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Outbreak reignites idea of universal basic income

The federal stimulus package that will provide relief checks to some families impacted by the pandemic, has reignited the idea of universal basic income. One testing ground for UBI is in Stockton, California, where a pilot program is underway. Hari Sreenivasan spoke with Stockton's mayor, the program's director and several researchers studying UBI as part of our series, "Chasing the Dream."

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  • Hari Sreenivasan:

    Universal basic income is an idea that has been floated in academic and think tank circles, and even made it onto the Democratic debate stage in the person of candidate Andrew Yang. But when it comes to actually implementing UBI … well, for that it's best to hear from the people putting into practice. In Stockton, California, a pilot program called the Stockton Economic Empowerment Demonstration–or "SEED"–has distributed $500 a month to 125 city residents for over a year. The program is philanthropically funded and will be completing its run this July. Joining me now to discuss the program and how UBI can help Americans during this time of national crisis are the minds behind SEED. Mayor Michael Tubbs of Stockton, California, SEED director Sukhi Samra, and the program's lead researchers, Dr. Stacia Martin-West from the University of Tennessee College of Social Work and Dr. Amy Castro Baker from the University of Pennsylvania School of Social Policy and Practice. Mayor, let me start with you, what was the reason for this experiment in the first place?

  • Mayor Michael Tubbs:

    The reason we started this SEED experiment was understanding that, even before coronavirus crisis, that a lot of Americans were living in a time of economic insecurity, severe economic insecurity. At that point, we knew that one in two Americans were one $400 emergency away from financial ruin. In Stockton, my city, 23 percent of the folks are at the poverty line, and I would argue another 30 percent, one paycheck away. And for all the things we're working on in the city, from education to violent crime reduction to economic development, I think at the heart of it is poverty and it's how many people are economically insecure.

  • Hari Sreenivasan:

    Stacia Martin-West, what kind of things are you measuring?

  • Dr. Stacia Martin-West:

    Sure, so what we're really interested in seeing is the public health impacts of a guaranteed income. The sort of data that we're collecting looks at things like stress and well-being, how people are doing psychologically, how they're doing in their families, how they're doing with employment. And the data that we've gotten back so far that the community was really interested to know–and I think most folks are–is how do people spend this $500, right? So what we've seen so far is that about 40 percent of the money has been spent on food. About 25 percent of the money each month is spent at big box stores or places like Wal-Mart and Target. So what this speaks to is that lower income families prioritize the needs of their families. And we can trust them to do so and we can trust them to make rational financial decisions.

  • Dr. Amy Castro Baker:

    What we know from a lot of years of social science and public health data is that most American households are food insecure. So, again, speaking to what Dr. West just said, it–when we think about the ways in which most families are struggling and living paycheck to paycheck, food is one of the things that's flexible, right? So it's one of those things that we can actually adjust our spending on. And what we're learning through SEED, which builds on a pretty big body of knowledge, is that the quality of food and the quantity of food shifts based on how much money is in the household.

  • Hari Sreenivasan:

    Mayor, I'm sure you've heard the counternarrative: this is not going to help anything, the people you give this money to are going to spend it the wrong way, this is essentially just a free handout. When this project was rolling out, how did you push back against that?

  • Mayor Michael Tubbs:

    The responses were multifaceted. I think the first response was, it really goes down, again, to fundamentally who to we trust as a country. In 2017, we had a conversation about tax cuts where a trillion dollars were given to the richest Americans and corporations, and I venture to say, I've received more questions about what people have done with the one million dollar philanthropically funded basic income demonstration than what all these folks did with trillions of dollars of our tax money in the form of stimulus. And it's because we implicitly trust people who have power or who are rich or who have positions to make decisions, while we don't trust people that are actually more in line and more similar to the vast majority of Americans, people like us, who are just regular working folks. And then number two, I think, in the research that the researchers have found illustrates to us that people are rational actors, that the issue with economic insecurity isn't because people are mismanaging money or isn't because people are dumb or isn't even because people are not working and they're lazy. The issues that people don't have enough cash, that our wages have not kept up with–with the cost of living or with utility increases and that people are actually making very complex and complicated decisions day by day, month by month based on the income that they do receive. And then the last thing I would say to folks is that this is not some foreign idea. This idea is deeply rooted in our American ethos and values, particularly around opportunity and particularly around the fact that everyone's contributing, that people, particularly women who are staying home and doing domestic work and caregiving, they're doing work and that's not being compensated. I think a basic income or income floor is a logical extension of some of the New Deal protections, etc.

