Stockton's Basic Income Experiment

I have been interested in the concept of Universal Basic Income (UBI) since first hearing about it from my partner Albert years ago. I’ve mentioned it on and off here at AVC a bunch since then.

NYC will get its own UBI experiment if front-runner Andrew Yang is elected Mayor. Yang proposes to spend $1bn a year (out of an almost $90bn annual budget) providing $2k a year to 500k of NYC’s neediest citizens.

The theory of UBI is that giving people direct cash payments is more efficient and more effective than providing services to them via third parties. For example, if giving someone $2k a year keeps them in their apartment, the cost of operating homeless shelters and other housing for the homeless goes down. There are many more examples.

Skeptics of UBI point to the welfare system of the “Great Society” and other efforts to suggest that it won’t work and can’t work. They believe it will lead to idleness, drug use, gambling, and other societal ills.

So I read with interest of an experiment the city of Stockton CA did where they gave 125 randomly selected individuals making less than $46k a year a monthly stipend of $500.

The results are interesting. Researchers at the University of Tennessee and University of Pennsylvania concluded that this sample group saw many benefits including helping people get better jobs, better living situations, and better self worth. There was no evidence of increased drug use, gambling, joblessness, or any of the other concerns expressed by opponents of UBI.

I look forward to more experiments with UBI. One of the reasons that Andrew Yang’s candidacy for Mayor of NYC interests me is the opportunity to do a much larger experiment in a city that has a massive social infrastructure and lots of diversity. If UBI works in NYC, that will be very telling.