The Science Of Universal Basic Income (UBI): Does It Work?

Then-Stockton Mayor Michael Tubbs, Aug. 14, 2019. (AP/Rich Pedroncelli)

Written by Dana Sanchez

Aug 23, 2023

The idea of universal basic income (UBI) — a regular cash payment given unconditionally by a government to all members of a community — became universally relevant in 2020 when tens of millions of households were able to cope with the financial impact of the covid pandemic thanks to $2 trillion in pandemic relief.

In response, many cities chose to test guaranteed income programs — similar in principle to UBI, but offered to a select portion of a city’s population instead of all residents.

While covid relief evaporates and the threat of a recession is upon the U.S., early adopters have completed free cash programs and published the results of multi-year pilot programs. More cities across the U.S. continue announcing new free cash programs for residents.

The promise of universal basic income is attractive to many. “The more local programs we launch, the more it seems to work,” Chase DiBenedetto wrote for Mashable.

A growing body of research based on experiments shows that guaranteed income works. It pulls people out of poverty, improves health outcomes, and makes it easier for people to find jobs and take care of their children, Megan Greenwell wrote in a Washington Post perspective article.

“If empirical evidence ruled the world, guaranteed income would be available to every poor person in America, and many of those people would no longer be poor,” Greenwell wrote. “But empirical evidence does not rule the world.”

Stockton, California, one of the poorest cities in the U.S., was an early adopter of free cash programs for residents. Stockton Mayor Michael Tubbs created a pilot program — one of the first of its kind in the U.S. — called Stockton Economic Empowerment Demonstration (SEED).

Research showed that SEED participants had greater financial stability, a higher rate of full-time employment, and significant improvements in mental health over those in the control group.

Launched in February 2019, SEED gave 125 randomly selected residents $500 a month for two years. The cash was unconditional with no strings attached and no work requirements.

The findings of the experiment showed:

1. Recipients of the $500 experienced less income volatility than those who did not receive the guaranteed income, allowing households to stabilize and plan for the future.

2. Unconditional cash allowed recipients to find full-time employment. In February 2019, 28 percent of recipients had full-time work. A year later, 40 percent were employed full-time. In contrast, the control group saw only a 5 percent increase in full-time employment over the same period: 32 percent of those in the control group were employed full-time in February 2019; a year later, 37 percent of control group participants were employed full-time.

3. Recipients were healthier, showing enhanced well-being and less depression and anxiety compared to the control group.

4. Guaranteed income alleviated financial scarcity, creating new opportunities for self-determination, choice, goal setting and risk-taking

The vast majority of people who receive money in free cash programs don’t “waste” it on drugs and alcohol, but rather use small amounts to improve their life circumstances dramatically, Washington Post reported.

Stockton’s program ended in early 2021, and Tubbs lost his reelection campaign to a Republican who showed no interest in trying to keep SEED going.

However, the Mayors for a Guaranteed Income coalition grew out of SEED and now has more than 90 members and dozens of programs, thanks in part to a $15 million donation from Twitter co-founder Jack Dorsey.

The idea of guaranteed income as a government-backed correction for decades of racist policies has spread to dozens of cities, many led by young, Black mayors, Greenwell reported.

In Baltimore, where more than one in five residents live below the federal poverty line, a guaranteed-income pilot gives $1,000 a month to 200 recipients, all of them parents in high-crime neighborhoods.

“We’re like the birthplace of racial redlining, right?” said Baltimore Mayor Brandon Scott, who recently launched a guaranteed-income experiment. “You’re not going to erase inequality, inequity that was caused by policy, without creating policy to do the opposite.”

Scott, 39, consults regularly with St. Louis Mayor Tishaura Jones, 51, whose city launched a guaranteed-income pilot in December 2021. St. Paul, Minn., Mayor Melvin Carter, 44, is co-chair of Mayors for a Guaranteed Income and a mentor to Tubbs, 33. Guaranteed-income programs have been launched in Columbia, S.C.; Shreveport, La.; and Atlanta, according to Washington Post.

”It’s no coincidence that these are the people plotting the future of guaranteed income in America, Scott said. “We’re the first group of elected folks who actually lived through all of the s—. We lived through crack and heroin. We lived through zero tolerance. So all the stuff that folks are now talking about, we understand it in a way that no one else will.”

While there are no federal UBI plans, at least 43 U.S. cities and counties have trialed free income plans. These include:

Birmingham, Alabama

Phoenix, Arizona

Compton, California

Los Angeles, California

Long Beach, California

Mountain View, California

Oakland, California

Santa Clara County, California

San Diego and National City, California

San Francisco, California

Sonoma County, California