STOCKTON, California – After losing a steady job two years ago, Zohna Everett has struggled to make ends meet. She drove for transportation services, cut grocery coupons, handed out recyclables for gas money and traded manicures for pressed nails from Walmart.
A phone call then changed his financial outlook. Everett learned that she had been selected to become one of the 125 Stockton residents receiving $ 500 a month for 18 months, a unique pilot test of universal basic income, or UBI.
“Everything in me was like, yes!” says Everett, 48. “I needed this just in time.”
Eight years ago, this agricultural town in central California known for producing almonds and grapes became the country’s largest municipality to go bankrupt. Now Stockton is in the news for a project that aims to elevate low-income residents with an UBI, an often revived economic idea propelled into the national spotlight by Andrew Yang’s recently closed presidential campaign.
The idea of free money hit the headlines and sparked debate. Although the extra money each month is undoubtedly a boon to the dozens of Stocktonians on the program, economists, researchers, politicians and union leaders are mixed about whether this small privately funded experiment will provide Significant evidence in support of a truly national UBI, which is estimated to cost taxpayers more than $ 3 trillion.
Supporters are resolved that financial assistance to people living on the poverty line enables beneficiaries to take control of their financial lives, improves their mental and physical health and encourages them to invest in their own future.
“Overall, the results of an UBI are quite encouraging,” says Ioana Marinescu, assistant professor of public policy at the University of Pennsylvania School of Social Policy and Practice and author of “No Strings Attached: The Behavioral Effects of US Unconditional Cash ”from 2017 Transfer Programs. ”
Marinescu has studied similar programs in which taxpayers get money from government unrelated to employment, such as the Alaska Permanent Fund, which since 1976 has injected some $ 64 billion in oil production revenues that are used each year for the payment of dividends to residents. In 2019, 631,000 Alaskans each received $ 1,606.
“We have found that the UBI improves health and education outcomes among the poor,” says Marinescu. “This does not increase spending on drugs and alcohol, and research has shown a decrease in drug use and crime.”
Critics of a universal basic income, however, fear that free money will erode the value of work and jeopardize the existing social safety net programs on which many people living below or below depend poverty line. Others point out that it is difficult to predict whether a national UBI program would work for a nation as large and politically divided as the United States.
“I expect Stockton’s UBI experience to be positive,” said Jesse Rothstein, co-director of the Opportunity Lab at the University of California at Berkeley, which examines the causes and impact of poverty. “But you cannot answer the very big questions before you implement it on a large scale for a long time.”
Mayor: Anyone can use “a little help”
The Stockton Economic Empowerment, or SEED, demonstration started in February 2019 and will end in July. It has a budget of $ 3 million for financial payments and resulting research, $ 2 million from donations from foundations and individuals and $ 1 million from the San Francisco-based Economic Security Project, which supports economic efforts to fight poverty.
Natalie Foster, co-founder of the Economic Security Project and former Facebook employee Chris Hughes, said: “Whether it’s seeing people leaving secondary work behind or not driving five hours that day for Lyft or being more with their families, this feeling of well-being that $ 500 can bring them is very deep. “
The mayor of Stockton, 29, Michael Tubbs, grew up here in poverty watching his mother work long hours and rarely go away.
“Many people are struggling in our national economy, not just single mothers,” said Tubbs, the city’s first African-American mayor. “There are teachers, cops, firefighters, social workers, people who have a lot of credit card debit or student loan debt or increased housing costs. And everyone could use a little help. “
Most randomly selected participants are women (70%), and the overall group is 47% white, 28% African American, 11% Asian, 2% Native American, 2% Pacific Islander and 10% other . About 43% have full-time or part-time jobs, 20% are disabled or not working, 11% are babysitters and 11% are looking for work.
When researchers asked what they used the $ 500 for each month, recipients said 40% of the money was spent on food, 25% on merchandise and 12% on public services, according to a published report. by SEED officials last fall.
“People cover their basic needs and use the money in a way that makes sense for their families,” says Stacia Martin-West, who helps lead the SEED research team at Stockton.
She says she is not surprised that grocery shopping accounts for half of the expenses. “Food is the only thing you can control, it increases or decreases depending on the amount of resources.”
Stockton has gone through tough times
The city of Stockton is located in the heart of the San Joaquin Valley in central California. A massive river delta flows from San Francisco Bay about 70 miles inland to Stockton, giving birth to the Port of Stockton.