  • Hari Sreenivasan:

    Sukhi Samra, this might be a procedural question, but how do people get the $500? Is it cash? Is that a check in the mail?

  • Sukhi Samra:

    So the money is dispersed every month on a prepaid debit card that we actually issued in folks' names. So everyone has what's called a focused card that has your own name on it and each month on the 15th or close to the 15th as possible, we load the $500. From there, folks are able to spend it just like you would any other debit card. They can transfer the money onto their own accounts and they can withdraw as well.

  • Hari Sreenivasan:

    Mayor, you know now that Congress is passing a massive bail out. Part of that includes a direct payment to individuals. When you hear this plan, what goes through your mind?

  • Mayor Michael Tubbs:

    It's a great start, but definitely far from a finish, particularly knowing that this crisis is going to be longer than one month, knowing that people will be out of work for longer than one month, and knowing that the impacts of this will last longer than one month, it makes no sense to persist that one month is going to be enough to help people navigate through this crisis. So I think it's a start, but I think the amount should be larger and that it should go as long as the coronavirus pandemic lasts.

  • Hari Sreenivasan:

    You're saying that they shouldn't just be a single payment, it should continue through this pandemic. I can hear members of the audience saying, wait a minute, how are we going to pay for that? Look at how long it took just to try to get this package approved.

  • Mayor Michael Tubbs:

    If you look at any kind of massive response, whether it's a war or a public health issue, our nation marshals the resources to do what's necessary to make sure we emerge stronger. I think in this instance with this pandemic, we have to dig deep and look at sort of almost–the president has called himself a wartime president, so we need a wartime budget, but one that's focused on arming the American people with the financial and economic security they need to fight back during these times.

  • Hari Sreenivasan:

    What kind of effect has this had? Are the people that are getting these five hundred dollars, are they drawing less on city services?

  • Mayor Michael Tubbs:

    What I've seen is that folks have actually availed themselves to more of the city services, but not in a draining or parasitic way, but to contribute. So I've met SEED participants at different community events and town halls and things of that sort and who are now engaged civically in their community because they feel seen and a part of, which is–which is phenomenal. But the research team and Suki would probably more granular information about, really, the impacts on social services that the city or the county provides.

  • Hari Sreenivasan:

    Sukhi Samra, do you have examples for how people are increasing their productivity in the city thanks to this money.

  • Sukhi Samra:

    Sure. Over the course of the demonstration, we've definitely seen folks becoming more civically engaged and feeling more involved. Maggie, who serves as a caretaker for her husband, who had a stroke, but who is now also writing letters to the record in support of, you know, stuff like the guaranteed income demonstration, when we had our primary, she was like, "I went and voted and I got my entire family to vote as well." So I think over and over again we're seeing that they're more–that they have a call to action that didn't previously exist.

  • Hari Sreenivasan:

    Mayor, this program is going to end. So let's say best case scenario, the researchers come up with great findings. How do you how do you keep this going?

  • Mayor Michael Tubbs:

    Yeah, absolutely. I think a big part of our strategy has been to kind of be open about the data and what we're learning, to invite folks in. And I've been having conversations with the senators and presidential candidates and governors and assembly people and the state senators, because the only way this will work will be at a statewide or national level. And I think the coronavirus pandemic gives us an opportunity to pilot what an emergency basic income would look like. And I think the data from this program and the stories of the recipients will give us an army of folks who could effectively advocate about how an investment directly in the hands of folks of the United States is the most important investment we can make as a country, as a state government. So I will continue on working and leading those advocacy efforts and–and hopefully in the next couple of years, we have some sort of income floor for the vast majority of Americans.

