Guaranteed (or Universal) Basic Income Is Coming!
Jessilyn Averill
On April 4th the Ann Arbor City Council voted to allocate $24M in American Rescue Plan Act (ARPA) funding for several projects recommended by community feedback and the City Administrator’s Office. One project soon to receive this funding will be a Basic Income pilot program. This is exciting!
For those unfamiliar with Universal Basic Income (UBI), here is a primer to give some background on this “new” old idea. The State of Alaska as well as the Eastern Band of the Cherokee Nation have modeled UBI programming for several decades; Alaska pays out residents through its oil dividends and the Cherokee Nation through its casino revenue. What was recently passed through City Council is not necessarily considered UBI, but rather guaranteed basic income because it will provide guaranteed funding to a targeted group of participants, not universally throughout the city. In Ann Arbor, basic income will be distributed to help 100 families hit hardest by the pandemic with monthly payments of $500 over three years.
Guaranteed Basic Income is a community investment which directly invests in the pockets of people experiencing low income over a stretch of time. It is not a loan. The money is not paid back. Basic Income is different than General Assistance which provides very limited financial support to poor, single adult citizens without children who do not qualify for other cash assistance. States like Rhode Island and Pennsylvania once provided this type of safety net, but both have since eliminated their programs. Today, only 25 states offer General Assistance and most have tight eligibility.
Around thirty-three basic income programs exist in the country. Some of these programs were created following the start of the pandemic. The concept of guaranteed income is popular with a whole network of U.S. mayors. Cities offering basic income programs include Columbia SC, Jackson MS, Richmond VA, Tacoma WA, and multiple cities across California including Sacramento and San Francisco. While New York City is proposing to implement a program soon, the State of California is proposing to replicate programming across the state. Nika Soon-Shiong, a co-director of the Compton Pledge, says, “Guaranteed income makes a case for investing in our undocumented neighbors and formerly incarcerated residents…In doing so, it addresses the reality of the nation's fragmented, punitive welfare structure.”
Before the pandemic, block grants like TANF (Temporary Assistance for Needy Families) allowed considerable flexibility for states to divert funds away from income support for families with children. After the pandemic hit, when broad federal stimuluses, more eligibility-flexible unemployment assistance, and monthly Advance Child Tax Credit payments were distributed, it was imperative that those receiving TANF and other federal assistance program not miss out. Aside from increasing overall household income, these programs, especially the CTC advancements, were seen to improve health outcomes for those receiving the additional monies. The allocation of ARPA funding for a basic income pilot in Ann Arbor is a real spark to what has been needed for too long by so many in our community. It, too, will undoubtedly have significant upshots. For example, UBI programs have shown positive effects on birth outcomes, education attainment, mental health, and housing security.
Due to the narrow scope of the basic income program, many currently supported by social service providers in Ann Arbor and throughout the county will still need reliable assistance, particularly through the Shelter Association of Washtenaw County’s Shelter Diversion Program. This should be persuasive enough for why the pilot will need to be continued, expanded, and sustained to meet the ever-present challenges faced by the many people continuing to scramble to survive where we live. Moreover, the pilot will find itself especially crucial at this time not just as local affordable housing becomes more inaccessible, but so may too critical womxn’s health care options – potentially demanding more out-of-pocket money that is not there. Piloting a basic income program seems like the most “basic” action Ann Arbor can do at this moment.
Further reading – Ever Heard of Baby Bonds?
Baby Bonds is an idea developed years ago by Dr. Derrick Hamilton, a Professor at the New School in New York, to address racial wealth inequities. This program proposes giving each baby born a trust fund established and guaranteed by the federal government.
Read more at bloomberg.com/news/features/2022-03-17/baby-bonds-eyed-as-way-to-close-u-s-racial-wealth-gap.