The First U.S. Test of Universal Basic Income

I first wrote about Universal Basic Income (UBI) over two years ago, and the first test of it is finally coming to the U.S.

The basic premise goes like this – as people are phased out of jobs, why not just give everyone a paycheck? Imagine the government sending each adult about $1,000 a month (or whatever the right number might be), about enough to cover housing, food, health care and other basic needs for many Americans. UBI would be aimed at easing the dislocation caused by technological progress, but it would also be bigger than that.

Supporters argue machine intelligence will produce so much economic surplus that we could collectively afford to liberate much of humanity from both labor and suffering. Others see this as an opportunity to provide people the freedom to become artists, scholars, entrepreneurs or otherwise engage their passions in a society no longer centered on the drudgery of daily labor.

The first test of UBI will take place in Stockton, CA, where 100 residents will be given $500 a month for 18 months, no strings attached.

The concept of Universal Basic Income has gained traction and support from some Silicon Valley leaders, including Elon Musk, Richard Branson and Mark Zuckerberg, so it’s not a surprise that the first test of UBI is taking place close to Silicon Valley. It is seen as a way to possibly reduce poverty and safeguard against the job disruption that comes from automation.

The Stockton project has its roots in Silicon Valley, too. Its financial backers include Facebook cofounder Chris Hughes’ organization, the Economic Security Project — a fund to support research and cultural engagement around Universal Basic Income. It contributed $1 million to the Stockton initiative. (If I did my math right, that means that the Project is funding the entire initiative, since the total cost of the program would be $900,000. Which seems to imply that the city or state is not paying anything towards this UBI initiative, which must make the taxpayers happy.)

With a population of more than 300,000, and with one in four people living in poverty, Stockton was considered a great testing ground for Universal Basic Income. It’s also diverse: More than 70% of the city’s population identify as minorities.

The program is expected to start in 2019, and as you might imagine, Stockton residents are clamoring to get one of the 100 UBI spots. At this point, there are no details regarding how the selection process will work.

Program administrators hope to gather data from the UBI program so that they can assess its impact. For example, does a guarantee of a basic income affect school attendance and health, or cause people to quit their jobs or start new businesses? The project is also interested at looking at how the funds impact female empowerment and if it can help pull people out of poverty.

I am a fan of the UBI concept, and so I will be following this program and its impacts over the next couple of years. While I hope it will be a wild success, my guess is that there will be some bumps along the way. But given the mentality of many in Silicon Valley that failure is a good thing, such bumps will likely not be enough to stop experimenting with UBI until they get it right.

P.S. While this is the first test of UBI in the U.S., similar programs have already been conducted or are currently in progress by various organizations or governments in Finland, Italy, Uganda, Cambodia, Kenya, Canada, and India. Another pilot, backed by startup accelerator Y Combinator, will give 1,000 people in Oakland, California, $1,000 a month for up to 5 years.

 

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