  • Hari Sreenivasan:

    Are there particular findings in the data that make you optimistic?

  • Dr. Amy Castro Baker:

    Yeah, I mean, part of what we're seeing so far is affirmation of what those of us who work in social services, social work, you know–things like behavioral economics have known for a really long time, which is that the people who budget best are people who are living at or below the poverty line. So contrary to our assumptions about how money is spent and who knows how to budget and not budget, what we're seeing with the early data is that people who are living paycheck to paycheck know to the day to the hour when their money's going to run out. So they came into the experiment having a plan for exactly where they were going to spend it, and that type of spending patterns and behaviors lowers anxiety and it increases healthy outcomes, right? So what we're seeing, you know, right now in that spending data is more affirmation that when we trust our people and we invest in everyday Americans who are the ones who are holding up the economy, that what we will see is not only positive health outcomes, but positive economic outcomes. You know, one of the things that we get asked a lot is, well, how much can $500 really do? It's so expensive to live in California, the economy's bad, housing's expensive. And what we've seen with Stockton is how far that $500 can go and the ways in which it's alleviating other problems in the markets.

  • Hari Sreenivasan:

    So to be clear, this is not a replacement for the city's safety net.

  • Dr. Stacia Martin-West:

    It absolutely is not. That's one of the key findings that we have from the Stockton experiment is that if you implement a guaranteed income, it has to happen alongside the existing safety net. The first feedback that we received from the city and from focus groups that we were conducting is how is this going to interact with my food stamp benefits or does this mean I won't be able to have Medi-Cal anymore? So that's more evidence of people making rational decisions for their families, right? Is it actually worth receiving this $500 if it means that I'm going to have a reduction in my SNAP benefits? So as we think about scaling this out, we have to have a plan that allows people to maintain the current level of benefits that they're receiving as well as receive the unconditional cash.

  • Hari Sreenivasan:

    Mayor, how prepared is Stockton, California for what could be a very long slog through this pandemic?

  • Mayor Michael Tubbs:

    I think as prepared as we can be for something that's unprecedented.

  • Hari Sreenivasan:

    Are you getting help from state and federal officials?

  • Mayor Michael Tubbs:

    We are working very, very closely with our–with our state and federal officials. I think like every other hospital system, we need more ventilators. We need more hospital beds. We mean need more ICU beds. And we're doing the best with what–with what we have and preparing accordingly. And I think our frontline workers are doing a phenomenal job. And I mean, again, this is something we'll–we'll have to learn from and make sure we have even more preparedness. But definitely like most other communities–our seniors–we are worried about a shortage of beds, of ICU beds and ventilators.

    And that's why, again, that stay at home directive is so important for folks to realize that we're being preventative, that we're trying to ensure that we don't become like Italy and other countries that are making very difficult decisions about how to allocate scarce resources. One of the biggest learnings for me just this past week was how, just given the world we live in, where this year it's coronavirus, next year or the year after it could be some natural disaster, couple years after that could be another public health emergency, that it's more important that we get the foundation set and ready now.

    So I was already sold on a guaranteed income, but now I'm more than sold because I see now, particularly in a world that move so fast, where things like this are becoming more and more commonplace, that folks need a firm foundation and, as my mom always says, if we get–if we stay ready, we won't have to get ready, so that folks are in a better position and next time some sort of pandemic or natural disaster happens, that this has to be part of our national resilience strategy. How do we make sure that every American has at least something to persist through what's becoming more and more common.

  • Hari Sreenivasan:

    Mayor Michael Tubbs of Stockton, California, Sukhi Samra, director of the SEED program there, Stacia Martin-West from the University of Tennessee College of Social Work, and Amy Castro Baker, University of Pennsylvania School of Social Policy and Practice, thank you all for joining us.

  • Mayor Michael Tubbs:

    Thank you so much for having us.

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