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In Experiment, Calif. City Gives 125 Residents $500 a Month

Stockton tries out 'universal basic income'
By Newser Editors and Wire Services
Posted Sep 4, 2019 12:42 AM CDT
In this photo taken Wednesday Aug. 14, 2019, Stockton Mayor Michael Tubbs discusses a program he initiated to give $500 to 125 people who earn at or below the city's median household income of $46,033...   (AP Photo/Rich Pedroncelli)
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(Newser) – Democratic presidential candidate Andrew Yang wants to give cash to every American each month. Susie Garza has never heard of Yang. But since February, she's been getting $500 a month from a nonprofit in Stockton, Calif., as part of an experiment that offers something unusual in presidential politics: a trial run of a campaign promise. Garza can spend the money however she wants. She uses $150 of it to pay for her cellphone and another $100 or so to pay off her dog's veterinarian bills. She spends the rest on her two grandsons now that she can afford to buy them birthday presents online. "I've never been able to do that. I thought it was just the coolest thing," says Garza, who is unemployed and previously was addicted to drugs, though she said she has been sober for 18 years following a stint in prison. "I like it because I feel more independent, like I'm in charge. I really have something that's my own," says Garza, whose husband recently lost his job.

Garza is part of an experiment testing the impact of "universal basic income," an old idea getting new life thanks to the 2020 presidential race, although Stockton's project has no connection to the presidential race, the AP reports. More:

  • In February, the city launched the Stockton Economic Empowerment Demonstration, a pilot program spearheaded by a new mayor and financed in part by the nonprofit led by Facebook co-founder Chris Hughes. The city chose 125 people who live in census tracts at or below the city's median household income of $46,033. They get the money on a debit card on the 15th of each month. "I think poverty is immoral, I think it is antiquated, and I think it shouldn't exist," says Michael Tubbs, the city's 29-year-old Democratic mayor.
  • Stockton residents, who have elected Republican mayors for 16 out of the last 22 years, were skeptical, worried about encouraging people not to work. Tubbs said he calmed their fears by noting the money came from private donations, not taxpayer dollars.
  • A team of researchers is monitoring the participants. Their chief interest is not finances but happiness. They are using what they call a "mattering scale" to measure how much people feel like they matter to society.
  • The money has made Jovan Bravo happier. The 31-year-old Stockton native and construction worker is married and has three children, ages 13, 8, and 4. He says he didn't see enough of his children when he worked six days a week to pay the bills. That changed when he started getting $500 a month. Now he only works one Saturday a month. He uses the other Saturdays to take his kids to the amusement park and ride bikes with them in the park. "It's made a huge difference," he says. "Just being able to spend more time with the wife and kids, it brings us closer together.
  • The Stockton experiment runs through July 2020. Researchers expect to release their first round of data this fall, when the presidential campaigns are preparing for the Iowa caucuses and state primaries.
  • Yang, a tech entrepreneur, has anchored his long-shot bid with a proposal to give $1,000 in cash to every American, saying the payments will shield workers from the pain of certain job losses caused by automation. His proposal isn't too far off one by Sen. Kamala Harris, who has a proposal to give up to $500 a month to working families.
  • Stockton's program, giving 125 people $500 per month for 18 months, will cost just over $1.1 million. Harris' plan, which covers working families making up to $100,000 annually, would cost about $275 billion per year, according to the Tax Policy Center. To pay for it, she says she would repeal some of the 2017 GOP tax cuts and impose new taxes on corporations. Yang's plan, which covers every adult in the United States, would cost $2.8 trillion per year. He would impose a new tax on businesses' goods and services while shrinking some other government assistance programs.

(Read more universal basic income stories.)

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