Universal basic income is working — even in red states


Tydricka Lewis, a 32-year-old single mother of three, purchased a reliable 2020 Nissan Rogue that became essential to her new job as a peer-support specialist. Her role involved assisting individuals in mental-health crises, requiring her to have reliable transportation. This car was a significant investment for Lewis, who wouldn't have been able to afford it otherwise. However, when she was chosen for Durham, North Carolina's guaranteed-income pilot program, she knew exactly where her monthly stipend of $600 would be best put to use.

In late 2020, Jack Dorsey, the CEO of Twitter at the time, pledged $15 million to Mayors for a Guaranteed Income, a national advocacy group. The aim was to assist various cities and towns across the country in implementing basic-income programs. Durham was one of the 25 recipients and received $500,000 from Dorsey, along with an additional $500,000 from local philanthropies and the city's funds.

Mark-Anthony Middleton, Durham's mayor pro tempore, played a crucial role in overseeing the program. He had been advocating for a basic income in his city for years. Middleton exclaims, "We wanted to see what a stream of income, without any determination of virtue or vice attached to it, would do."

Durham has undergone significant changes as its population has grown, with many lower-income and Black residents being pushed to the outskirts of the city. Once known for its Black commerce and vibrant Hayti community, Durham has witnessed a 51% increase in its white population over the past two decades, according to US Census data. Additionally, as wealthier residents moved in, the median home price in Durham rose by over 50% between 2010 and 2019.

To address this issue, the city of Durham decided to allocate the entire $1 million in basic-income funds to a specific vulnerable group: formerly incarcerated residents. However, this decision faced opposition from some taxpayers. As the program's launch approached in March 2022, Middleton received numerous messages filled with derogatory language from white residents of conservative counties near Durham, as well as from recent transplants from liberal strongholds like New York City and the Bay Area. They questioned why the city was supporting criminals, raised concerns about disincentivizing work through free handouts, and criticized the use of public funds to help individuals who, in their opinion, might not deserve assistance.

Middleton remained resolute in his response to these criticisms, acknowledging its "selfish" nature. He explained, "We're going to have to pay for these people one way or another, either in incarceration, benefits, homeless shelters, whatever it is. It seems to me that spending more money up front makes more sense than housing folks, monitoring and feeding them, and taking care of their healthcare in prison." Middleton urged skeptical taxpayers to consider universal basic income from a "selfish point of view," emphasizing that ensuring a certain standard of living for all residents is a beneficial policy.

While the data is still limited, basic income has proven to be a positive policy wherever it has been tested in America. The Durham program represents one of its most significant trials to date.  

Throughout American history, the concept of the government guaranteeing a certain amount of money to its citizens has been a topic of discussion, although it has often remained on the fringes of policy. As far back as 1797, Thomas Paine argued in his pamphlet "Agrarian Justice" that every citizen should receive a lump sum upon reaching adulthood. During the Great Depression, Louisiana's governor, Huey Long, proposed an annual guaranteed income for households ranging from $2,000 to $3,000 (equivalent to $40,000 to $60,000 in 2023). In 1972, when Senator George McGovern ran for president, he suggested providing a $1,000 check annually to every American. Despite facing opposition during the eras of Reaganomics and Clintonomics, the idea of universal basic income resurfaced as a significant platform point during the 2020 presidential campaign, championed by candidate Andrew Yang.

The renewed interest in universal basic income stems partly from the fact that "we now have a greater degree of inequality than before the Great Depression," as noted by Anna Jefferson, a principal investigator at Abt Associates who studies data from basic-income programs across the country. Over the past few years, as a result of the economic repercussions caused by the pandemic, theories that have been discussed for centuries are finally being put to the test. Numerous cities across the country have initiated basic-income pilot programs, and the initial results have been overwhelmingly positive.

For instance, in Denver, over 800 vulnerable residents received monthly stipends of up to $1,000, which led to a reduction in homelessness, increased employment rates, and improved mental health outcomes. A similar program in Stockton, California, saw the unemployment rate among its 125 participants nearly halve. Researchers at the University of Pennsylvania studying the program concluded that it could have "profound positive impacts on local public health."

