For a growing cadre of mayors across the country, the COVID-19 pandemic has exposed more than just the stubborn racial inequity built into the U.S. economy. It has also exposed what’s possible in a modern-day economy — universal basic income.
“We don’t have a funding problem, we have a priorities problem,” said St. Paul Mayor Melvin Carter, in a press briefing last week. “This is a concept, frankly, that is far more controversial in halls of government than on any street in America.”
The press briefing, organized by Mayors for a Guaranteed Income, featured more than a dozen other mayors from across the country. The coalition started with 11 members in June 2020, and at the briefing, the coalition announced 14 new members. These mayors have all committed to funding or exploring basic income pilots in their cities — as a hopeful first step towards a federal universal basic income program.
Proposed in various forms for decades — including by Martin Luther King Jr. — and recently popularized by presidential candidate Andrew Yang (who called it a “Freedom Dividend”), universal basic income is exactly what it sounds like: direct cash assistance for everyone.
A recent poll by The Hill found a majority of voters now in support of a universal basic income, up 12 percentage points from just one year earlier.
But the mayors on the press briefing universally recognized the uphill battle they face convincing policymakers in Washington D.C. that universal basic income is the way to go. They see a need to fight back against the old racist tropes like “welfare queens” spending government money on junk food and drugs, stereotypes created to justify severe cuts to social safety net programs in the past. And of course there are persistent questions about how to pay for a nationwide, universal basic income program.
“Guaranteed income has to be a federal solution,” said Stockton Mayor Michael Tubbs. “But we understand Washington can’t move as fast. We need to give folks in D.C. the stories and the cover to do this.”
Guaranteed income or universal basic income has its critics, who worry it will reduce the incentive to work or that it costs too much. But it has had an unusually broad mix of supporters.
Martin Luther King Jr. supported it as part of the civil rights vision for economic justice.
Conservative economist Milton Friedman supported basic income as a more efficient social safety net than the raft of programs introduced by the time of President Lyndon B. Johnson and his Great Society agenda. His idea to implement it through a tax credit seeded the idea for what is now the Earned Income Tax Credit.
Silicon Valley moguls and investors support basic income for different reasons, including as a social safety net solution in response to increased automation. Facebook co-founder Chris Hughes is one of the forces behind the Economic Security Project, which prominently partnered with Stockton Mayor Michael Stubbs to run a basic income two-year pilot program that started in 2018.
With the end of Stockton’s pilot approaching, Mayor Tubbs and Economic Security Project expanded on their partnership to launch Mayors for a Guaranteed Income in June.
The other mayors on the briefing last week were at various stages of basic income pilot programs in their cities.
Some are funded entirely with private philanthropic dollars, like the HudsonUP program in Hudson, New York. The Hudson program is providing $500 each month for 5 years to just 25 recipients living within city limits and earning up to the median income for Hudson, $35,153. Chosen at random, participants may be single or married, with children or not. The lottery is weighted by equity and overseen by independent researchers at the University of Pennsylvania and the University of Tennessee Knoxville.
“We want to demonstrate the power of basic income,” said Hudson Mayor Kamal Johnson. “I believe in investing in human initiatives, not entities.”
Others, like St. Paul, are combining public dollars with private dollars. Mayor Carter described his city’s plan to provide 150 families with $500 for eighteen months. Applicants for the program must demonstrate an impact from COVID-19 in terms of reduced work hours, inability to find affordable child care or illness. The recipients will be chosen from within four of St. Paul’s most diverse and lowest income ZIP codes. The $1.5 million program will be mainly funded from private philanthropy, with $300,000 coming from the city’s allocation of CARES Act funding.
When pressed, Mayor Tubbs reiterated that the group’s collective end vision is for universal basic income, federally funded. The idea with the smaller pilots is to generate quantitative and qualitative data to convince federal policymakers, especially those who still believe in the racist stereotype of the “welfare queen” that emerged in the 1970s and 1980s.
“We’re disproving all of the racist tropes that say if you give low-income people money they’ll do XYZ with it,” said Mayor Carter.
The group also sees a wide range of knock-on effects to their communities. Mayor Shawyn Patterson-Howard of Mount Vernon, New York, touted the boost for small businesses in her community that would come from universal basic income. “When you give money to big businesses, they invest in offshore accounts,” said Mayor Patterson-Howard. “When you give money to people, they’re going to spend it in their community.”
Mayor Patterson-Howard is one of the new additions to the group. She was only able to verbally commit to a public and privately funded basic-income pilot program.
On the question of how to fund a universal basic income program, the COVID-19 pandemic has emboldened the group. There’s the evidence that the initial round of $1,200 economic impact payments helped keep 10 million families from falling into poverty. But even more emboldening, has been the massive amount of aid and low-interest lending that the federal government has made available to large corporations in the wake of the pandemic.
“These people are printing money, so the idea is the money is there, but the will is not there,” said Newark Mayor Ras Baraka. “They’re finding money somewhere, giving it out, and arguing about who gets it. We’re saying this is where it needs to go, and we want them to understand it needs to be in perpetuity, not just a one off thing.”
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.
Oscar is Next City's senior economics correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.