Universal Basic Income Comes To California With $500 Monthly Upgrade
By CultureBanx Team
Stockton, CA is testing out UBI by giving 125 people $500 per month for 18 months
The city has a 14% African American population
In the last several years, there has been a real concerted effort to bring Universal Basic Income (UBI) to the forefront and Stockton, CA has taken the plunge. This is a city with a 14% African American population, where 125 people were selected to receive a $500 monthly allowance for 18 months. Could this be the true path to economic parity, or will this type of monthly cash aid program enable bad behavior?
Why This Matters: UBI is a system of wealth distribution where people receive a guaranteed livable income that would meet basic human needs. Stockton’s program kicked off in February of this year with 43% of participants receiving the stipend being employed full or part time, 20% are disabled, 11% are caregivers and another 11% are looking for work, according to the report. The racial breakdown highlights a diverse set of participants who are white, Latinx and Black at 47%, 37% and 28% respectively. All of them have an average median monthly income of $1,800 without the stipend. Participants are mostly spending the extra money on food, clothes, and utility bills.
By providing a basic income, UBI could level the financial playing field in the African American community, after generations of income inequality. In 2016, white families had a median net worth of $171,000, compared with $17,600 for blacks and $20,700 for Hispanics. Put another way, nearly half of black and Hispanic households had a net worth of less than $50,000 in 2016, compared with about a fifth of whites, according to a 2017 report from the Federal Reserve.
Google (GOOG +0.56%) futurist and director of engineering, Ray Kurzweil, predicts Universal Basic Income will be widespread by 2030. Tech giants such as Tesla’s (TSLA +1.29%) Elon Musk and Facebook’s (FB +2.31%) Mark Zuckerberg have even supported the idea, as well. Not to mention that Democratic presidential candidate Andrew Yang’s “Freedom Dividend” entails the government sending a $1,000 monthly check to every American adult over 18.
What’s Next: Experts say the costs of implementing basic income on a large scale would be astronomical and would cost around $3 trillion a year. The experiment is definitely not without its limitations in ascertaining how a basic income actually changes behavior. However, Chicago, a city with a 30% black population is currently designing its own experiment around Stockton’s pilot. Also, Hawaii is considering the idea of a statewide UBI. It’s not only U.S. cities testing out UBI trials, countries including Finland and Canada have done so as well.
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