Pilot programs have emerged in various cities, ranging from liberal strongholds like Los Angeles and Baltimore to more centrist and conservative cities such as Columbia, South Carolina; Birmingham, Alabama; and Gainesville, Florida. The Florida-based program called Just Income also targeted stipends towards formerly incarcerated individuals, driven by a rationale similar to Middleton's in Durham. The director of the Gainesville program explained, "It costs Floridians about $28,000 a year to hold someone in prison. Alternatively, we're investing just $7,600 directly to one of our valued neighbors, giving them a vital income floor." Universal basic income has consistently shown positive effects on health outcomes, employment rates, and childcare opportunities in various cities and for different demographic groups, including the elderly, young, single parents, and ex-convicts, outperforming control groups.  

The evidence overwhelmingly supports the success of universal basic income programs. According to Jefferson, who studies data from basic-income programs across the country, unrestricted cash transfers have an immediate and remarkable impact on recipients' financial stress and mental health. With more concrete evidence rather than hypothetical projections, it is clear that the concept of universal basic income is working effectively.

In Durham's guaranteed-income program, known as Excel, eligibility criteria required applicants to be Durham residents aged 18 or older, have a history of incarceration no later than 2016, and fall below 60% of the city's annual median income. From a pool of 247 eligible applicants, 109 were randomly chosen as recipients, while the remainder formed the control group.

Middleton emphasized that the money provided by Excel had no strings attached. Recipients were free to choose how they used the funds and were not required to report or justify their spending to the program administrators or the city. Each recipient received a prepaid debit card loaded with $600 per month for a year, totaling $7,200 to be spent as they saw fit. The recipients used the money for essential expenses like rent, clothing for their children, medicine, and even occasional indulgences like weekend trips or paying off student loans.

This spending pattern aligns with the experiences of basic-income recipients nationwide. While it is difficult to track every dollar, the majority of recipients use the stipends for basic necessities such as healthier food, educational supplies, and support for their children's extracurricular activities and development.

Tydricka Lewis, who had been juggling multiple jobs after her release from prison, saw the Excel money as an opportunity to purchase a reliable car. With a stable transportation option, she could better provide for her family and escape the cycle of poverty. The car also brought her peace of mind, knowing that she and her children would no longer have to worry about breakdowns during Durham's freezing winters.

The early success of Excel is evident in the increased rates of employment and stable housing among recipients. Remarkably, the program achieved a zero-percent recidivism rate throughout its one-year duration. Researchers from the University of Pennsylvania plan to analyze data comparing the outcome of recipients to that of the control group in 2024. Encouraged by these early results, Durham County aims to launch a new pilot program offering $750 per month to 125 local families with children, whose incomes fall below 30% of the county's median.

While these pilot programs show promise, the prospects of implementing a truly universal basic income in the United States remain distant. Empirical evidence continues to demonstrate the positive impact of such programs, but broader implementation may face significant challenges.  

According to numerous studies, lifting people out of poverty leads to significant increases in tax revenue and savings on public assistance programs. This suggests that providing a guaranteed income could pay for itself by reducing the need for food assistance, housing subsidies, involvement in the criminal justice system, and healthcare burdens. As more pilot programs produce similar positive results, it may help change public opinion and demonstrate the long-term benefits of guaranteed income.

For Tydricka Lewis, receiving basic income enabled her to establish her own nonprofit called The New Generation Movement. The organization offers peer support to young girls who have experienced poverty and single-parent households, and some have been involved in the criminal justice system. Lewis takes them to cultural and sporting events, hosts social gatherings, and helps them envision a better future through vision boards.

Nevertheless, Lewis continues to face financial struggles despite earning more than ever before. Keeping up with Durham's rising cost of living has proved challenging. Recently, her rent for a two-bedroom apartment increased from $1,486 to $1,680 per month, leading Lewis, along with her two children and niece, to move in with her mother. These circumstances have made her feel like she and her family are being displaced from their own community. However, Lewis remains determined to break the cycle of poverty and is confident that they are on the path to a better future.  

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