mayors for a guaranteed income
Updated September 23, 2021

Mayors for a Guaranteed Income—The First Step Toward a UBI?

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Mayors for a Guaranteed Income and some other organizations are now advocating for a universal basic income, also known as a UBI. Now if you’re not familiar with the idea of a universal basic income, it’s essentially a program in which governments pay a certain amount of money to all citizens, or at least all adult citizens. And the main difference between UBI and other forms of welfare like food stamps or unemployment is that UBI is distributed to everyone regardless of their financial situation. So there are no eligibility requirements other than just being alive. Again some of the details can vary depending on the plan—for example, there could be a debate about whether to include a full or partial payment for children, whether to include permanent residents or only citizens, things like that. But the basic idea behind it remains the same—you get the money, we get the money, even Jeff Bezos gets the money, hence the name UNIVERSAL basic income.

Why Do We Need UBI?

Now a lot of people have immediate reactions to the UBI plan, and that’s understandable. It’s a very unconventional idea, and it goes against our intuition that government aid should target the people who need it the most and also goes against some people’s sense that people should have to work for their money and not just be given “handouts.” I’m not here to tell you whether or not you should support a universal basic income, there are good arguments in favor of it, and there are also some good arguments against it, but I do want to explain the arguments behind it before moving on to Mayors for a Guaranteed Income, which I’ll talk about later on in the video.

The universal basic income isn’t exactly a new idea, but it gained a lot of visibility when Andrew Yang made it the focus of his 2020 presidential campaign. Obviously he didn’t end up winning the nomination, but he was able to spread that message and get more people talking about what had basically been a fringe position. His proposal, the Freedom Dividend, called for monthly payments of $1,000 to every adult citizen of the United States. Again he didn’t include children in his plan, but that’s another idea that would have to be considered if this ever became a real possibility. And one caveat here is that people who are on benefits like welfare or food stamps would have the option to keep those benefits or switch to the UBI.

So the checks wouldn’t necessarily be coming along with other benefits, they would actually be replacing them. And this leads to one of the main arguments for a universal basic income, which is that making the money available to everyone allows you to provide the same safety net without spending millions of dollars on a bureaucracy that’s responsible for determining whether people qualify for specific benefits. According to his website, Yang believes that a UBI would actually encourage people to look for work since, unlike unemployment insurance, it doesn’t go away once you get a job. I think that’s probably true for some people but not as true for others.  Regardless, in general, people would obviously be more financially secure and less dependent on their employers for income if they were receiving a consistent income from the government. This could also give entrepreneurs more money to rely on in the early stages of growing a business, leading to more successful startups. So there are some arguments to be made that a universal basic income could have a positive impact on the American working class and our economy in general.

That said, there are some good arguments against UBI, for one thing is for certain: implementing UBI would create a massive redistribution of wealth in the country that would rub against many people’s notion of fairness.

Some people say it could result in inflation, but the reality is that UBI likely wouldn’t be paid for as much by the government simply printing new money as it would be by taking the existing money in certain people’s pockets and putting it in other people’s pockets.

Now like I said I’m not here to convince you one way or the other regarding UBI.  I want to tell you about this coalition called Mayors for a Guaranteed Income.

This coalition was just created in June, and it’s made up of 16 mayors from cities around the United States including Los Angeles, Seattle, Atlanta, St. Paul, and Oakland. Again the UBI isn’t something that has actually been implemented on a large scale, but several of the mayors have been involved in UBI pilots in their own cities, and it’s still a big development just to have major politicians calling for a universal income in the United States. There have been a few smaller experiments both within the US and in some other countries, but we are still waiting on a full implementation to really see what this would look like in practice.

One of the main experiments UBI advocates have been pointing to recently is the program run in Stockton by Michael Tubbs, the city’s mayor and founder of Mayors for a Guaranteed Income. Other pilots are also taking place in Jackson, Chicago, Newark, and Atlanta, and I’m sure there will be more in the near future. As part of the Stockton Economic Empowerment Demonstration (SEED), 125 citizens are receiving a debit card with $500 per month for 18 months. SEED is intended to act as a kind of trial run, giving researchers and policymakers the opportunity to see a universal basic income experiment in action. What is the effect on these individuals’ lives?  Does it really disincentive them from working?  What’s the effect on their happiness?  How does it change their lifestyle or spending habits?

So these individuals’ expenses are constantly being tracked in order to give us a better idea of what people would do with a universal basic income. And obviously there’s a big difference between running this program for 125 people and scaling it up to an entire city or state or nation, but again these are just the first steps. We’re still pretty far off from UBI being implemented at the state or federal level, so there will probably be a few more of these experiments as they continue to work out the details.

Funding is one of the biggest challenges for these experiments, so most of the early tests have been funded by philanthropists. These are people who are willing to donate their money in order to promote the universal basic income and help to generate more data. Jack Dorsey, for example, the CEO of Twitter, donated $3 million to Mayors for a Guaranteed Income to fund upcoming projects. And in my opinion these programs will continue to be dependent on wealthy donors for a while or at least until taxpayers are willing to buy into the idea of a universal basic income on a larger scale, which could possibly never happen.

So that takes me to the question from the title of the video, is this the first step toward a UBI? And ok maybe it’s not the first step, but it could be an important one when it comes to turning these ideas into a reality. Universal basic income plans have always popped up from time to time, but they’ve never had sustained support from mainstream politicians like we’re seeing now. When this many mayors of some of the largest and most powerful cities come together for a UBI, to me that’s a clear sign that for better or for worse, Universal Basic Income may not be a fringe idea for much longer.

Now I think this is a big development, but I don’t want to overstate things. Do I think any state will create a universal basic income in the next ten years? No. And it’s hard to say whether this movement will keep catching on or whether it will die back down as it has in the past. So overall I think you’ll start to hear more about the UBI over the next few years, we’ve already seen household name Democratic politicians like Kamala Harris and Bernie Sanders essentially propose a limited UBI with respect to stimulus, but honestly we’re still a long way off from the idea really taking hold in the United States at a national scale, and frankly it may never take off in our lifetimes. Maybe I’m wrong, maybe Yang or someone sharing his ideas wins the presidency in 2024 or 2028 and we have a federal universal basic income, but I think there’s a pretty slim chance of that happening in the next decade at least.

Alright, folks, just wanted to keep y’all informed about this coalition called Mayors for a Guaranteed Income.  Let me know in the comments what you think about UBI.  A great idea?  Completely dumb?  Not sure?  Comment below, please keep the discussions civil, and thank you for watching.


Logan Allec, CPA

Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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