Starting From Stockton

Starting From Stockton

What this small California city can teach America about basic income.

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During the recent nail-biting, sleep-depriving weeks when the fate of American democracy was in hanging-chad-like balance, no one had the luxury of time to think about policy.

But with Joe Biden now the declared winner, it’s timely to consider which items on his 100-day “to-do” agenda have a realistic chance of passage. Although one might wish it otherwise, ambitious proposals like the Green New Deal may now be DOA. Initiatives that can claim bipartisan support have the best shot, especially with the Great Compromiser in the White House.

Guaranteed basic income belongs on this list.

In a Washington Post opinion piece last spring, Missouri Senator Josh Hawley—a Republican lawmaker with impeccable conservative credentials and presidential aspirations—proposed that the federal government pay 80 percent of workers’ wages, up to the national median wage, for the duration of the economic meltdown.

With 31 million people not working or working less than they would like, the economy needs a booster shot. A no-strings-attached cash transfer, while not a solution, is a smart start. Meanwhile, big-city mayors are showing the way.

A guaranteed income is not a new idea. Thomas More first bruited it 500 years ago, and its advocates have run the ideological gamut from market-focused economist Milton Friedman to Martin Luther King Jr. Several pilot experiments were conducted in the United States and Canada during the 1970s. Alaska has had its own form of guaranteed income for decades, cutting residents checks from oil industry profits, and the Cherokee Nation distributes gambling revenues to its members.

Critics believe that recipients of a minimum income will become loafers. “The best way out of poverty is something called a job,” insisted Doug Ford, premier of Ontario, justifying his 2019 cancellation of a UBI experiment. But a review of 16 trial programs worldwide shows just the opposite—the beneficiaries actually worked more. The additional money makes them feel more economically secure. It is a hand up, not a handout.

Now all eyes are on Stockton, Calif., where a basic income experiment is showing promising results.

Stockton looks like an unlikely place to find answers to anything. In 2011, Forbes dubbed it America’s most miserable city—rightly so. The murder rate was higher than Chicago’s. The unemployment rate ranked among the nation’s 10 worst. The city was the country’s foreclosure capital and it was the biggest US city, before Detroit, to declare bankruptcy.

But since Stockton emerged from bankruptcy in 2015, fiscal prudence has become the new normal. Truth in Accounting, a budgetary watchdog, ranks it the nation’s sixth most fiscally healthy municipality. Homicide is down 40 percent. The police department replaced zero-tolerance with a truth-and-reconciliation process designed to restore confidence in law enforcement. A new state university is on the drawing boards. Before the coronavirus hit, unemployment had been halved—and housing prices were up more than 50 percent.

Meanwhile, the city has branded itself as an urban innovation laboratory. “Our will to try out bold ideas and our commitment to people-centered policies has positioned Stockton as ground zero on the equity front,” Michael Tubbs, the whirlwind 30-year-old mayor who spearheaded these experiments, told me. The city is testing a number of promising initiatives, including a program to help young men leave gun violence behind and a college scholarship scheme, Stockton Scholars, whose goal is to triple the number of high school graduates who enroll in college.

The jewel in the crown is the city’s guaranteed income experiment.

The Stockton Economic Empowerment Demonstration, or SEED, began in February 2019, with 125 randomly selected residents from the city’s poorest neighborhood receiving $500, no strings attached, every month for 18 months (subsequently extended to February 2021, to help the recipients weather the coronavirus). An equal number were assigned to a control group. Funding for the $3 million demonstration project comes mainly from the Economic Security Fund, cofounded by Facebook cofounder Chris Hughes, which promotes guaranteed income as a linchpin of the economic justice agenda and sees the Stockton experiment as a way to draw national attention.

Difficulties in getting the program off the ground showed that the legacy of distrust runs high. Some recipients had to be convinced, with hand-signed letters from the mayor and door-to-door conversations, that this wasn’t a scam or a ruse devised by ICE to round up undocumented immigrants.

For many of the beneficiaries, SEED has proven to be a game-changer. Data on an online dashboard indicates that the program is accomplishing its purpose—it is keeping people afloat and changing lives. “Research showed us that many Americans were a $400 emergency away from financial ruin,” Tubbs said, explaining how this amount was determined. “If that was enough to break someone, $500 was enough to keep them out of poverty.”

The money represents 30 percent of the typical participant’s income. “You couldn’t have anticipated the incredibly wide range of things that people are doing,” said Sukhi Samra, SEED’s director. “People put extra food on the table. People moved. People worried a little less. One woman used the money to buy dentures. One mom bought her daughter a pair of shoes for her birthday, free from worry about whether she could afford it. For her, that purchase was about feeling like a good parent who provides for her child.” Some participants have cut back on working second and third jobs, giving them the precious gift of time to spend with their families and friends. Less than 1 percent has been spent on tobacco and alcohol.

