who wants a job can get one. And the underlying problems of the lack of employment and lack of adequate pay–anybody who works full time ought to have a liveable income–those are the issues that, in the long run, we need to address.
Stiglitz has previously been hailed in the basic income community as one of a long Nobel-winning economists who have (reportedly) endorsed basic income. His presumed endorsement took place at the World Summit on Technological Unemployment in February 2015, when he was asked if he supported basic income as a policy response to technological unemployment, and replied “Yes, that’s part of the solution,” before going on to stress that basic income alone is not a complete solution.
In October 2016, Stiglitz again said that “the idea of a basic income is a good idea” in response to a question from Vox reporter Ezra Klein (“What you do think about a universal basic income in America?”). He added, however, that he had not yet made up his mind about the question of whether it is better to target limited resources to those most in need:
If you don’t have a lot of resources, isn’t it better to try to target the limited resources you have at those who really, really need it, the people who are disabled, the people who are elderly without other sources of income, a variety of people who are seriously disadvantaged. The problem with the universal basic income is that you give a flat amount to a large amount of people, and that means, because you have so many people, you can’t give as much as you would to help those who most need it.
He went to note that, “on the other side of the coin, those who most need it have difficulty in navigating the bureaucracy” — a problem that would be avoided by a basic income.
It appears, then, that Stiglitz has not changed his mind on basic income so much as determined that, in Scotland and the UK, fiscal constraints and the need for targeted benefits outweigh the advantages promised by universality.
Watch Stiglitz field a question basic income on Sunday Politics Scotland:
[1] Quoted in Tom Martin, “Sturgeon vows to press ahead with radical benefits overhaul, despite official warnings,” Express, October 21, 2017 (accessed October 27, 2017).
Photo: “Old Scotland” CC BY-NC-ND 2.0 Tatters ✾
by Cordelia Holst | Nov 6, 2017 | News
On Thursday, October 19th, activists, social justice advocates, economists, futurists, venture capitalists, writers, community organizers and politicians gathered at the Old Mint in San Francisco – a symbolically poetic building – to talk about Cash. Organized by the Economic Security Project, the goal of the conference was to “reimagine what an economy built on the well-being of everyone could look like.”
Cara Rose DeFabio and Sandhya Anantharaman were the MC’s for the day, introducing each segment, panel or presentation, showcasing a range of thoughts around how cash transfers can shape society. See the full schedule here.
The conference embraced a range of reasons why giving cash through a Universal Basic Income is an appealing concept. Most segments were in a panel format with experts in their field, moderated by one of their own. This allowed participants to see the differences in thinking across the movement as well as its broad appeal, regardless of what brought these thinkers into to the movement. The first panel was a discussion on automation’s effect on the work force, and how UBI could provide economic security during retraining, between jobs, or to supplement part time work. Another panel, with representatives from three different venture funds, discussed how a UBI might encourage entrepreneurship, while a third panel talked through historical and current systemic racist and sexist policies and practices, and how a combination of a UBI plus a wealth tax to help fund it could course correct extreme inequality.
A general acceptance for the benefit of cash transfers seemed to be the most basic common denominator. The audience was educated on the results of past cash transfer and basic income experiments, as well as updates on current experiments. You can view a high level video of some of the outcomes of these experiments here.
Mayor Tubbs of Stockton talked about his plans for a UBI in his city. Elizabeth Rhodes also gave an update on the Oakland Y-Combinator project. Then Joe Huston, CFO of Give Directly spoke to the effectiveness of cash transfers and positive outcomes in their work in Kenya and Uganda. He announced that Give Directly is now involved in its first US based project, where they are giving debit cards with $1500 directly to victims of Hurricane Harvey in the Houston area. He noted the work that still must be done changing perceptions around what people will do when they are given cash unconditionally, joking that employers don’t say, “I would like to give this employee their bonus, but I’m worried they might drink it away,” yet this is somehow common thinking that needs to be changed based on research results.
Aisha Nyandoro, CEO of Springboard to Opportunity spoke about where the current Welfare system in the US fails. She illustrated the challenges that families living in poverty in Mississippi have piecing together welfare benefits from the government – housing voucher, electricity voucher, and food stamps. The system creates poverty traps and the benefits don’t cover many of the real needs these families have, but cash would. Cash would also limit interaction with the system and remove the feeling of being judged, as well as the stigmas around welfare.
Damareo Cooper, Director of the Ohio Organizing Collaborative shared his personal story also highlighting how the current welfare system and prison system fails children and young people, making a convincing case for switching to cash. Almaz Zelleke, professor of Political Science at NYU Shanghai, went further, explaining why a UBI must be paid as cash and not a negative income tax.
