by Andre Coelho | Oct 10, 2018 | News
There is a plan for distributing dividends, unconditionally, for all Americans. It has been coined as the Social Wealth Fund (SWF), an idea developed and pushed by the People’s Policy Project (3P) founder Matt Bruenig, a known lawyer, blogger and policy analyst in the United States. 3P is a think tank founded in 2017, focused on studying policies benefiting citizens at large.
This plan, described in greater detail in a booklet, rests on the idea of turning national a kind of wealth fund such as the Alaska Permanent Fund (APF). However, unlike the APF, the SWF would have to rely on other sources of revenue (other than oil). Bruenig’s suggestions range from voluntary contributions, managing state-owned physical assets through the fund, various kinds of taxes (including eliminating tax breaks for the rich), leveraged purchases, to monetary seigniorage. This income is supposed to come from the highest earners in society (ex.: corporate taxes, financial taxes, philanthropy, stock exchanging), distributing it by all people.
Peter Barnes, an advisor to the Economic Security Project, has written about the SWF. According to him, the SWF is “refreshing”, because apparently none of the past policies have solved or even reduced inequality, such as “greater funding for education, infrastructure investment, low interest rates, a higher minimum wage, trade wars, tax cuts, or even a federally guaranteed job”. The inequality problem runs deep in society, and that’s where an unconditional dividend distribution of commonly owned assets could really be effective.
As for distributing dividends, Bruenig’s idea is to set this as a percentage of a five-year moving average of the fund’s market value. This could equate to a withdrawal rate of, say, four or five percent. If, at a given moment, the total fund value is $10 trillion, then the available dividends for distribution are $400 billion (Note 1).
On an article published by Anne Price and Jhumpa Bhattacharya, on wealth funds and racial inequality, the concept is summed up nicely:
“Often referred to as a Social Wealth Fund, Citizens Wealth Fund or Sovereign Wealth Fund, this concept rests on the principle of shared ownership, and builds from the foundational vision that all Americans have a right to reap benefits from wealth that we all created together.”
Note 1 – billion = 1 thousand millions
More information at:
Matt Bruenig, “Social Wealth Fund for America”, People’s Policy Project, 2018
Peter Barnes, “Opinion: All Americans would get an income boost under this new plan to share the country’s riches”, Market Watch, September 10th 2018
Anne Price and Jhumpa Bhattacharya, “Why a Social Wealth Fund Must Account for Racial Inequity”, Medium, September 19th 2018
by Andre Coelho | Sep 15, 2018 | News
Chicago’s City Hall building green roof. Picture credit to: Urban Matter
Earlier this year, the city of Chicago hit the news by introducing a resolution that would summon a taskforce to run and study a basic income trial within the Municipality. That resolution, put forth by Alderman Ameya Pawar, included the summoning of stakeholders, foundations, philanthropists and academics, to develop a basic income trial model providing an unconditional $500 /month to one thousand families in Chicago. This was in addition to the restructuring of the Earned Income Tax Credit (EITC), which will in itself be a subject of study.
That initiative received opposition from the Chicago Tribune, the most popular newspaper in the city. The paper published an editorial where it argued that the basic income trial was unaffordable and that Chicago officials should instead be finding ways to “raise incomes among working-class and poor residents”. Among the alternatives (to a basic income, experimental or full-fledged), the editorial referred to the deregulation of the private sector, which would “generate employment and boost incomes”.
Despite this opposition, Chicago leaders, including Mayor Rahm Emanuel and Alderman Ameya Pawar, just announced (through the Economic Security Project (ESP) the formation of the taskforce to which the resolution referred, having been called the Chicago Resilient Families Task Force. This cutting-edge group will explore and coordinate the basic income trial in the city, relying on an EITC modernization, which is how they will provide the monthly benefits to recipients.
The referred Task Force, in which the ESP is also investing, will be co-chaired by Tom Balanoff (Service Employees International Union President in Canada) and Celena Roldan (CEO of the American Red Cross of Chicago and Northern Illinois), and will include “civic, religious and community leaders in addition to elected officials and academics”. It will produce a report with specifications on the basic income trial, and put forward policies to reduce poverty and rise middle-class citizens incomes.
After Stockton, Chicago is now paving the way for furthering basic income in the United States, amidst a choir of opponents (including the above mentioned Chicago Tribune editorial and others).
