Stanford Politics

I

n the early morning hours of Wednesday, March 25, Senate Democrats and Republicans made a deal to enact the most extensive (read: expensive) economic stimulus package in U.S. history. The final $2 trillion proposal contains fiscal support for both the smallest and largest companies facing dire dips in revenue due to shelter-in-place and self-isolation protocols around the country and world. Additionally, it provides direct cash assistance to lower- and middle-income households, with supplemental aid for those who have had work hours cut or have been laid off due to COVID-19. (For complete view of the stimulus plan, check out this policy breakdown.) Since then, another stimulus bill has been introduced by Massachusetts Sen. Ed Markey, Vermont Sen. Bernie Sanders and California Sen. Kamala Harris, offering monthly payments to Americans for the duration of the pandemic. While this legislation is still very much up in the air, the idea of a basic income has quickly become a more feasible route to swiftly neutralize economic strife as more and more policymakers come out in favor of continuous income support for Americans.

However, a few programs delivering cash to citizens are already in effect around the country and the world, even in places as close as California’s Central Valley. Stockton, California has been a city searching for an economic second chance for the last decade. After being hit extremely hard by the Great Recession in 2008 and filing for bankruptcy in 2012, the chronically mismanaged city was known for high unemployment, bankruptcy and low literacy rates. Today, the city is in the process of recovering. While crime rates are dropping and the population is increasing, residents of Stockton still struggle to make ends meet. According to 2017 U.S. Census data, the median income for Stockton residents ($44,797) is still well below the median income for the rest of California ($61,818).

Through a program dreamed up by Stanford alumni, Stockton began to invest in a better way to support residents who struggle to survive in this Central Valley city. Started in 2019, the Stockton Economic Empowerment Demonstration (SEED) is America’s first-ever city-led guaranteed income program. A collaboration between the Economic Security Project, the Reinvent South Stockton Coalition, the Office of the Mayor and the residents of Stockton, SEED seeks to test out a simple yet innovative solution to poverty and inequality. Through the pilot program, 100 Stockton residents are receiving $500 per month with no strings attached for 18 months. With no work requirement or spending restrictions, the unconditional nature of this basic income sets it apart from other social programs around the country. “Something is structurally wrong when 40% of Americans can’t afford a single $400 emergency, when people are working two and three jobs, but can’t pay for necessities, like rent, healthcare and childcare,” said Stockton Mayor Michael Tubbs (’12). “We don’t have a work problem in this nation, we have an income problem, and it’s possible we have found the solution.” 

People-focused design was incorporated into every step of the development of SEED. In addition to partnering with independent researchers and public officials on the implementation of and feedback on the program, SEED required the input of Stocktonians from beginning to end. “We believe that the best investment to be made is in our people,” said SEED director Suhki Samra (’17). “We have a great opportunity to be a thought leader on guaranteed income in the United States… Immediately after we announced [the program], we went into the community design phase. Stockton is incredibly diverse, and we wanted that diversity represented.” During the initial planning of the program, SEED consulted a variety of community groups, including school boards, faith communities, low income housing developers, youth scholars and trauma informed care providers—just to name a few. According to Samra, the input from these different community stakeholders led Stockton to the conclusion that a basic income program might have a substantial impact on many facets of the lives of Stockton residents.

SEED also created a storytelling cohort of program participants to give the kind of feedback that can’t be quantified. This politically purposive sample of recipients volunteered to share their experiences with the income program and provide a unique, humanizing element to the evaluation of such a program. This is not only the most valuable data, but also the most moving. “Overwhelmingly, when we hear from SEED recipients, they’re not talking about what they’re spending that money on, but just that they have that extra money every month. It’s changing how they feel about the basics… They’re finally able to take advantage of the things that you and I might take for granted,” Samra said. According to SEED reports, participants describe less stress, more happiness and more time to spend with their children and spouses. SEED recipient Lorrine Paradela explains this relief herself, saying, “If I have to take a sick day, I know that I’ll still be able to make the rent.”