The researchers, whose final report will be released next year, did not helicopter in, metrics in hand and publication in a peer-reviewed journal on their minds. “We believe in doing research with the people, not for the people,” said University of Pennsylvania professor Amy Castro Baker. “In designing the dashboard, we workshopped with Stockton Scholars and community groups that know poverty firsthand. ‘What needs to be on here?—your voice counts.’”

Message received: “The residents feel like their voices and opinions matter,” noted Pandora Crowder, president of the Conway Homes Resident Council, a major player in Stockton politics. “We were able to help with the dashboard that the nation is looking at and using as a template to try and implement similar programs in cities across the United States.”

The SEED staff spends much of its time talking with the participants. “Human contact is a rarity for poor families,” Samra said. “The opportunity to share stories, to feel heard is huge incentive.” Researchers often have a hard time keeping control group members from dropping out, but that has not been the case in Stockton. “It’s not just the money—retention for the control group is very high because they’re receiving attention. They feel they have a chance to be involved in something that’s important.”

“I worked all my life, cleaning uniforms at the Oakland Coliseum,” Laura, the matriarch of her family, told me. (At their request, I am using only the first names of the people I interviewed.) She had been laid off, “fallen on hard times,” but was embarrassed to ask her family for food. “Now I could feed my kids and grandkids—turkey at Thanksgiving, ham at Christmas—gumbo, that’s their favorite. I could pay off bills, pay for my car. SEED helped me to survive.”

Tomas was working paycheck to paycheck at a part-time job in the Stockton Metropolitan Airport. SEED provided the financial cushion he needed to search for a full-time position. “I had a real bad past. When we had all those murders in 2011, my brother and my closest friend were killed. After that, I didn’t want to be around anyone. SEED changed me—it has backed me up, given me the time to be a better parent. It made me look at the positive, even in Covid time.”

Amid the pandemic, the basic income guarantee became their life raft. “I could stockpile essentials, so I was able to stay inside when shelter-in-place took effect, keeping myself and others safe,” Laura said. When Covid hit, Tomas lost his job. “The money has supported me while I looked for other employment. I found a great new job—I’m a proud parent facilitator, running workshops to help parents learn how to parent kids with trauma.”

An experiment in Finland concluded that guaranteed income recipients had developed more faith in politicians, the courts, and the police. They were more confident in their futures—more likely to think that they could make a difference—and happier than their peers. The implication is plain: people will trust government when government earns their trust. If they do not have hope, they can’t envision an alternate future. If people believe they don’t matter, they withdraw.

The SEED researchers are studying whether those who receive the money are convinced that they have become more valued members of society and can count on officials to keep their word. “Those things are correlated with health and well-being, and preliminary results look promising,” said University of Tennessee professor and co-researcher Stacia Martin-West.

“The people are called to something. They feel bigger than themselves,” Tubbs told me. “SEED has boosted civic morale. The programs we’ve implemented to address poverty have lowered violent crime rates, increased high school graduation rates and improved materially the lives of Stocktonians. People are looking at us as a solution, not a problem. Now it’s ‘we should do what Stockton is doing.’”

The idea of a guaranteed income is catching on nationwide. Tubbs, who has become a nationally recognized figure (a recently released HBO documentary recounts his personal story), has launched Mayors for a Guaranteed Income. Los Angeles’s Eric Garcetti, Atlanta’s Keisha Lance Bottoms, and Newark, N.J.’s Ras Baraka are among the city leaders on board. With Tubbs leading the charge, the US Conference of Mayors adopted a resolution urging that “cities, states, and the federal government to explore the feasibility of a guaranteed income” in response to how “COVID-19 has shed light on economic insecurity and exposed the vulnerability of our current welfare system.”

Popular support is also growing. In online studies conducted by Stanford’s Gregory Walton and several colleagues last spring, as many as 75 percent of those polled favored a guaranteed income, compared to 55 percent before the coronavirus hit.

“Covid-19 is exposing fractures that have been there since the recession,” Amy Castro Baker told me. “This gives us a chance to rectify that. Now we have bipartisan support for the idea that all Americans living paycheck to paycheck need cash transfer.”

“Only a crisis—actual or perceived—produces real change,” Milton Friedman once observed. “When that crisis occurs, the actions that are taken depend on the ideas that are lying around. The politically impossible becomes the politically inevitable.” Could this be the right moment and guaranteed income one of those ideas?

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