More information at:
Kate McFarland, “CHICAGO, US: City Considers Resolution to Investigate Basic Income Pilot”, Basic Income News, July 24th 2018
Kate McFarland, “US: Chicago Tribune against basic income for the City”, Basic Income News, August 12th 2018
Peter Kotecki, “Chicago could be the largest US city to launch a basic income pilot — here are the other major experiments around the world”, Business Insider, July 23th 2018
Kate McFarland, “STOCKTON, CA, US: New Details Revealed in Planned Basic Income Demonstration”, Basic Income News, August 23rd 2018
Rowena Itchon, “Basic income comes to Stockton”, Pacific Research Institute, February 5th 2018
by Daniele Fabbri | Sep 11, 2018 | News
Annie Lowrey. Picture credit: ComedyCentral, The Daily Show
AUDIO: Annie Lowrey on Basic Income Podcast
Annie Lowrey, policy reporter for the New York Times and author of the book “Give People Money: How a Universal Basic Income Would end Poverty, Revolutionize Work, and Remake the World” joined the Basic Income Podcast to discuss her book and its reception.
In her interview with the hosts, Jim Pugh and Owen Poindexter, she says that in her book Universal Basic Income (UBI) is approached from a journalistic point of view, so as to benefit a generalized audience, or people who are not yet experts on the subject and may or may not have heard about it. She didn’t try to address only and directly UBI, but her effort was directed toward the ideas that intersect with UBI, creating a book that is intended to be, in her words:
“like a jungle gym where people could come and think and explore and didn’t feel like they were in a position to be persuaded as or not, so much as they were there to kind of get their minds expanded”.
Regarding the book’s reception, she says that while feeling pleased with the attention it received, there are still a lot of knee-jerk type of reactions, with the words “just give people money”, as eye-catching as they are, often hitting rooted believes and eliciting instinctive negative emotions. She believes, however, that there is still room for dialogue, as the movement for UBI has gained tremendous momentum. According to her, the Overton Window is opening, meaning that the vocabulary surrounding the subject is becoming acceptable, and the policy of UBI can be discussed publicly, and even accepted. A factor which could accelerate this process is, in her opinion, a possible recession of the economy: facing the accelerated effects of the great decoupling (when the increase in GDP and productivity is not matched by the increase in wages and occupation) would give a boost to the talk about UBI.
In the podcast, Lowrey also comments on the great variety of themes which are connected to UBI, and which make it possible to look at it from a myriad of different angles. From the economic standpoint, what she finds particularly interesting is what is counted and not counted in an economy. Categories of unpaid work, for example domestic labour inside the household go unnacounted, and that production could be compensated through the introduction of an UBI.
Noticing how the United States lack a safety net as robust as some other similar level income OECD countries, Lowrey states that the problem of racism certainly had its weight: “I do think that racism explains a lot of the welfare chauvinism that you have in the United States, a lot of the judgment of lower income folks.” She reasons that UBI, not being about requirements, but universal in nature, would also address the problem of discrimination.
Asked how she feels about the UBI movement right now, Lowrey says the United States are both close and far away from the introduction of a UBI. Even with Obama speaking favorably about it, and with news of possible upcoming trials emerging every other day, there are many difficulties left such as the requirement of funding, which is not easy to meet at the state level. Nonetheless, some states could take their Temporary Assistance for Needy Families (TANF) programs and turn them into an unconditional cash grant for children, she suggests.
“I would love it if you could get some kind of laboratory of democracy effect where you would have something smaller that could scale up that could really convince people it was a good idea”.
At the federal level, though, she thinks that it is more probable that some policies contaminated by the idea of UBI are put into practice, like a negative income tax or an Earned Income Tax Credit expansion. While she expects something along these lines to be proposed in the 2020 presidential campaign, she would be surprised if it was actually UBI.
More information at:
“Bringing UBI into the Public Discourse”, Basic Income Podcast, July 20th,2018
by Guest Contributor | Aug 24, 2018 | News
In an article published on medium, with the title “How Not to Bungle the Revolution”, Conrad Shaw, who is working at the Bootstraps project, a docu-series following the stories of 21 Americans receiving an unconditional income supplement for two years, explores the evolution of the discourse surrounding universal basic income (UBI) in relation to the Federal Job Guarantee.
Shaw addresses progressives, warning them that the Federal Job Guarantee (JG), an idea presented as an alternative to Basic Income, is actually misguided.Answering some common questions about UBI, he tries to demonstrate that what makes JG a more appealing solution is mostly appearance. This appearence is given by the perception that it would let people gain purpose from their job, wouldn’t make the government as huge as UBI would, wouldn’t subsidize bad jobs, wouldn’t create inflation, wouldn’t give money also to the wealthy and, mostly, that it is more politically feasible.
