What Cities Are Trying Guaranteed Basic Income?

By

Sep. 29 2020, Updated 12:04 p.m. ET

Before he was out of the race, Andrew Yang fought in the 2020 presidential race on the basis of universal basic income (UBI). He called it The Freedom Dividend, a proposed UBI of $1,000 per month for every American adult. Despite the fact that Joe Biden ended up with the Democrat nomination and has made no mention of guaranteed basic income, the idea of UBI didn't leave the American conscious. Some cities have even implemented trials of their own.

Article continues below advertisement

What U.S. cities have guaranteed basic income?

In 2018, Magnolia Mothers Trust in Jackson, Miss. launched a guaranteed income pilot for 15 single mothers, giving them $1,000 per month for a year. One participant, Ciara McDonald, was able to use the funds to get herself out of the trenches of debt and never-ending dues.

By the end of the pilot, participants were able to pay off $10,000 in predatory debt. Before the program, 37 percent of people reported being able to cover all their expenses without support. By the program's end, that number was up to 80 percent. Jackson plans to move forward with larger programs.

Article continues below advertisement

In February 2019, Stockton, Calif. began their own guaranteed income pilot. They provided 100 local residents with $500 each month. While the program was initially set for 18 months, they extended it to January 2021 because of economic struggles resulting from the pandemic. Stockton Mayor Michael Tubbs was raised by a single mother and aims to advocate for low-income families in his community. 

In June, 11 U.S. cities announced that they were joining a coalition called Mayors for a Guaranteed Income to begin more location-specific UBI tests. Membership is rapidly growing. By Sept. 29, 25 cities had joined, including:

  • Los Angeles
  • Compton, Calif.
  • Stockton, Calif.
  • Tacoma, Wash.
  • Atlanta
  • Newark, N.J.
  • St. Paul, Minn.
  • Shreveport, La.
  • Philadelphia, Pa.
  • Jackson, Miss.
Article continues below advertisement

How does guaranteed income work?

The core ideal of guaranteed basic income rests in the word "guaranteed." Unlike welfare or food stamps, it's unconditional. In the words of Every Child Strives, it's "cash with no strings attached." Policymakers hope guaranteed income can help reduce poverty and bring us closer to an economy that is equitable for all. 

Despite its rising popularity in the modern political sphere, UBI is not a new concept. President Richard Nixon advocated for guaranteed income in the 1960s. So did Dr. Martin Luther King, Jr. 

Article continues below advertisement

International regions with UBI

The Ontario Basic Income Pilot in Ontario, Canada began in 2018 with a basic income group and a comparison group across three regions. At the end, a third-party research group will evaluate the pilot's effectiveness. 

In Brazil, the social welfare program Bolsa Família gave 13.8 million families $34 per month. For reference, the monthly minimum wage in the country is $190. While funds were partly conditional, the country's poverty rate fell 27.7 percent. A revised program called Renda Cidada is set to begin.

Article continues below advertisement

Both Mongolia and the Republic of Iran temporarily had nationwide UBI programs in place. As of now, there are no programs that span an entire country.

Is guaranteed income a route out of poverty?

In America in 2018, 12.6 percent of women and 10.6 percent of men were living under the poverty threshold of $25,700 annually. At the same time, more than a quarter of people living with a disability, more than a quarter of Native Americans, and more than a fifth of Black people were impoverished.

This year—with approximately 62 million Americans having filed for unemployment since the start of the pandemic and the occurrence of the 2020 stock market crash with the largest one-week declines since 2008—the idea of guaranteed basic income is more relevant than ever before. 

Advertisement

More From Market Realist

  • Kentucky Derby horse and handlers
    Real Insights
    You Can't Bet on the Kentucky Derby on DraftKings, Other Options
  • Semiconductor chip
    Real Insights
    What Factors Are Playing Into the Global Chip Shortage?
  • Man moving packages from a shipping truck
    Real Insights
    Shipping Stocks for Investors to Watch in Q2 2021
  • small business owner
    Real Insights
    Business Owners Don't Have to Pay Back PPP Loans If They Follow Terms of Forgiveness
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.