A racially diverse city – only 19% of its 300,000 or more residents identify as white, the rest being largely Hispanic and black, according to the census – Stockton has roots in the gold rush, but the past few years have had difficult times.
Crime, poverty and illiteracy are persistent problems; in 2009 and 2011, Forbes magazine named Stockton one of the most miserable cities in the country. In 2012, the city’s wrong direction, poor financial decisions, rising unemployment and a crippling housing crisis created by the Great Recession of 2008 led the city to declare bankruptcy. At the time, it was the largest city in the United States to do so.
Since coming out of bankruptcy in 2015, the city has improved its lot and has even been cited in 2018 as a model of fiscal responsibility by the California Policy Center. But its citizens still need help. Today, 66,000 of the 300,000 inhabitants of Stockton live below the poverty line, this 22% representing approximately double the national average. The poverty line is $ 12,000 for an individual and $ 24,000 for a family of four.
Stockton may be starting something. Local leaders from Newark, New Jersey, Milwaukee and Chicago are currently reflecting on their own UBI pilot programs, and Tubbs said he heard from state senators in Washington and Massachusetts, as well as city of San Francisco supervisors who are interested in copying the program.
With the income inequality gap in the United States, the need among the poor is dire. According to a report on economic well-being released last year by the Federal Reserve, 27% of Americans would have to sell something or borrow money if they suddenly had to raise $ 400.
“For the city of Stockton, which has had its ups and downs, for us to be now at the center of a global conversation about what capitalism and the economy look like in the 21st century, this is very special” says Tubbs.
It is unclear what type of long-term benefits the program will offer participants or the city. Stockton researchers are monitoring the effects not only on a family’s financial situation but also on their emotional well-being.
SEED researcher Martin-West predicts that a hypothesis will be confirmed when the UBI experiment concludes: that the $ 500 “will reduce the amount of stress and anxiety in the brain and body from the fluctuation of an unstable financial situation … Money provides a floor for people to rest their feet. “
Can Free Money Empower Families?
For Stockton resident Tomas Vargas, 36, receiving $ 500 more each month has changed his outlook on life. All this is a long way from 2012, when 13 of his friends were killed at a time when Stockton was in the grip of homicides.
Vargas is married and has two children under his roof, an 8 year old girl and a 6 year old boy; another child died, while another still lives with his parents. One of the things he managed to do with the UBI grant was Spring for Guardians for them. Her daughter wants to be an astronaut and her son is good at math.
“It freed me and just gave me another gust of wind,” says Vargas, who recently landed a new job at the local airport.
He remembers what it was like to become poor. Often he did not even eat dinner. School lunches, and sometimes breakfasts, were his only meals. As an adult, he still can’t go down the Hamburger Helper aisle of the grocery store without feeling uncomfortable because he ate canned food as much as a child when his family ran out of money. .
Nowadays, Vargas feels freer, psychologically if nothing else. He stops more often on his mother and sometimes lingers to tease his cat. And his new job brings him about $ 40,000, a sum that promises to provide him enough to help his young children reach their potential.
“Some people need encouragement and it’s rare to see someone give something to someone,” he says.
As an economic concept, UBI has deep but controversial roots in American politics. People as disparate as Richard Nixon and Martin Luther King, Jr., have talked about different versions of an UBI program. Conservative thinkers often argue that an UBI should replace expensive social safety net programs, while the Liberals insist that such a payment must complement these essential services.
More recently, UBI has been touted in discussions by Tesla founder Elon Musk and Facebook founder Mark Zuckerberg, who see it as a cover against job displacement fueled by technology.
Democratic Hope Yang specifically targeted tech companies during the election campaign, claiming that they are benefiting the most from today’s economy and, with the next era of artificial intelligence robots taking over, deserved to pay for an UBI.
Sukhi Samra, Director of SEED, says she is supported by some signs that key politicians are trying to close the growing income inequality gap in the country, even if not by specifically talking about a national UBI .
For example, she reports on California Governor Gavin Newsom’s extension of the earned income tax credit, which pays money back to low-income people, a a reform which, according to many economists, is the simplest way to put more money in the pockets of those who struggle on the margins.
Samra also cites national efforts to put more money in the pockets of low-income people, such as Senator Kamala Harris’ LIFT the Middle Class Act and representative Rashida Tlaib’s BOOST law, which would each provide $ 6,000 a year to middle and working classes. families thanks to a tax credit.
