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What would happen if you gave people $500 a month, no strings attached? Stockton, California set out to answer that question two years ago as one of the first U.S. towns to pilot a Universal Basic Income program. Former Stockton mayor Michael Tubbs joins Hari Sreenivasan to discuss the findings of this social and economic experiment — and what it could mean for America’s future.
For more on the potential success of guaranteed basic income programs, I spoke with the former mayor of Stockton, California – Michael Tubbs, whose two-year basic income experiment there is now providing data on the impacts of the program.
So, Michael Tubbs, there was the experiment the whole country was talking about. What happens when you give $500, no strings attached to people, what did you find?
We found that, number one, people did not stop working. In fact, we found that those who received the guaranteed income were more likely to find full-time employment and were less likely to be unemployed than they were before the guaranteed income, but also in comparison to the group of folks in the control group who unfortunately did not receive the guaranteed income.
We also saw that, no surprise, that the $500 allowed people to be better able to handle emergencies when they came up to deal with income volatility. And that we also found that health, mental health impacts, from something as small as $500. We saw that depression decreased. We saw that cortisol levels decreased. We saw that stress and anxiety decreased. And according to the Kessler scale, comparable to clinical trials of Prozac, which doesn't mean that medicine isn't important. But I think it does mean that economic insecurity has a huge mental health cost and so much of the anxiety and stress we see is due to economic insecurity.
And then we also saw that people were better able to do the three things governments designed to allow people to do, be better parents, be better partners and be better neighbors. They said they could breathe, that they were happier, they had space to think about things other than meeting their basic necessities. And I'm incredibly proud of those findings.
I should mention that this data looks at the year that ended right about when COVID started. So one of the critiques that people who are against any kind of guaranteed income always say is, you know what? How are these people going to spend this money, they're going to buy drugs and as you pointed out, they weren't lazy, that they actually went out and got jobs or they were more likely to be working. But what did they spend the money on?
And this is my favorite part, or all of it's my favorite, but this is a question we get the most, and everyone turn up the volume, make sure we get this one! Folks spend money the way you and I spend money, because the folks in the program are people, like you and I. So they spent their money on necessities, on their car, on childcare, on bills, on housing, on food. The largest expenditure every month before the pandemic, and during, was always food and less than two percent of money was spent on drugs and alcohol.
And what's fascinating to me is that I probably answered this question more over the past two years than Congress has had to answer in terms of the $2 trillion in government dollars we gave in tax cuts in 2017. I've got more questions about the million dollars in philanthropic money, how that money was spent, than $2 trillion of all of our dollars that went to the richest among us due to the 2017 tax cuts. And I guarantee you, my folks spend much better.
So we're going to wait another year until the data comes out of what happened between sort of last February and the end of this year and the end of last year. But I want to know kind of how do we take this forward? I mean, you are now running an organization where other mayors have signed on to this idea. Now, does that mean that these cities are going to roll their own guaranteed income plans out?
So we have about 44 mayors who are signed on to Mayors For Guaranteed Income, and many of those mayors have already begun doing pilots. So St. Paul, Minnesota, led by Mayor Melvin Carter, is doing a pilot using the first city in this country to use federal dollars using Kahrizak dollars and private dollars to provide a guaranteed income. We know that Richmond, Virginia, doing the same thing. Compton, California, is doing a guaranteed income pilot. I was just on a press conference with Paterson, New Jersey doing a guaranteed income pilot. Gary, Indiana, doing a guaranteed income pilot. San Francisco, California, doing a guaranteed income pilot for expecting mothers. Jackson, Mississippi, doing a guaranteed income pilot for Black mothers. A bunch more will be rolling out over the next couple of weeks.
So I think the goal behind these pilots are to show whether you're working with employed people, unemployed people, formerly incarcerated people, middle-class people, small business owners, whoever, whatever group you care about, a guaranteed income actually helps them and actually helps all of us. And the idea is to get it into a federal policy, some sort of guaranteed income federal policy, which we understand it's a long game.
Some of this was stuff we would expect to say, OK, well, people might, you know, spend it on basic needs. They might buy diapers, they might buy food with it. What were you surprised by when you looked at the aggregate data of how all of these people behaved for a whole year with this money?
I was surprised at how big of an impact something as small as $500 could have. Right. I grew up working poor, grew up in poverty. So I trust people who are economically insecure with my life those are the people who raised me, who taught me, who made me who I am. So I wasn't surprised with the decisions. I was surprised at the huge impacts. We're talking about something as small as $500, I would have thought we have seen more pronounced impacts of the $1,000, $2,000 level. But to see such huge impacts that $500 makes me even more adamant about the need for our policy because there's not a lot of money. I was also surprised with how expensive it is to be kind of economically insecure. I really underestimated how not having paid time off and having to survive paycheck to paycheck makes it very risky to take a risk. Where taking the day off of work to go interview for another job is a $200 risk that a lot of people don't feel comfortable taking, or they are the primary breadwinner and they live paycheck to paycheck. So that's what really kind of moved me was this notion that so much of our entrepreneurial brilliance, so much of folk's ability to assert themselves and to have agency is hampered by just not having enough money. So I think about that, not having enough money to interview for a job you're qualified for. That's bizarre to me, not having enough money to pay for childcare, that's like bizarre to me. How much potential we're wasting because people are working, and working hard, but aren't able to work in a way that maximize their gifts and talents.
So we've always heard that phrase time is money. But you're also proving here that money is time.
Yeah. And that's why I realize that's been my biggest takeaway, that when we talk about money, we're talking about agency and time and how you use your time. Now, as I reflect on it, all my very wealthy friends have complete agency over their time. They wake up every day and they decide what call they want to take, and what call they don't want to take. They decide, do I hang out with my kids today? Do I pay somebody to hang out with my kids? They just have so much choice every single minute of their day. I think, at a baseline, everyone deserves that dignity of being able to choose how to spend time in ways that maximize utility for themselves, for their families and for the wider community.
Michael Tubbs, with the Mayors For Guaranteed Income, thanks so much for joining us.
Thanks so much for having me.
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