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A California City Is Giving ‘No Strings Attached’ Money To Residents. Here's Why.

Stockton is giving $500 a month to more than 100 residents as part of a universal basic income experiment.

Stockton, California, is giving away money ― “no strings attached” — to more than 100 of its residents as part of a controversial experiment to combat poverty.

Mayor Michael Tubbs announced last year that the city would be collaborating with the Economic Security Project to see what kind of impact universal basic income (UBI) could have on the lives of the community’s most vulnerable citizens.

In its purest form, UBI refers to a fixed income that every adult would receive from the government. In Stockton’s case, a diverse group of about 130 adults who live in the city’s lower-income neighborhoods have been chosen to receive a monthly stipend of $500 for a period of 18 months, The Sacramento Bee reported. The first $500 prepaid debit cards were sent out to the chosen beneficiaries on Friday.

City officials say they hope the experiment — which is reportedly funded by a $1 million grant from the Economic Security Project, as well as another $2 million from private foundations and individual donors — will offer insights into whether a basic income program could be a long-term solution to helping lower-income residents.

“Maybe in two or three years, we can have a much more informed discussion about the social safety net, the income floor people deserve and the best way to do it because we’ll have more data and research,” Tubbs said.

He told Reuters last year that he learned of the UBI concept from the writings of Martin Luther King Jr.

Once referred to as America’s “foreclosure capital,” Stockton declared bankruptcy in 2012. Though its fiscal health has since recovered, one in four of the city’s residents lives under the poverty line and its median household income is more than $10,000 less than the national figure.

The Stockton program’s beneficiaries are free to use their stipends in any way they choose. According to CNN Business, researchers won’t be able to see the residents’ actual purchases but they will be able to track what categories they are spending the money in. Researchers will also be analyzing how the additional income affects the residents’ spending and living habits, and what influence it may have on their well-being.

Jackson, Mississippi, and Oakland, California, have rolled out similar programs. And Alaska has been giving its residents annual checks of $1,000 to $3,000 for decades ― money that comes from revenue the state receives from oil companies. Finland recently concluded a $22.7 million UBI experiment and thousands of people on low incomes in Ontario, Canada, were given up to $13,000 per individual as part of a year-long pilot program there.

Though some evidence suggests that a UBI model can have positive impacts on people’s health and well-being, the jury is still out on whether such a program is a viable, long-term option for cities or countries looking to improve their residents’ quality of life. 

Critics have stressed the potentially high costs of such programs. Doug Ford, a conservative currently serving as the premier of Ontario, halted the UBI experiment in his city in 2018, citing the “extraordinary cost” to taxpayers.

Detractors also argue that a UBI model could discourage people from finding gainful employment.

Proponents of the idea say basic income programs could play an important role in helping lift people out of poverty.

“The idea is to provide a foundation, a floor on which people can build,” Chris Hughes, a Facebook co-founder and co-chair of the Economic Security Project, told CNN Business.

UBI programs are not silver bullets, Hughes acknowledged, but they could “help the people who need it most,” he said.

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