Dem Mayors Launch Pilot Program To Provide Universal Basic Income For Low-Income Residents

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Published April 21, 2021

By Bethany Blankley [The Center Square contributor] –

 A group of 43 Democratic mayors from across the country is backing plans to provide certain low-income residents with a universal basic income.

Called Mayors for a Guaranteed Income (MGI), the group argues that “economic security isn’t a new challenge or a partisan issue.” The way to end or reduce poverty, they argue, is to guarantee a certain level of income to low-income residents with no strings attached.

Called the new, “New Deal moment,” the MGI argue that providing certain residents with direct, recurring cash payments “lifts all of our communities, building a resilient, just America.”

About 40% of the participating mayors are located in the Northeast, with the greatest number, 7, located in California. The majority of mayors are men; roughly two-thirds of the mayors are black or Hispanic.

The Stockton Economic Empowerment Demonstration (SEED) is the country’s first mayor-led guaranteed income project. It is fully philanthropically funded and receives no taxpayer dollars. It initiated its pilot program in February 2019, first giving 125 residents $500 per month over an 18-month period.

Researchers from the University of Tennessee-Knoxville College of Social Work and the University of Pennsylvania, School of Social Policy & Practice are evaluating SEED, funded by the Evidence for Action program of the Robert Wood Johnson Foundation.

In Oakland, Calif., eligible families with income at or below 50 percent of the area median income ($59,000 for a family of three) are eligible to receive $500 a month. In Los Angeles, Mayor Eric Garcetti said the city would test a new pilot program giving 2,000 families $1,000 a month.

In Jackson, Mississippi, low-income Black mothers began receiving $1,000 a month through two groups, Springboard to Opportunities and the Magnolia Mothers Trust.

Several cities have adopted resolutions supporting a guaranteed income, including Newark, N.J., Gainesville, Florida, Ithaca and Hudson, N.Y., Cambridge, Mass., among others.

Last December, MGI received a $15 million grant from Jack Dorsey, the CEO of Twitter. Last fall, a center was established at the University of Pennsylvania’s School of Social Policy and Practice to guide MGI pilot cities through a learning agenda and ultimately publish a report of its findings.

“A guaranteed income is a monthly, cash payment given directly to individuals,” MGI explains on its website. “It is unconditional, with no strings attached and no work requirements. A guaranteed income is meant to supplement, rather than replace, the existing social safety net and can be a tool for racial and gender equity.”

Once the philanthropic money runs out, and if the pilot programs were implemented on a regional or national scale, one way to fund the cash payments would be to create a national sovereign wealth fund, MGI states on its website. Everyone would benefit from increasing tax rates on the wealthiest Americans, MGI argues, and increasing taxes would “bring the [wealthiest taxpayers’] tax rates to their 20th century historical averages,” MGI states.

MGI points to the Alaska Permanent Fund and casino dividends provided to the Eastern Band of Cherokees as examples that could be replicated. Currently, Alaska residents receive a yearly dividend from state oil revenues. In 2020, the fund paid $992 to each eligible resident. Eastern Band of Cherokees receive casino dividends yearly, ranging from $600 to $16,000 depending on revenues.

According to the center at the University of Pennsylvania, public support and political momentum for cash-transfers, universal basic income and guaranteed income is growing.

The Roosevelt Institute claims that if the U.S. were to transfer its current welfare systems into a universal basic income system, doing so would grow the U.S. economy by $2.5 trillion by 2025. The institute suggests one way to fund the program is to raise taxes.

The Foundation for Economic Education argues the plan is foolhardy, arguing, “a welfare state by any other name is still a welfare state. And the UBI is just replacing one pricey system for another. And unlike the current welfare state, which has standards for determining who qualifies for certain aid, a UBI would be given to everyone. This would dramatically increase the pool of citizens receiving benefits from the state and inflict massive expenses across the board.”

According to a Pew Research Center survey conducted last year, 54% of adults surveyed said they opposed a federally funded guaranteed income.

Of the 11,000 adults surveyed, two-thirds of respondents between the ages of 18 and 29 “strongly” or “somewhat” favored a UBI. More than half of all other age groups opposed the idea; nearly three-quarters of adults age 65 and older oppose it. Sixty-four percent of whites surveyed opposed it, whereas 73% of Backs and 63% of Hispanics favored it. Nearly 80% of Republicans opposed it, whereas 66% of Democrats supported it, the Pew survey found.