When a California city gave people a guaranteed income, they worked more — not less

“The city of Stockton, California, embarked on a bold experiment two years ago: It decided to distribute $500 a month to 125 people for 24 months — with no strings attached and no work requirements. The people were randomly chosen from neighborhoods at or below the city’s median household income, and they were free to spend the money any way they liked. Meanwhile, researchers studied what impact the cash had on their lives.

The results from the first year of the experiment, which spanned from February 2019 to February 2020, are now in.”

“The most eye-popping finding is that the people who received the cash managed to secure full-time jobs at more than twice the rate of people in a control group, who did not receive cash. Within a year, the proportion of cash recipients who had full-time jobs jumped from 28 percent to 40 percent. The control group saw only a 5 percent jump over the same period.

The researchers wrote in their report that the money gave recipients the stability they needed to set goals, take risks, and find new jobs. One man in his 30s had been eligible for a real estate license for over a year but hadn’t gotten it because he just couldn’t afford to take time off work. Thanks to the freedom offered by the extra $500 per month, he said, his life was “converted 360 degrees … because I have more time and net worth to study … to achieve my goals.””

“Cash recipients reported being less anxious and depressed than the control group. On average, the recipients “experienced clinically and statistically significant improvements in their mental health that the control group did not — moving from likely having a mild mental health disorder to likely mental wellness over the year-long intervention,” according to the researchers.

The cash also enabled recipients to help their family and friends. For example, one woman used the cash to help her siblings buy school clothes for their kids and to help her daughter-in-law pay for car insurance. Another bought diapers for her grandchildren.”

“The Stockton experiment was a small study with only 125 cash recipients, so the findings should be seen as offering supporting evidence on the effectiveness of cash programs rather than as definitive standalone proof.”

Minimum Wage: Good Idea? Or Bad Idea?: Video Sources

Making Sense of the Minimum Wage: A Roadmap for Navigating Recent Research Jeffrey Clemens. 5 14 2019. CATO Institute. https://www.cato.org/publications/policy-analysis/making-sense-minimum-wage-roadmap-navigating-recent-research Gradually raising the minimum wage to $15 would be good for workers, good for businesses, and good for the economy Ben Zipperer. 2

The coronavirus crisis has revealed what Americans need most: Universal basic services

“The basic income suffers from a number of flaws it can’t get away from. The first is that it’s either too big, so it’s unaffordable, or it’s too small, so it doesn’t make a difference. In Europe, certainly in the UK, most of the basic income schemes that are advanced here, we’re talking about something equivalent to $85 a week. While that’s going to make a difference to some people, it’s not going to fundamentally change the life choices of the people it’s supposedly targeting.

If the objective is to emancipate people, then [a UBI] has to be close to $1,000, possibly $2,000 a month. At those levels, we’re talking about tripling the federal budget. No one’s really considering that a reasonable proposal. So it suffers from a sort of catch-22.”

“There are lots of factors that cause people not to reach their potential that are not solvable through a reasonable individual cash distribution, because they are social infrastructure.

Social infrastructure services flow naturally to basic needs. If low-cost social housing is available, it flows to people who need it rather than people who can afford a larger house. We have a free national health care service here in the UK — people don’t just turn up at the doctor for fun, because it’s free. They go when they’re sick. People go into education programs when they need retraining. Basic social infrastructure is accessed by people at the time of need.”

“We defined seven basic categories of essential services that meet three criteria. For someone to meet their full potential, they need safety, opportunity, and participation. So that is individual safety, opportunity to use their skills and abilities to improve their own lives, and ability to participate in the democracy.

What does that take, in a modern sense? They need somewhere safe to live, access to food, health care access, education, access to digital information and communication systems, and access to a transport system. Our seventh category we call legal, by which we mean access to the institutional mechanisms of democracy and society.”

..

“The proposal for universal basic services is not a proposal for universal [public] provision. It is not that everybody will live in highly energy-efficient, low-cost, government-provided housing. It is that access to housing is available.

If you go on to the average university campus, you will see what looks very much like a universal basic services system. The university is providing a room in a shared environment, where you share a kitchen with someone. If you’ve got more money and you want to go and live in independent housing, then you move out into a house down the street.”

“There’s still a private market and it would probably be the majority of consumption, but the expectation is that you’re creating a base floor within that market. And that would stimulate the quality of the market and enable more innovation in the rest of the marketplace.”

“We modeled our original proposal. For the vast majority of the population, everybody earning median incomes and below, there’s a net positive. People right at the bottom are having something like 60 to 80 percent of their normal costs replaced by public services. That leaves them money in their pocket.

Around the median, there’s a small net benefit, and then at the higher end, we’re talking about net contributions that are in the dozens of dollars a month. But to put society on a sustainable path, we need to get to a higher level of responsibility and pay for the society we want. That means slightly higher levels of tax.”