However, despite the program’s many positive outcomes and testimonies, it is not feasible to continue on longer than its original 18-month duration. Because SEED is funded entirely through the Economic Security Project and other foundations, the city of Stockton has little ability to co-opt the program for continuance. “We are a test case for what we can do for communities that are looking for a way forward in the 21st-century economy… In order to really scale at impact, it would have to be adopted by state or national policymakers,” Samra said. “Our hope is that, as the demonstration continues, the stories that come out of it will push that momentum forward.”

José Luis Sabau (’22), a former undergraduate fellow of Stanford’s Basic Income Lab, takes a similar view, noting the feasibility of a broader program. He asserts that trying to do a long term experiment would require a vast amount of resources that policymakers and citizens alike are not willing to invest yet. It’s difficult to pass a social program as large as basic income, he said, in “a country in which people debate whether or not healthcare is a human right.” Much of Sabau’s work at the Basic Income Lab revolved around organizing and compiling the Lab’s database, which includes articles on UBI’s impact on everything from dental services to inflation. Despite the challenges of enacting a large-scale UBI policy, Sabau still sings the praises of basic income policy outcomes. “It’s an idea that can appeal to all, because the values underlying UBI assert that Americans should not be constrained on their freedoms,” Sabau said. 

One goal of providing a basic income is to provide citizens with the ability to pursue goals that are not rewarded in the current economic model, as originally described by Irish philosopher and political theorist Philip Pettit. “If you have to quit a low paying job for whatever reason, you should not be forced to live on the street while you find other work. UBI allows people to exit that cycle of economic exploitation,” Sabau explained. Especially within the evolving economy of California, this becomes more and more relevant to residents who work without the benefits of paid time off or healthcare. And in the age of coronavirus, these “essential workers” are not only the employees most at risk of losing their livelihoods, but also the most at risk of contracting the virus. That being said, Sabau does not assume that UBI is a cure-all policy for some of California’s biggest issues. “There should be other social programs that specifically deal with major issues, for example, affordable housing in the Bay Area, that are more impactful. UBI does not solve systemic problems,” Sabau said.

As far as SEED is concerned, Sabau lauds the project for creating positive outcomes for its recipients. “[SEED] has a result of people paying off debt, which allows them to lessen the weight of the economic inequalities that exist here. That’s why I think SEED has been successful, because it gives Stockton residents that power when they had none,” Sabau explained. However, the short term of the experiment makes it hard to consider its results as a foreshadowing of longer term policies. “With all short term programs, there is a fear that people [who receive the basic income]will act differently than if they received UBI eternally, because they know that the money will go away,” Sabau said. In this case, “acting differently” does not insinuate that short term UBI program recipients act less responsibly. Instead, researchers like Sabau see recipients using their basic income to pay off “one-and-done” payments rather than choosing long-term investments that require continual payments, like education or healthcare. Especially in the U.S., which does not offer universal healthcare or free public college, ongoing UBI might alleviate the financial strains of medical care or education of many Americans over the course of decades. However, a family that knows that their basic income will only be a reality for two years will likely not invest in healthcare or education, because it would not want to be dependent on a source of money that would soon disappear. This is especially important in the context of the economic stimulus package’s proposed direct payment to Americans. While the one-time payment might help a family survive a month during this abrupt economic downturn, it would not provide the lasting benefits or security of a continuous income.

Stockton isn’t the only American city facing economic challenges. Especially in light of the unique economic catastrophe caused by COVID-19 and the growing insecurity of millions of Americans, UBI could provide a safeguard for the livelihoods of many in a time of unprecedented crisis. As unemployment continues to rise and cities are ravaged by the effects of the virus, the possibilities of increased and continued direct monetary assistance to Americans steadily become clearer. While there are still many questions surrounding the lasting effects of large scale basic income payments on businesses, the economy and government funds, the outcomes in Stockton point toward hope and security for individuals who might receive them.

---

Susi Arguello, a senior, is a staff writer for Stanford Politics.