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 percent 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 percent of participants receiving the stipend being employed full or part time, 20 percent are disabled, 11 percent are caregivers and another 11 percent 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 percent, 37percent and 28 percent 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
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 percent 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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This article was originally published on CultureBanx. It is reposted here with permission. Read the original.