Melvin Carter, the mayor of St. Paul, Minnesota, watched his city’s twin, Minneapolis, burn this spring. Sparked by the killing of George Floyd, the whole state ignited in protest and fury over his May 25 death and the treatment of Black people at the hands of police. Carter knew his city’s citizens were aggrieved not only by decades of mistreatment, but also by the entrenched poverty that accompanied it.
“We have people in our community who work 60 hours a week and still scrape by to feed their children and pay their rent,” said Carter. “Whole neighborhoods that are in deep poverty and doing the best they can.”
A month before Floyd’s death, Carter’s office had provided 1,265 families one-time payments of $1,000 through a temporary program called the Bridge Fund. The emergency relief diminished some hardships, but hasn’t been nearly enough. Carter wants a longer term solution.
As the pandemic decimates the bank accounts of American families, mayors across the country like Carter are proposing guaranteed income experiments, or universal basic income, as a simple, scalable and equitable solution for both families and local economies.The March stimulus package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, they say, showed that giving direct cash to people works. The $1,200 checks from the federal government that many Americans received, the Paycheck Protection Program—which helped employers make their payroll —and the $600 weekly unemployment assistance payments kept many people afloat. But that assistance was limited and weekly checks expired at the end of July. In their absence, these mayors believe the need for universal income has become more urgent and could help address racial disparities that COVID-19 has exacerbated.
Led by Mayor Michael Tubbs of Stockton, California, a coalition of 16 city leaders from across the country announced Mayors for Guaranteed Income in June, an initiative meant to show the merits of a monthly check. Los Angeles Mayor Eric Garcetti signed on, as did Atlanta Mayor Keisha Lance Bottoms, Seattle Mayor Jenny Durkan, Pittsburgh Mayor William Peduto and others.
Tubbs told NBC’s “TODAY” show in June that a guaranteed income is a step toward “abolishing poverty.” But the money, unlike a universal basic income, would only go to those in need, not to everyone regardless of wealth. The city of Stockton has been piloting a program for around 18 months, providing $500 a month to 125 people. During the pandemic, about 45 percent of that money went to food, Tubbs said. Much of the rest went to providing other essentials for the family, like rent. While the mayors’ joint venture was in the works before the pandemic, they believe the pandemic and protests only strengthened their case.
Carter signed onto the new guaranteed income initiative in June – he believes it will help bridge the poverty gap permanently, by providing direct, monthly cash payments to residents of his city in need, every month. No strings attached.
An old idea, with renewed attention
Universal Basic Income is a centuries-old idea that has long been floated but rarely implemented. The premise is simple: Give people money and trust them to use it for their needs. It has, in recent years, been taken out of economics theory papers and put to work in experiments in Kenya, Finland, Canada, Namibia and Brazil. Critics have long worried aid recipients will spend lavishly, or use the money as an excuse not to work. For champions of a universal basic income, Finland’s pilot, which gave 2,000 unemployed residents a monthly check for two years, 2017 and 2018, failed in exactly this manner: Those who received basic income weren’t picking up jobs faster, and they only showed a small boost in mental well-being and perceived economic security when compared to the control group. It wasn’t the impact advocates had hoped for, though experts say there were clear flaws in the program itself, including a rush to set it up, underfunding, diminishing other benefits to those who received the cash, and limiting the trial to those already unemployed.
Over the years, guaranteed income has been endorsed across the ideological spectrum for different reasons, with champions ranging from Martin Luther King, Jr. and the Black Panthers, to the conservative economist Milton Friedman to right-wing political scientist Charles Murray, though it has never truly captured the attention of lawmakers. Americans on the whole have not been particularly keen on the idea of a universal basic income, which is thought to run contrary to U.S. ideals of hard work and self-made worth. Yet as inequality and the cost of living skyrocketed, it has started to draw the attention of the greater American public. When 2020 Democratic presidential candidate Andrew Yang, an entrepreneur, offered up a form of universal basic income as a central part of his plank during the primaries, Silicon Valley elites threw their support behind the idea, and Yang brought the concept to a wider audience, arguing it would bridge the gap as jobs continue to be automated away.
