Universal Basic Income Comes to Oakland and Marin County -- What Could Go Wrong?

(AP Photo/Rich Pedroncelli)

Buoyed by the success of the 2019 Stockton, California Guaranteed Basic Income experiment, the City of Oakland plans to deliver the same to its minority residents.

Low-income families of color in Oakland, California, could receive some extra financial assistance over the next year and a half.

Oakland Mayor Libby Schaaf announced this week that the city will launch a guaranteed income project to give hundreds of Black and Indigenous families and people of color $500 per month for 18 months.

The project’s payments will be unconditional, and recipients may spend the money however they choose.

The Oakland Resilient Families program is the latest trial of a “guaranteed income” system of wealth distribution, where residents are given a set amount of money per month to supplement the existing social safety net.

“The poverty we all witness today is not a personal failure, it is a systems failure,” Schaaf said in a statement. “Guaranteed income is one of the most promising tools for systems change, racial equity and economic mobility we’ve seen in decades.”

Not to be outdone by Oakland, Marin County is spearheading its own GBI program for low-income residents.

Marin County supervisors have allocated $400,000 to participate in a universal basic income experiment with the Marin Community Foundation.

The foundation plans to spend $3 million to give $1,000 a month to 125 low-income women for 24 months. To qualify, the women must have a child under the age of 18.

“The ultimate endgame for this demonstration project is to have an example of how cash aid can be really helpful in terms of alleviating poverty, to test the usefulness of this approach to addressing poverty and addressing some of the racial inequities that we know exist in the county and beyond,” Johnathan Logan, a foundation vice president, told the Board of Supervisors before the unanimous vote on Tuesday.

To some degree, the project is modeled on the 24-month trial conducted in Stockton from February 2019 to February 2020. But unlike the Stockton program, the Marin initiative will be limited to non-White women.

Marin is one of the Top 10 wealthiest counties in the nation, so the allocation by its County Supervisors is a drop in the bucket in terms of their tax revenue.

The Stockton GBI program started in February 2019 with 125 participants. After 18 months (pandemic months were not incorporated into the study), The Guardian reported on the results:

The program did not use tax dollars, but was financed by private donations, including a not-for-profit led by the Facebook co-founder Chris Hughes.

A pair of independent researchers at the University of Tennessee and the University of Pennsylvania reviewed data from the first year of the study, which did not overlap with the pandemic. A second study looking at year two is scheduled to be released next year.

When the program started in February 2019, 28% of the people slated to get the free money had full-time jobs. One year later, 40% of those people had full-time jobs. A control group of people who did not get the money saw a five percentage point increase in full-time employment over that same time period, from 32% to 37%.

“These numbers were incredible. I hardly believed them myself,” said Stacia West, a researcher at the University of Tennessee who analyzed the data along with Amy Castro Baker at the University of Pennsylvania.

The researchers said that the extra $500 per month was enough for people with part-time jobs to take time off so they could interview for full-time jobs that offered better pay. They also said the money could have helped people who weren’t working at all find jobs by allowing them to pay for transportation to interviews.

After a year of getting the money, 62% of the people were paying off debt compared to 52% before the study. Researchers also said most people moved from being likely to have mild mental health disorders to “likely mental wellness”.

The money was delivered once a month on a debit card, which let researchers track how most of the people spent it. The biggest category each month was food, followed by sales and merchandise, which included purchases at places like Walmart and Target, which also sell groceries. The next highest categories were utilities, auto and services. Less than 1% of the money went to tobacco and alcohol.

This sample study bodes good news for Oakland, Marin, and the other cities and counties seeking to provide equity for its low-income residents. However, it is always important to know who is funding these initiatives. As the idiom goes, “He who pays the piper calls the tune.”

The Family Independence Initiative (FII) is mentioned in all of these GBI endeavors. It is a non-profit organization which, according to Influence Watch, nearly doubled its recipient contributions between 2016 and 2017. Much money is being funneled through this relatively new organization, yet they manage to stay under the radar.

And even though the funding for these GBIs is being funneled through this non-profit, the program is still government initiated and government-sanctioned. While FII presents its work as an alternative to government and other social programs, it is still essentially welfare under a shiny new cover. As one of my followers, Coleman Moreing aptly said.

Economist and Investment Banker James Rickards was writing about it two years ago and basically said the same thing:

I’ve been writing lately about something called “GBI,” which stands for guaranteed basic income. GBI is the new buzz phrase that’s the talk of academia, Silicon Valley and the elites on both coasts.

GBI goes by other names including universal basic income, UBI, or just basic income, but the policy is the same regardless of the name. The idea is that governments will guarantee every citizen a certain basic income as a matter of right. Everyone making below a certain amount of money gets a check.

It’s really just welfare by another name, but it would apply to a much broader group than just the poor and you would not have to pass any income tests or work requirements to qualify.

There is no means testing and no work requirement. The government just hands every man and woman a check every month whether rich or poor, young or old, employed or unemployed.

Governments have never done a great job of managing their own welfare systems, let alone ones that include partnership with the private sector. When we allow government full access to a private-sector slush fund, what do you think will become of it?

In the State of California, the welfare systems are a convoluted and bloated mess, funneling money to illegal aliens, the homeless, and drug addicts, while taxpaying citizens who have fallen on hard times are left out in the cold. We see this in the unemployment system with its 31 billion in fraud, and the COVID relief funds where the money is going to everything BUT the people it is supposed to relieve.

What happens when GBI moves beyond a small test group (or city/county), to an entire population sector, say, Los Angeles County with its 4.5 million residents? How will the government handle the demand for that growth?

Government continues to choose winners and losers, opening up the door to even greater fraud. In terms of the Oakland model, the program is being limited to low-income people of color, thereby discriminating against low-income whites (or Asians, for that matter). When it involves government, how is this discrimination not illegal? What means will people go to in order to game the system?

We all know that once any government plan is embedded, it takes a literal bomb to dislodge it. Look at the Affordable Care Act. What happens when individual donor funds dry up? Will the private sector continue to foot the bill for this GBI or will the taxpayer eventually be on the hook to maintain this program?

As with most things the progressive left generates, the law of unintended consequences will cause us to rue the day we accepted the concept.