SACRAMENTO, California (AP) – The mayor of Oakland, California, announced on Tuesday a private financing program that will give low-income families $ 500 a month with no rules on how to spend them.
The program is the most recent experience with a “guaranteed income”, an idea that giving the poor a certain amount of money each month helps to alleviate the stress of poverty that often leads to health problems, while harming their ability to find full-time work.
The idea is not new, but it is being reborn in the United States after some mayors launched small temporary programs across the country in a coordinated campaign to convince Congress to adopt a national guaranteed income program.
The first program launched in 2019 in Stockton, California, led by former mayor Michael Tubbs. Tubbs, who founded the Mayors for a Guaranteed Income group, said about six similar programs in other cities are expected to be in place by summer.
“We designed this demonstration project to increase the body of evidence and start this relentless campaign to adopt an income guaranteed by the federal government,” said Mayor of Oakland, Libby Schaaf.
The Oakland Resilient Families program has already raised $ 6.75 million from private donors, including Blue Meridian Partners, a national philanthropy group. To be eligible, people must have at least one child under the age of 18 and an income equal to or less than 50% of the area’s average income – about $ 59,000 a year for a family of three.
Half of the vacancies are reserved for people earning below 138% of the federal poverty level, or about $ 30,000 a year for a family of three. Participants will be selected at random from a group of candidates who meet the eligibility requirements.
The Oakland project is significant because it is one of the biggest efforts in the United States so far, targeting up to 600 families. And it is the first program to limit participation strictly to black, indigenous and colored communities.
The reason: white families in Oakland earn on average about three times more annually than black families, according to the Oakland Equity Index. It is also a tribute to the legacy of the Black Panther Party, the political movement that was founded in Oakland in the 1960s.
“Income security has been a goal of the Black Panther platform since its foundation,” said Jesús Gerena, CEO of the Family Independence Initiative, which is a partner in the program in Oakland. “Direct investment in the community in response to systemic injustices is not new.”
The idea of guaranteed income dates back to the 18th century. The United States government experimented in the 1960s and 1970s, when Republicans Donald Rumsfeld, later secretary of defense, and Dick Cheney, the future vice president, oversaw four programs across the country during the Nixon administration.
These studies concluded that money did not prevent people from working, making Nixon recommend expanding the program. But it never passed Congress.
Decades later, proponents are trying again, only this time it is led by progressive mayors. The program in Stockton, California, ended in February. An independent review found that after a year of receiving the money, 40% of beneficiaries had full-time jobs, compared to 28% before the program started.
“The fact that mayors are testing (guaranteed income programs), using political capital to raise capital to allow their constituents to have basic needs, is a political failure,” said Tubbs. “It is an admission that we need to do more.”
It is not clear what a national guaranteed income program would look like. A proposal by former Democratic presidential candidate Andrew Yang could cost $ 2.8 trillion a year.
A form of guaranteed income may come into effect for many parents this year as part of the latest federal stimulus package. Congress expanded the child tax credit, with the goal of giving many parents monthly payments of up to $ 300 a month. These payments are temporary.
In California, a proposal by Congressman Evan Low to give $ 1,000 a month to adults on certain incomes could cost up to $ 129 billion annually – more than half of the state’s total budget – paid by a new 1% income tax. over $ 2 million. Low said the project is unlikely to pass this year, but said his goal is to make people comfortable with the idea.
“The initial shock seems to pass the more people are educated and realize the benefits of having more control over their lives,” said Low.
Critics, including unions, fear that these expensive programs may force the elimination of other safety net programs, such as Social Security and food stamps. But Schaaf said he did not regret that “social safety net programs must remain”
“We believe that these safety net programs should not go away, but they should be supplemented with unconditional money that gives families the dignity and flexibility to meet their needs,” she said.