Stockton, California will become the first city in the country to participate in a test of Universal Basic Income, in which 100 residents will be given $500-dollars-a-month, with no strings attached.
The program aims to create a level of income that no one will fall beneath.
By providing impoverished residents a regular sum of money that they can use on anything they wish, be it food, clothes, gas, or starting a new venture, those behind the program believe it could go a long way to give people enough support to try out new ideas.
The program in Stockton, which was once known as America’s foreclosure capital, will see the program launched by 2019, and the payments will continue to the individuals chosen for the program for a full 18-months.
The Stockton UBI program has heavy backing from one of the wealthiest areas of the country- Silicon Valley, according to CNN Money.
The idea is, in part, to off-set the economic distress the growing automation industry is expected to cause to American laborers, as well as a way to potentially reduce poverty.
One of the backers for the Stockton UBI program is Facebook’s co-founder Chris Hughes, whose organization, the Economic Security Project, contributed $1 million to the Stockton initiative.
‘It is such a fundamental idea behind America that if you work hard, you can get ahead, and you certainly don’t live in poverty. But that isn’t true today, and it hasn’t been true in the country for decades,’ Hughes told CNN Money.
‘I believe that unless we make significant changes today, the income inequality in our country will continue to grow and call into question the very nature of our social contract.’
One-in-four people in the city of more than 300,000 live in poverty, with the median household income sitting at $49,271, compared to $57,617 nationally.
The city’s inhabitants are also largely minorities with 70 per cent identifying themselves as such.
‘Stockton is a city that looks a lot like the rest of America,’ said Natalie Foster, co-founder and co-chair of the Economic Security Project.
Several heavy hitters in Silicon Valley have touted the importance of exploring funded programs for those living in poverty, such as Elon Musk and Mark Zuckerberg.
‘We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas,’ Zuckerberg said at a Harvard commencement address in May 2017.
‘We have a bunch of folks starting off life already behind, born into communities that don’t have a lot of opportunity,’ said Stockton Mayor Michael Tubbs.
‘My mom always used to say, ‘You have to get out of Stockton.’ … But I want Stockton to be a place people want to live in.’
And a real fear for cities like Stockton is the ‘looming threat of automation and displacement,’ as Tubbs puts it.
He says the companies that are building these technologies, like the ones in Silicon Valley, ultimately ‘have a responsibility to make sure people aren’t adversely impacted and also make their communities better places.’
‘I’ve watched the tech community become very interested in Universal Basic Income for the past several years. I think it stems from one part guilt and one part optimism,’ Foster said.
‘These are folks who believe in the moonshot, believe in the big ideas, and that nothing is too big.’
Meanwhile existing cash transfer programs such as one in Alaska- where for the past 40-years residents receive varying annual cash payment from oil royalties- are being looked at as an example of the possibilities UBI could hold for under-served communities.
‘They use it to save for education, to get them through seasonal changes in their work, or to pay for heating during the winter when that gets much more expensive,’ Foster said.
Similar UBI programs have been tested around the world by various organizations such as in Finland, Italy, Uganda, Cambodia and India.
For example in Finland, a monthly stipend of 560 euros was given to 2,000 unemployed people between the ages of 25 and 58. In Cambodia, $5 a month went to pregnant women and children.
The project hopes to assess if a basic income affects school attendance and health, and if people will quit their jobs and start new businesses, as well as the potential to impact female empowerment.
‘It has really exciting potential, and this is why it is important to look into,’ Allison Fahey, associate director of MIT’s Poverty Action Lab said. ‘It’s a very radical way of delivering aid. There is an elegance and beauty to how simple it is.’