And then the pandemic hit, and with it the worst economic downturn since the Great Depression.
“COVID-19 has shone a bright, hot light on our systemic failures,” said Mayor Libby Schaaf of Oakland, California, “Oakland has seen more than a doubling in homelessness, and I am terrified that once these eviction moratoriums expire, we will see a homelessness Armageddon.”
Schaaf is another signatory of the Mayors for Guaranteed Income Statement of Principles. Her city was once thought of as the working-class sibling to San Francisco. In recent years Oakland has become unaffordable for many who’ve called it home for generations: Along with rising homelessness, gentrification is in overdrive, the poverty rate is creeping toward 20 percent, and a housing crisis looms ever larger. Schaaf says a guaranteed income is “powerful in its simplicity.”
Schaaf, who has also been criticized by activists for being too cozy with developers, acknowledged it is “not the end of the work,” saying issues like housing costs and fair wages still need to be addressed, but believes that, in the meantime, a guaranteed income could significantly help people in her city, especially as the pandemic persists.
An antidote to the racial wealth gap?
The coalition of mayors also believes the universality of the idea is crucial to its success, and there are lessons to be learned from the CARES Act.
“CARES was a pretty important moment of recognition that direct financial support to people is a really essential tool,” said Dorian Warren, the president of Community Change, a Washington-based national organization that works to build power for low-income people of color. Still, a one-time payment sent to Americans under a certain income threshold cannot lift up a person or a family the way a monthly check would, Warren said. Noncitizens didn’t receive a check, and supplemental unemployment assistance was tied to lost pre-pandemic employment.
“Americans needed an income floor before the crisis, they clearly need one during the crisis, and they need one after the crisis,” Warren said, who has argued that universal basic income could function as something close to reparations for Black Americans.
Other post-mortems of the CARES act underscored the impact of unequal fund distribution. A Columbia University Center on Poverty and Social Policy study released in June showed that had the CARES act been equally distributed, it could have reduced poverty to pre-pandemic levels, but it left out many who needed it the most. Another study published by Accountable.US in July showed congressional districts with the highest Black populations received up to $13 billion less in Paycheck Protection Program funding than districts with the lowest percent of Black residents. Now, experts believe the government stimulus might actually widen already existing wealth gaps.
Warren said it’s precisely because of the failures of the CARES Act that the country needs help that is more universal, and inclusive. He pointed to Mayors for a Guaranteed Income as a possible way to get there.
Oakland’s Schaaf said a guaranteed income is “probably the most powerful antidote for racial disparities” that she could enact policy wise. “It all comes down to resources at the end of the day.”
But critics, even those on the left, are quick to say a guaranteed income isn’t a panacea – and comes with the potential to drain already scant government funds for existing social services.
Indivar Dutta-Gupta, co-executive director of the Center on Poverty and Equality at Georgetown Law, said cities don’t have the luxury of choosing between pre-existing social services and a guaranteed income.
“People need both a minimum income and high quality public goods and services,” he said in an email. “For any given need, such as having access to high quality early care and education or affording diapers for a baby, providing cash or the necessary good or service are not strong substitutes for each other.”
Some conservatives, however, support universal basic income precisely because they think America should choose between guaranteed income or a broader system of safety nets. Liberal critics often worry universal basic income will lead to the defunding of other programs, while other policymakers criticize the price tag of sending checks to tens of millions every month.
Others worry universal income might not actually reach those who need it the most, like youth who are homeless or housing insecure, said Maurice Gattis, an associate professor of social work at Virginia Commonwealth University. Gattis says prevention is crucial to solving poverty, and believes a housing and health care guarantee would do more to help than a check each month.
The federal government’s pandemic relief “exposed the gaps in our system,” he said. And there is no reason to believe monthly checks would necessarily fill that gap. To get the stimulus check as quick as possible, you needed to have a bank account. But that excludes those without a checking account, not to mention those without a permanent address for a check to even be mailed.
Carter, St. Paul’s mayor, understands the criticisms. He still feels the evidence points to the efficacy of guaranteed income.
“We are arguing for a route to a far more resilient and sustainable economy for the entire country,” he said. “Doing nothing is absolutely not an option.”