The Big Question: Can a Guaranteed Income Help End Poverty?

(Bloomberg Opinion) -- This is one of a series of interviews by Bloomberg Opinion columnists on how to solve today’s most pressing policy challenges. It has been condensed and edited.

Romesh Ratnesar: As the mayor of Stockton, California, you became a prominent advocate of guaranteed income — the idea that the best way to expand economic opportunity is to give people money, no strings attached, and allow them to spend it as they see fit. Last week, a study of the guaranteed income program you launched, the Stockton Economic Empowerment Demonstration (SEED), found that among the 125 people who received the $500 monthly direct payments, the rate of full-time employment increased by 12 percentage points in one year. Receiving this stipend appeared to encourage work, rather than the opposite. Did that surprise you?

Michael D. Tubbs, founder, Mayors for a Guaranteed Income: Based on my own lived experience with poverty, I know that the issue is not that people don’t want to work, or that people are going to work less. So many people are trapped in dead-end jobs, which is compounded by poverty and economic scarcity. People can’t afford to take a day off to interview for a better job, or pay for an outfit for the interview, or to fix their car so they have reliable transportation to get to the interview. So these findings weren’t a surprise at all. And I hope they put to bed the notion that if we provide people with an economic floor, then they will forget to be industrious, forget to contribute or forget to be productive. In fact, the counter is true. We lose so much productivity and so much potential in this country because of economic scarcity. 

RR: We now have the results of the first year of the SEED program, which preceded the pandemic. How has this crisis changed the conversation about guaranteed income and the need to rethink the social safety net?

MT: It’s highlighted the fact that a guaranteed income is not just part of pandemic response, it’s also part of pandemic preparedness. We live in a time of pandemics; it’s a question not of if but when. Covid-19 has been the most drastic example, but we’ve also had the energy crisis in Texas, we’ve had wildfires, hurricanes, all of which cause massive economic disruption. The guaranteed income findings show that even before Covid, the $500 people received helped them build up a degree of economic resilience. When the pandemic happened, those that had guaranteed income were able to weather the shocks better than those who didn’t have it. And we see that reflected in the conversation right now in the halls of Congress, the need to provide cash relief to the American people. We’ve had bipartisan support for sending out one-time money to the American people three times already. It’s sad that it takes a pandemic to get that level of empathy — particularly because so many folks were living in an economic pandemic before Covid-19. 

RR: As you mentioned, there’s growing openness among leaders of both parties to provide more Americans some form of guaranteed income – whether through the stimulus checks or an expanded child tax credit, like the one proposed by Senator Mitt Romney, which would last beyond the duration of this crisis. What should Congress learn from the Stockton example?

MT: They should learn that you can trust the American people. You can trust that investing directly in the American people will yield dividends. You can trust that the American people are deserving of the dignity that comes with economic security. The best way to build back better is to give people the tools and resources to do so.

As for the specific proposals, I think the child tax credit is a step in the right direction, in terms of understanding the work of caregivers and the work of parenting — as someone with a 17-month-old, I can tell you, parenting is the hardest job I’ve ever had, and that includes being mayor. But I think that people who don’t have children also deserve some form of recurring monthly checks. One reason we need a guaranteed income is because there are a lot of Americans who are choosing not to have children because of their economic situation, because they can’t pay for it, because they’re trapped in dead-end jobs, or because there’s so much student-loan debt.

RR: One of the criticisms of guaranteed income schemes is that we don’t have enough evidence that they work, because the sample size has been too small. The SEED program in Stockton only involved 125 people. Can we really generalize based on such a limited data set?

MT: This isn’t about the data; it’s really a question of political will. If data alone drove decision-making, we wouldn’t have the governor of Texas telling people not to wear masks. We’d have smarter policies on the climate; we’d have smarter gun policies. All the data in the world is not enough to push political will on some issues. But the data is important. We designed a study with a sample size that is large enough to generalize — that was the point of the pilot. And to answer people who say this just happened in Stockton with 125 people, there are a bunch of pilots now happening all over the country. Compton is doing guaranteed income for 800 residents. St. Paul is doing guaranteed income for 125 residents. Yolo County, California, is doing a basic income demonstration. So is Gary, Indiana. So there will be enough data. There’s also international data going back decades that speak to the same fundamental truths about the efficacy of a guaranteed income.

RR: How should the government pay for these programs?