Shaw examines the former statements, explaining how UBI isn’t a free handout of money, because it’s a redistribution of what it has been gained through the use of common resources, how it doesn’t subsidize bad jobs, but gives contractual strength to employees. In Shaw’s words: “UBI is like an individual strike fund for every worker.” According to Shaw, it wouldn’t boost unemployment, because, among other reasons, it is within human nature “to grow, to live comfortably, to have new experiences, and to thrive. Nobody wants to stare at a wall in a crappy apartment for 80 years, eating cheap grocery food, just because it’s possible.”
Even if UBI is also directed toward the rich, he continues, it actually acts as a mean of redistribution from the income top to the bottom, and whilst JG would make people dependent from the government, UBI is a mean to make bureaucracy extremely leaner. A FG, on the other hand, would mean a great deal of increase in bureaucracy, and most importantly, leave a lot of open questions about the actual possibility of matching skills with jobs.
Shaw gives particular attention to the subject of political feasibility. JC, he says, may sound as more feasible, but it the mere continuation of an existing paradigm, since it hasn’t the innovative strength of UBI. It must not be proposed as an alternative to UBI, because it lacks its transformative power and wouldn’t bring the same degree of change. However, there is nothing forbidding their combination. UBI nonetheless needs to be the first step, the foundation of safety on which to build, to which later on possibly add the job guarantee, as their combination would not lead to additional costs, because they partially overlap, but would allow for the leveraging of the benefits.
He predicts that given the growth of the movement supporting UBI, it will be one of the main themes at the elections in 2020, and as more trials are completed and the problem of automation becomes clearer every day, the discourse supporting UBI will only gain momentum. Given that, he recommends not to compromise, as accepting a FG in lieu of a UBI would wreak that momentum.
More information at:
Conrad Shaw, “How Not to Bungle the Revolution”, Medium, June 12th2018
by Kate McFarland | Aug 23, 2018 | News
Photo: Newberry Building in downtown Stockton, CC BY-NC-SA 2.0 Onasill ~ Bill Badzo
A new discussion paper, released on Monday, August 20 by Mayor Michael Tubbs and the Stockton Economic Empowerment Demonstration (SEED) team, reveals details of the design of the basic income pilot planned for launch next year.
Stockton Mayor Michael Tubbs
Following in the heels of Silicon Valley’s Y Combinator, the mid-California City of Stockton announced in October 2017 that the municipality was readying a privately financed basic income pilot.
The project arose out of collaboration between Mayor Michael Tubbs and the Economic Security Project (ESP), an initiative founded in California in the previous year to support work related to basic income and cash transfers in the US.
Called the Stockton Economic Empowerment Demonstration or “SEED”, the program will provide approximately 100 Stockton residents with unconditional cash payments of $500 per month for 18 months.
ESP supplied a $1 million foundational grant to launch SEED, which would be followed by major contributions from such donors as the Future Justice Fund, the Goldhirsh Foundation, tech entrepreneur Serkan Piantino, and Facebook co-founder Andrew McCollum.
To prepare a study of the effects of the cash payments, the project has recently enlisted the assistance of two scholars: Dr. Stacia West of the College of Social Work at University of Tennessee, who gained press in the basic income community last year for her study of Dolly Parton’s My People Fund (which provided no-strings-attached cash support to wildfire survivors), and Dr. Amy Castro Baker of Social Policy and Practice at the University of Pennsylvania.
A new discussion paper from SEED, published on August 20, 2018, lays out newly disclosed details about the process of selecting and enrolling participants. The design is one that has been informed by feedback received from Stockton residents, consulting researchers, and others since the project was unveiled.
Seeding SEED (Participant Selection)
As described in the discussion paper, participants in SEED’s basic income trial will be chosen from the population of legal adults (at least 18 years of age) who reside in any Stockton neighborhood in which the median household income is no more than $46,033, the median household income of the city as a whole. The latter provision is intended to allow the project “to be inclusive of residents across the city while ensuring that resources reach those who are in need”.
Although eligible participants must reside in a neighborhood in which the median income is at or below the city’s median, there are no limits on the individual or household income of participants. An adult resident earning above $46,033 is still be eligible to participate in SEED.
Invitations to participate in the basic income demonstration will be sent to 1000 households randomly selected from neighborhoods meeting the income condition. Approximately 100 recipients will then be chosen at random from those who reply to the invitation and give consent to participate. Those who are not selected will be eligible to join the control group. Members of the control group will share the same type of information with the researchers (e.g. information about their financial security, health, and well-being), and they receive compensation in cash for their participation in supplying data, but they will not receive the $500 monthly income.
The invitations are to be mailed by January 2019, with first payments anticipated in February.
