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'Powerful in its simplicity': As the pandemic endures, mayors call for guaranteed income

Oakland Mayor Libby Schaaf said a guaranteed income is "probably the most powerful antidote for racial disparities" that she could enact.
Image: Melvin Carter
St. Paul, Minn., Mayor Melvin Carter, pictured in August 2018, laments "whole neighborhoods that are in deep poverty and doing the best they can."Jerry Holt / Star Tribune via AP file

Melvin Carter, the mayor of St. Paul, Minnesota, watched his city's twin, Minneapolis, burn this spring as people gathered in protest and fury over the death of George Floyd and the treatment of Black people at the hands of police. Carter knew his city's residents 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," Carter said. "Whole neighborhoods that are in deep poverty and doing the best they can."

A month before Floyd's death May 25, Carter's office had given 1,265 families one-time payments of $1,000 through a temporary program called the Bridge Fund. The emergency relief diminished some hardships, but it hasn't been nearly enough. Carter wants a longer-term solution.

As the pandemic devastates the bank accounts of American families, mayors like Carter are proposing guaranteed income experiments, or universal basic income, as a simple, scalable and equitable solution for families and local economies.

The March stimulus package known as the CARES Act, they say, showed that giving cash directly to people works. The $1,200 checks from the federal government, along with the Paycheck Protection Program — which helped employers make their payrolls — and the $600 weekly unemployment assistance payments, kept many people afloat.

But the assistance was limited, and weekly checks expired at the end of July. In their absence, these mayors said, the need for universal income has become more urgent because it could help address racial disparities that COVID-19 has aggravated.

Led by Mayor Michael Tubbs of Stockton, California, a coalition of 16 city leaders from across the country in June launched Mayors for Guaranteed Income, an initiative to promote monthly checks. 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 said on 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 go only to those in need, not to everyone regardless of wealth.

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 other essentials, like rent. While the mayors' joint venture was in the works before the pandemic, they said the pandemic and the protests only strengthened their case.

Carter, who signed on to the initiative in June, said he believes it would 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.

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Critics have long worried that aid recipients would spend lavishly or use the money as an excuse not to work. Finland's universal basic income pilot, which gave 2,000 unemployed residents monthly checks for two years, 2017 and 2018, failed in exactly this manner: Those who received basic income weren't picking up jobs faster, and they showed only a small boost in mental well-being and perceived economic security when compared to a control group.

It wasn't the impact advocates had hoped for, although experts say there were clear flaws in the program, including a rush to set it up, insufficient funding, diminishment of other benefits for those who received the cash and limiting of the trial to those who were already unemployed.

Over the years, guaranteed income has been endorsed across the ideological spectrum for different reasons, with champions from Martin Luther King Jr. and the Black Panthers to the conservative economist Milton Friedman and the right-wing political scientist Charles Murray, but it has never truly captured the attention of lawmakers. Americans on the whole haven't been particularly keen on the idea, which many say runs counter to U.S. ideals of hard work and self-made worth.

Yet as inequality and the cost of living have skyrocketed, it has started to draw the attention of the public. When 2020 Democratic presidential candidate Andrew Yang, an entrepreneur, offered up a form of universal basic income as a central plank of his campaign during the primaries, Silicon Valley elites threw their support behind the idea, and Yang took the concept to a wider audience, arguing that it would bridge the gap as jobs continue to be automated away.

And then the pandemic hit, and with it came the worst economic downturn since the Great Depression.

Image: Unemployment line
People who lost their jobs wait in line to file for unemployment benefits at an Arkansas Workforce Center in Fayetteville on April 6.Nick Oxford / Reuters file

"COVID-19 has shone a bright, hot light on our systemic failures," said Libby Schaaf, the mayor 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 signed the Mayors for Guaranteed Income statement. In recent years, Oakland, once thought of as the working-class sibling to San Francisco, has become unaffordable for many who have 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 said a guaranteed income is "powerful in its simplicity."

Schaaf, who has been criticized by activists who say she is too cozy with developers, acknowledged that it's "not the end of the work," saying issues like housing costs and fair wages must still be addressed, but she said she believes that, in the meantime, a guaranteed income could significantly help people, especially as the pandemic persists.

An antidote to the racial wealth gap?

The coalition of mayors also said that the universality of the idea is crucial to its success and that lessons can 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 can't lift up a person or a family the way a monthly check would, Warren said. Noncitizens didn't get checks, 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," said Warren, 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 study released in June by the Columbia University Center on Poverty and Social Policy found that had the CARES Act's benefits been equally distributed, they could have reduced poverty to pre-pandemic levels but that it left out many who needed it the most. Another study, published by Accountable.US in July, found that congressional districts with the highest Black populations got up to $13 billion less in paycheck protection funding than districts with the lowest percentages of Black residents. Now, experts say the government stimulus might actually widen already existing wealth gaps.

Warren said it's 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.

Schaaf of Oakland said a guaranteed income is "probably the most powerful policy antidote for racial disparities" that she could enact. "It all comes down to resources at the end of the day," she said.

Image: Libby Schaaf
Mayor Libby Schaaf gestures during a news conference in Oakland, Calif., in March 2018.Ben Margot / AP file

But critics, including some on the left, say that a guaranteed income isn't a panacea and that it 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 School, 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, say they support universal basic income because they think America should choose between guaranteed income or a broader system of safety nets. Liberal critics often worry that universal basic income would 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 that universal income might not reach those who need it the most, like youths who are homeless or housing-insecure, said Maurice Gattis, an associate professor of social work at Virginia Commonwealth University. Gattis said that prevention is crucial to solving poverty and that he believes a housing and health care guarantee would do more to help than a check every 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 the gap. To get the stimulus checks as quickly as possible, you had to have a bank account. But that excludes those without checking accounts, not to mention those without permanent addresses where checks could be mailed.

Carter, St. Paul's mayor, understands the criticisms. He said 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."