For more than a year now, Stockton Mayor Michael Tubbs and a non-profit organization called the Stockton Economic Empowerment Demonstration have been planning a radical economic experiment: Making Stockton the first city in the country to distribute a “Universal Basic Income” to its largely impoverished residents (the median income in the city is below $46,000).
And while the city of 300,000 – which recently emerged from bankruptcy after becoming a cautionary tale of the fallout from the financial crisis when it first filed in 2012 – won’t be sending checks to as many people as they would have liked, those lucky enough to receive the letters announcing their eligibility for the program will receive them this week.
Michael Tubbs
Stockton residents are struggling with stagnant wages, rising home prices due to the city’s proximity to Silicon Valley and a loss of middle class jobs – all against a backdrop of the looming threat of automation. The city first filed for bankruptcy in 2012.
The program, which is being financed by a non-profit called the SEED, will ultimately dole out $500 a month to the 100 lucky finalists for a year. Another 200 will be selected for a “control” group (they will receive a $20 gift card to compensate them for the time spent filling out surveys). At the end of the year, SEED will publish its findings to demonstrate the impact of UBI on recipients’ health and stress levels.
The pervasive poverty in the city helped inspire mayor Tubbs to announce last year that the city would soon begin an interesting social experiment. And on Friday, he took a few moments to crow about the project to a local TV station.
“Around this country, especially in communities like Stockton, people are working incredibly hard and falling further and further behind. We have people in our community that work two or three jobs, we have people that are working and still can’t pay rent,” said Mayor Michael Tubbs.
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“People who are working incredibly hard are smart and they don’t have money because they are not good with money, they don’t have money because jobs aren’t paying enough for folks to live and survive. We believe something as small as $500 a month can make a world of difference,” he said.
One resident of one of the low-income neighborhoods eligible for the project said that he largely lives paycheck to paycheck because of the cost of his rent, as well as expenses associated with raising his children. Miranda said the money would be a huge windfall for himself or any of his neighbors.
Stockton dad Jose Miranda works hard to save his money, but setting aside a small portion of his paycheck every other week can be a challenge. He says his expenses just keep piling up.
“Kids you know, my kids. I spend money on my kids the most, I think. And rent, in particular. Food and phone,” said Miranda.
Miranda lives in a neighborhood where the median income is at or below 46-thousand dollars. It’s one of the areas the Stockton Economic Empowerment Demonstration program (SEED) is sending letters to people who may be eligible to get $500 a month with no strings attached.
“I think for the people that really need it, it will be good for them, like a lot of people say groceries, rent, car payment, even if you want to help a family member, anything extra is good to get,” Miranda said.
There’s no question that this money could change the lives of its recipients. But we doubt any data gathered by SEED will be very effective in determining the overall economic impact of UBI, which, according to the most basic laws of economics, would likely trigger a destabilizing surge in inflation that would risk wiping out any wealth gains. Fortunately, that should come in handy when we need to inflate away all of that pesky debt…
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