Throughout the day, however, there seemed to be a lack of consensus on aspects surrounding universality and unconditionality of a cash transfer policy. The range of standpoints could be seen clearly in a panel with Hawaii State Representative Chris Lee and Alaska State Senator Bill Wielechowski, as well as Joseph Sanberg, the founder of Golden State Opportunity Foundation. Bill educated the audience on the Alaska permanent fund. On the aspect of Universality and Unconditionality he said, “Universality is critical. If the policy was needs-based it would diminish it. The fund is framed as each resident’s ownership of shared resources. This is something that Alaskans share together.”
On the other side of the issue, Joseph Sanberg said, “The social contract is work and you will be able to have economic security.” He tied work requirements to the right to economic security and his efforts have been focused on California Earned Income Tax Credits.
Chris Lee from Hawaii seemed to be working out his state’s position on the issue, noting that for their Earned Income Tax Credits they have expanded the definition of work, looking at where people are spending their hours – for example, caregiving. He did note that his task force is looking at a universal benefit across all economic classes.
Aisha Nyandoro cited the work she does as evidence that work requirements are difficult and policy makers are out of touch on the issue. She invited any policy makers that wanted to get in touch to call her. Anne Price, President of Insight Center for Community Economic Development, explained how racism and sexism shaped current welfare policy around judging who is deserving and who is undeserving. She noted that it is degrading to be on the receiving end of morality, and shared her vision for dignity for all: universal benefits – working or not.
How to pay for it was touched on by some, with ideas ranging from a wealth tax to combat inequality, to a shared patrimony dividends, like Alaska, or some combination of these revenues.
Other highlights of the day included a session by Jane McGonigal from the Institute for the future, and A Frank Conversation about Money with Chris Hughes, co-founder of Facebook and Co-Chair of the hosting Economic Security Project. Jane coached the audience on how to create empathy for our future selves and envision a future with Universal Basic Income. Anna Sale from “Death, Sex, and Money” interviewed Chris Hughes about his thoughts and feelings around his own fortune and why he supports Universal Basic Income.
The organizing team is clearly very competent and professional, as the entire conference ran very smoothly from check in, AV, lunch, and seating. All details were thought out and executed well. Participants had many opportunities to make connections and discuss the themes.
All in all, this was a very important gathering for the movement.
by Claire Bott | Nov 3, 2017 | News
A short-term universal basic income (UBI) pilot in India has been found to have positive effects years after it concluded, according to a recent follow-up study. Researchers who returned to the villages involved in the original pilot study, which took place in 2012-2013, found that many of the improvements caused by a year of basic income had been wholly or partially maintained.
In a few cases, there had even been what are called “momentum effects”, in which behaviour changes due to the year-long UBI had continued to build during the intervening years. For example, in the original study, it was found that, prior to the provision of the UBI, women (or “the spouse of the head of the household” as it is expressed in the report) made decisions on how to spend money only about 9% of the time. At the end of the original study, women were making monetary decisions nearly a quarter of the time, while in the recent follow-up, this had gone up to virtually one-third of the time.
Other instances where positive and long-term effects have been maintained well after the end of the subsidy include an improvement in regular income (related to using the UBI to invest in farming equipment or to set up businesses), and a considerably larger percentage of girls in education.
However, there are also some areas where the effects of the UBI have been found to have been rolled back over the years. One of the most prominent of these is in the area of indebtedness. In the original study, the villagers who were provided with the UBI found that 70% had reduced their debt, but the new study found that there is no longer any statistically significant difference in indebtedness between those who had received the UBI and those who had not.
The study also includes a number of case studies and quotations, including one from the head of the village school, who stated, “The experiment gave a major push to the economy of the village in many ways. In front of my eyes, I could see things changing. Equally, I have also noticed a major positive behavioural change in these people because of that experiment.”
The original study, which was a pilot to test the effects of UBI, involved nearly 140 people in two villages, one of which was provided with a UBI and one of which acted as a control. Every precaution was taken to ensure that the two villages were as similar as possible in all socio-economic characteristics.
The study’s authors include Guy Standing, who is a Professorial Research Associate at SOAS University of London and co-founder of BIEN, as well as Sarath Davala, a sociologist who co-wrote a book entitled Basic Income: A Transformative Policy for India with Standing and Renana Jhabvala, another of the study’s authors. The report concludes by recommending that further UBI pilot studies take place, that existing welfare studies be analysed, and that an Independent Commission on Universal Basic Income is established.
Asked to comment, Davala provided the following statement: “We went back after four years to the same village that received Basic Income for a year in 2012. It was heartening to see that some of the effects still continued when we compared with the situation in the control village. So, what does that show? That unconditional basic income payments have a deeper psychological impact, and that even when they are given for a short period like a year, they do leave a lasting positive impact. They provide people with a sense of economic security. This is a very valuable insight for us and policy makers.”
