How cities can get guaranteed income off the ground

Guaranteed income is not a new idea – Martin Luther King Jr. called for such measures to be established in the 1960s as part of his campaign to abolish poverty..

Although the idea of unconditional, regular cash payments has been widely discussed, it has never really taken off beyond a handful of trials. Now, with the growing risk of job automation and the huge economic and social disruption from COVID-19, action is accelerating across several US cities.

This week, Twitter CEO, Jack Dorsey, gave a grant of US$15 million to the Mayors for a Guaranteed Income (MGI) coalition, which was formed in July. The funding is provided through Dorsey’s #startsmall initiative and follows his initial donation of US$3 million.

MGI said these new funds are being allocated to launch or expand guaranteed income pilots in more than 25 US cities including Columbia, Los Angeles, Madison, Pittsburgh, Providence, Richmond, Tacoma, Saint Paul and New Orleans, with more to be announced soon.

Outgoing Stockton Mayor Michael Tubbs, who founded MGI following the Stockton Economic Empowerment Demonstration (SEED), commented: “We are a nation in crisis and the last one of this scale yielded dramatic social reform; this is our New Deal moment. We need a social safety net that goes beyond conditional benefits tied to employment, works for everyone and begins to address the call for racial and economic justice through a guaranteed income. These pilots and the resulting evidence will be instrumental in shaping what the 2021 social contract looks like in America.”

What Works Cities, a Bloomberg Philanthropies initiative, recently ran a six-session programme with MGI and the Economic Security Project to help cities understand and think through guaranteed income options and approaches.

Cities Today caught up with Sukhi Samra, Director of MGI, on some of the key takeaways.

Sarah Wray (SW): How do cities think through whether a guaranteed income programme is right for them?

Sukhi Samra (SS): Each mayor brings a unique perspective to piloting guaranteed income based on their deep understanding of their constituents’ experiences with economic insecurity. MGI can provide guidance on what groups to focus on from a research and modelling perspective, but ultimately the mayor that was elected by residents of that city has the best understanding of what their city needs.

SW: Who might lead this work in the city and which colleagues do they need to work closely with?

SS: Guaranteed income pilots can be administered within the city itself, as is the case with Saint Paul’s People’s Prosperity Pilot, or by a non-profit in close partnership with the Mayor’s office, as with the Stockton Economic Empowerment Demonstration (SEED).

Regardless, we highly encourage buy-in from multiple stakeholders, including other elected officials, non-profit leaders, members of the faith community, etc.

SW: How can cities test the idea?

SS: Several cities have launched guaranteed income pilots already – and each has been tailored by the mayor and team leading it to be appropriate for that city.

The People’s Prosperity Pilot in Saint Paul will provide up to 150 families with US$500 per month, for a period of up to 18 months. Recipients are participants of College Bound Saint Paul. Richmond, which is focused on women with children under 18 who are employed but facing the ‘cliff effect’, where they are ineligible for public benefits due to income, but still not earning a living wage.

The Compton Pledge in California will deliver monthly payments of US$300 to 400 residents and US$600 to 400 residents for two years with a focus on racial justice. MGI can offer member mayors guidance on infrastructure, budget and research, as well as provide seed funding.

However it’s done, it is crucially important for cities to use data when evaluating outcomes of the pilot programmes as they are being implemented. This means setting up the appropriate data collection and evaluation systems so that the city can determine if the programme did what it was set up to do.

This is another way wherein partnering with a data-driven organisation like What Works Cities has been great for expanding and improving how guaranteed income might be replicated in other cities.

SW: How might it be funded?

SS: For city pilots, funding can be philanthropic, public dollars, or a mix of both.

There are a number of ways to think of funding it long-term, from a sovereign wealth fund in which citizens benefit from shared national resources like Alaska’s programme, to bringing tax rates on the wealthiest and corporations to their 20^th-century historical averages, and ensuring that capital gains are taxed at or above income from work.

SW: Is this likely to continue to be on a city-by-city basis?

SS: At MGI, we are supporting our member cities in creating pilots to demonstrate guaranteed income’s impact on individuals experiencing economic insecurity. We are also united as a coalition in our advocacy for a federal guaranteed income, though that could first take shape as an expanded earned income tax credit or cost-of-living refund at the state level.