During his State of City address yesterday, Los Angeles mayor Eric Garcetti revealed that he has included $24 million to pilot a universal basic income program in his city budget. If it passes, LA would become the latest and biggest city in the United States to experiment with UBI.
Here’s what you need to know about the LA program and how it fits in with the broader effort to bring UBI to the USA.
How would the LA guaranteed income plan work?
The awkwardly named BIG: LEAP (Basic Income Guaranteed: L.A. Economic Assistance Pilot) program would distribute $1,000 a month to 2,000 families across the city for one full year. All would be at or below the federal poverty line, and there would be no strings attached—families would be able to spend the money on whatever they want.
This year, Los Angeles will launch the largest Guaranteed Basic Income pilot of any city in America: providing $1,000 a month to 2,000 households for an entire year, no questions asked, wherever poverty lives in our city. #SOTC2021 pic.twitter.com/pNJuOovn0M
— MayorOfLA (@MayorOfLA) April 20, 2021
“For families who can’t think past the next bill, the next shift or the next health problem that they have, we can give them the space to not only dream of a better life, but to actualize it,” Garcetti told LAist, which also reports that the specific selection criteria for households is still being decided upon but will likely include supporting a child under 18 and a demonstrated COVID-19 hardship. Los Angelenos, and undocumented Angelenos across the city’s council districts would be eligible.
Where else is UBI being tested?
Alaskans have been receiving a universal, unrestricted yearly cash dividend—essentially UBI by another name—from oil reserve royalties for almost 40 years. It’s also been tried in countries around the world, but in the U.S. the main group pushing for UBI is Mayors for a Guaranteed Income, a coalition of 43 mayors from cities across the country. Garcetti is a member of the coalition.
Aja Brown, mayor of nearby Compton, launched the Compton Pledge, a guaranteed income program for a city whose residents are disproportionately poor and otherwise marginalized. Similar programs are in the works in South L.A. and the San Fernando Valley, spearheaded by a City Council eager to use the more than $11 million in funds diverted from the LAPD budget.
But the first mayor-led guaranteed income initiative was the Stockton Economic Empowerment Demonstration. Launched by Mayor Michael Tubbs (who also founded MGI) in February of 2019, SEED is also the main source of data about the efficacy of UBI in the United States.
Is there any evidence it works?
There is! After a year in the program, the 125 Stockton residents who received money from SEED experienced a lot of benefits, from lower anxiety, fatigue, and depression to better emotional health and overall well-being.
And many of the warnings of conservative economists proved unfounded. Recipients of SEED money were twice as likely to obtain full-time employment, and not having to work as many part-time shifts and gigs gave them time to apply for higher-paying positions. They were also more likely to pursue internships, training, and coursework that led to better job prospects. Recipients also mostly spent their money on basic needs, with less than one percent going to alcohol and tobacco purchases.
Given this encouraging data, more mayors are likely to follow in Stockton’s footsteps and experiment with UBI. And if the pilot program in LA proves successful, more big-city mayors might come on board.