Cities face a number of labor-related challenges, including job automation, precarious work arrangements, economic insecurity and growing inequality. Universal basic income (UBI) is a potential solution.
UBI is an unconditional cash payment that either supplements or replaces existing social welfare systems. Unlike traditional programs, which are conditional and means-tested, UBI provides recipients with the autonomy to utilize resources how they see fit. It’s also scalable in cities and shares some features with, and is complementary to, programs like the Federal Earned Income Tax Credit, the Child Tax Credit and Social Security.
In order to explore the possibility and utility of UBI within a wider suite of local experimentation in the social sphere, NLC partnered with the Stanford Basic Income Lab (BIL) to release the first-ever definitive report for piloting UBI in cities. The toolkit, Basic Income in Cities, is meant to serve as a guide for cities considering piloting UBI, highlighting the history of UBI from the 18thcentury to present as well as providing case studies and best practices from around the world.
Between 1979 and 2013, studies show that earnings have grown 192 percent for the top one percent of wealthiest Americans, but only 46 percent for the bottom 20 percent. And in the next few decades, millions of jobs could be in jeopardy due to automation. Many people, from tech billionaires like Elon Musk and Mark Zuckerberg to a growing list of politicians, are starting to see UBI as a way to curb these detrimental effects.
UBI could potentially satisfy those on the political left and right by providing a stronger social safety net and expanding individual liberty. The cash payment could be used by people to spend on anything from food and housing to seed money to start a business and anything else in between — the choice would be in the individuals’ hands.
But ultimately, cities cannot do it on their own. A fully implemented national- or state-level UBI will need a large amount of support from all levels of government; in the meantime, cities are able to institute pilots to provide a track record of success and identify challenges to overcome.
Already, we have seen great success with the Alaska Permanent Fund, which while not a true UBI, shares similarities, including a universal payment from oil dividends for all permanent Alaska residents. This fund has proven incredibly popular and stories abound of people utilizing it to pay their bills, go to school or help someone in a pinch. But since this cash payment topped out at around $2,500 a year at its height, it is not meant to replace, but rather to supplement, people’s incomes.
We also saw a swath of UBI experimentation in North America in the 1970’s. President Nixon launched a series of negative income tax experiments in multiple states, overseen at the time by Dick Cheney and Donald Rumsfeld. The first Prime Minister (Pierre) Trudeau of Canada also launched a large scale UBI program in Manitoba. Additionally, a number of Native American tribes have built UBI-type programs from shared gambling revenue.
And, just in the last few years, successful pilots have been launched in Finland, Kenya, India and Canada (again), and the city of Stockton, California, is planning to pilot UBI in 2019.
On the private sector side, Sam Altman, the billionaire co-founder of venture capital firm Y-Combinator — with funding successes like AirBnB — in 2017 launched a self-funded multi-year experiment. The effort first launched in Oakland and is now expanding to other places. Verifiable results will be available at the conclusion of the program.
The report provides a series of recommendations for cities that include:
- Identifying goals of a UBI pilot;
- Choosing stakeholders and partners, and deciding when they should get involved;
- Deciding who should qualify for the pilot;
- Implementing a successful program; and
- Creating a communications team and strategy.
Cities are uniquely positioned to lead the country forward through innovation and ferocious experimentation. UBI could serve as the basis for expanded entrepreneurialism, better health outcomes and less precarious working conditions for a wide swath of the workforce. There is no one policy mechanism that is ever the panacea, but foundationally there is a great deal of research that demonstrates how cash-based programs have created positive outcomes for people.