“It’s about trusting and empowering people,” says Samra. “For us, success means shifting the political conversation to another one where we recognize that everyone deserves an income floor and that the economy simply does not work in its current form for many people.”
Critics say Americans should make money
Not everyone agrees. Many politicians have argued that welfare programs prevent people from improving. President Donald Trump has repeatedly cut benefit programs since taking office, including announcing in December that some 700,000 unemployed workers will lose access to food aid this year.Administration officials have argued that people should only be eligible if they have found employment.
Even some labor officials are concerned about the implications of the UBI. Steve Smith, spokesperson for the California Labor Federation, said that jobs were indeed at risk due to massive leaps in automation. But he says that giving people, say, $ 1,000 a month to compensate for this impending change is “a Trojan horse” trotted by the tech community. Instead, Americans need better jobs and better wages, he says.
“It’s their plan to essentially prevent the forks from coming out when they start automating large-scale jobs,” said Smith, whose organization represents 2 million members in 1,200 unions. “In this scheme, inequality would be exacerbated.”
Smith says unions like his want a federal job guarantee like the one proposed by Democratic candidate Bernie Sanders. As part of the Vermont senator’s plan, citizens would be guaranteed stable employment that pays a living wage, with some 20 million jobs to be created as part of a proposed Green New Deal, and even more in care health and early childhood education.
For many Americans, the notion of free money in a country known for its top-down capitalism is far from easy to sell. A 2019 Gallup poll found that only 43% of Americans supported an UBI as a way to protect themselves from job losses linked to automation.
Many critics of the UBI tend to raise the same issues. Beyond the big picture – where the money would go for a multi-trillion dollar national program – there is the question of putting the value of work at risk. While some UBI researchers repeatedly point out that UBI-type programs and pilots suggest that a little regular check-up does not discourage recipients from getting a job, others remain skeptical.
“We have something in place that lowers your taxes to help you reach a level where you are doing well, and it makes sense to use tools that encourage work rather than just distribute money, because it is wellness and it doesn’t have to work, “says Peter Cove, author of” Poor No More “and founder of America Works, which helps those living on the margins find jobs.
In Stockton, four-time city councilor and critic of Tubbs, Ralph White, has reservations about his hometown’s UBI experience, in part because he thinks the money, which was randomly distributed, does not not really going to the needy.
SEED recipients all met the criteria for living in neighborhoods where the median income is $ 46,000 per year, but White says some residents earn as little as $ 1,000 or less per month, “and these are the people who need $ 500. “
White is also concerned about the lack of details disclosed to date on the 125 beneficiaries and wants to know, for example, whether they live alone or with an extended family, how much they earn each year, what their bills are for each month, and how many children they have.
“I’m against what I don’t understand,” said White.
Universal basic income gives new hope
For Everett, Stockton’s UBI program literally felt like it was sent from heaven. The $ 500 allowed her to regularly fill the tank of her own car but also that of her husband. The money also goes towards daily expenses such as his mobile phone plan, his home Internet bill and the doctor’s co-payments.
When her husband, who has worked as a contract truck driver, is not employed, becomes ill, or just needs a break, the couple now have extra money to fill the void.
“I know it’s God, there’s no way around it, all these people in this town,” she said.
Everett always collects recyclables for extra income and tries to save as much money as possible. As they do for other participants, these UBI funds offer him a safety valve every month against the sudden financial pinch points of life.
“These are the little pieces that are put together, they are less arguments in marriage,” she says. “It’s, you know, all of that.”
Things are getting better for Everett. She recently learned that her temporary job at the Tesla auto plant would become permanent, the perfect time as the SEED program begins its final stages.
When she’s not building high-end electric cars, Everett says she plans to take online courses to get a bachelor’s degree in accounting by 2024. She wants to become a certified public accountant. She jokes that Telsa’s founder Musk may need her someday.
If there is a misperception of a universal basic income that Everett would like to correct, it is the idea that money is a license to relax. If anything, she says, it’s just a lifeline out of poverty that keeps her positive.
“People say it’s extra money, but it’s not extra money,” she said. “It’s money you need now.”
Marco della Cava (@marcodellacava) is a national correspondent for USA TODAY based in San Francisco; Cassie Dickman (@ByCassieDickman) is the community diversity reporter for the Stockton Record, part of the USA TODAY Network.