Project Assessment
Lead researchers West and Castro Baker will publish a pre-analysis plan in October, which will present the study’s methodology in depth.
But SEED’s latest discussion paper does provide a few new details: the project will examine outcomes including “financial security, civic engagement, and health and wellness” through a combination of surveys, interviews, and focus groups, and the research team will compare outcomes among the cash recipients to those of a control group (which, as mentioned above, will be composed of others from the population of eligible participants).
Although SEED is now to include a controlled experiment, the project still calls itself a “demonstration” instead of an “experiment”, and this not due (merely) to the attractiveness of “SEED” as an acronym rather than “SEEE”; the generation of stories and anecdotes remains a core purpose of SEED.
As also described in the recent discussion paper, Mayor Tubbs and his team aspire to produce stories about how a modest guaranteed income impacts individual lives, as well as how a social experiment impacts a city.
The demonstration will track the individual experiences of a small group of participants who volunteer to speak publicly about the effects of the program on their lives. Artists will also assist in delivering the narrative. For example, the paper indicates that a public event featuring poetry and spoken word performances is to be held at the conclusion of the project.
In addition to telling the stories of individual recipients, the SEED team intends to set the project “in a larger framework for a broader vision for a new social contract”, presenting it “as part of the larger story of Stockton, a trailblazing city on the rise”.
Motivation
The Stockton project is motivated by the belief that an unconditional basic income is “one of the most effective tools” to reduce poverty and mitigate economic insecurity. SEED states, “We are motivated to test a guaranteed income in Stockton because we believe it is to combat poverty. Unconditional cash can supplement and enhance the current social safety net.”
Inspired by Dr. Martin Luther King Jr.’s endorsement of a guaranteed annual income, Mayor Tubbs developed an interest in basic income as part of a broader program to help his city recover from economic devastation. Hit badly by the economic collapse of 2008, Stockton was declared “America’s most miserable city” by Forbes in 2011 and filed for bankruptcy in 2012, becoming the largest US city to have done so at the time (although soon surpassed by Detroit).
Tubbs was elected to Stockton’s City Council in 2012, at the age of only 22, and in 2016 defeated incumbent Anthony Silva to be elected as mayor of the city of 300,000 — the youngest mayor in the city’s history and the first African American.
Since assuming office, Tubbs has pursued a range of initiatives to combat the effects of economic devastation. He led Stockton in creating a Housing Mitigation Fund to reduce financial risk for landlords who rent homes to the homeless, for example, and he secured a philanthropic grant to launch another privately funded initiative, Stockton Scholars, which provides scholarships to help Stockton high school students attend college or university. Mayor Tubbs also spearheaded a partnership with the city and Advance Peace, a controversial program that aims to reduce gun violence by providing cash assistance and other personal support to those most likely to commit violent crimes. In addition to heading SEED, he is currently constructing a re-skilling program to help close the skills gap between employers and Stockton job-seekers.
It is against this background that SEED declares it is “taking place within a larger collective impact model to build a world-class cradle-to-career pipeline of education, public safety, and opportunity”.
A “Basic Income” Trial?
Past articles in Basic Income News have stressed that many existing so-called “basic income” experiments are constrained in ways that call into question their resemblance to a universal and unconditional basic income. In many cases, for example, participants have been selected only from pools of individuals with low incomes (Ontario, Y Combinator), who are unemployed (Finland), or who are currently receiving other welfare or social assistance benefits (The Netherlands, Barcelona). In some cases, moreover, the cash payments are reduced with earned income (e.g. Ontario, The Netherlands).
The design of the Stockton pilot is notable in that there is no requirement that individual participants be low-income, unemployed, or receiving government assistance. As mentioned above, participants must reside in neighborhood with an average income at or below the city median; however, participants themselves needn’t have an income below this level (e.g., in principle, invitations to participate could be sent to affluent investors who has purchased homes in low-income Stockton neighborhoods with the hope of later turning a profit).
Additionally, the $500 payments will not be clawed back with additional earned income. That said, however, other benefits might. SEED is currently working with government benefits agencies to determine how the unconditional cash grants will impact recipients’ eligibility for means-tested benefits. Under current US policy, such a $500 per month of “reasonably anticipated income” would generally need to be reported as household income. However, Tubbs hopes to secure waivers for participants to prevent or mitigate potential loss of benefits during the trial. SEED states that it will provide potential recipients with detailed information about the effect of participation on public benefits, as well as providing opportunities to consult with benefits eligibility counselors prior to consenting to join the project.
More Information
Official Paper: “Our Vision for SEED: A Discussion Paper” (August 20, 2018).
Official Website: www.stocktondemonstration.org.