MT: We gave $2 trillion dollars in tax cuts four years ago. If you reverse those tax cuts, that’s enough to pay for a guaranteed income for every household making $100,000 or less for a year. So that’s one way. We can legalize cannabis and use that tax revenue. We can create a data tax or data dividend and allow everyone to own some of the wealth they generate through their online actions. We could defund the Space Force and other unseemly bloated military expenditures and use that to fund a guaranteed income. The issue is not whether we can afford to pay for it. The question is whether there’s a will to pay for it.

RR: You were elected mayor in 2016 at the age of 26, becoming the youngest big-city mayor in the country. You then launched this highly ambitious project to give people a guaranteed income, which hardly had a massive constituency behind it. Why did you decide to do that?

MT: For me, leadership is about the verb versus the noun, meaning leaders have to do something. And for me, having lived experiences with poverty and knowing so many people who are economically insecure, I felt a mandate to do something that was different. It would make no difference who was mayor if we weren't solving the tough challenges and even being provocative about how we did so. It was also driven by my faith. I’m a self-described church boy who grew up hearing that the righteous care about justice for the poor and that we’re judged, at least in my faith tradition, by how we treat the least of these. Being mayor was great, but I didn’t become mayor to be mayor. I became mayor to do things. I wanted to change lives, to change policies, change the conversation. I’m also a data person. I like to know what works, and I like to do it. And now we know, guaranteed income works. So let’s do it.

RR: You lost re-election last November. A lot of factors affected that outcome, but is there anything you would have done differently in terms of how you talked about the guaranteed income program and sold it to the citizens of Stockton? Could you have done more to convince people this was something they should support?

MT: I think the context in which we did this guaranteed income experiment bears mentioning. We were the first mayor-led guaranteed income demonstration in the history of this country. There was no template. It was new, and there wasn’t a pandemic to point to. Activation energy is always more difficult. Plus, disinformation is real. There’s a reason why we have an economy that works for the few and not the many. There’s a reason why, 300 years after Thomas Paine and 60-plus years after Dr. King, who both called for a guaranteed income, that we’re just now having that conversation very seriously in this country. It’s not because Michael Tubbs can’t message. It’s because we’re going against a status quo that has a lot of interest in keeping things as they are. And I was the first Black mayor of the city. It doesn’t mean that there weren’t other Black people in the 200 years of Stockton’s history that could have been mayor — it means there’s also some institutional bias and racism at work. 

RR: Since leaving office, you’ve been focused on trying to build a national network, Mayors for a Guaranteed Income. What role can cities and mayors play in moving the needle on this issue?

MT: Mayors are the moral authorities and the real leaders in our democracy. They’re at ground zero for every major challenge. They have an understanding of what their constituents need. And mayors aren’t ideological. We’re very pragmatic. We’re very much about what works and how come we’re not doing it already. I formed Mayors for a Guaranteed Income because I knew that it would take some time to get the federal government to act. But if we could get the mayors who represent the cities that these members of Congress and senators need to win their elections, then we would see more traction. And in seven months, we have 42 mayors who have signed on who are interested in the policy and want to test it. I can’t think of any other policy in this country right now where 42 cities have said, “We’re really going to try to do this.” And I think it’s incredibly exciting. 

RR: What can these mayors say to the business community to build support for guaranteed income programs? What’s in it for employers?

MT: If you’re an employer, you do better when everyone does better — when consumers have more ability to spend, when people are healthier, when communities are safer. Guaranteed income is a massive investment in R&D, in the future prosperity of your company, your customers and your employees. The data says that you’ll have folks who are better able to contribute and be productive at work, so productivity increases. And the pool of candidates to choose from increases. A guaranteed income allows people to have the agency to make decisions about how they spend their time, who they work for and to invest in training and upskilling if that’s what they need. And it also makes people healthier, less stressed, less anxious, better people and better employees, which is an overall win for all of us.

RR: What’s the bottom line? What is it going to take to make guaranteed income a reality for the Americans who can most benefit?

MT: Well, it’s going to take a majority of votes in the House of Representatives and a majority of votes from the Senate. It’s all political will. We know it works. The data in Stockton shows it works. The data from Mexico, Brazil, Kenya, Canada all shows that it works. The real question is, What else do our lawmakers need besides data to enact the policy? I think that’s where we’re at.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Romesh Ratnesar writes editorials on education, economic opportunity and work for Bloomberg Opinion. He was deputy editor of Bloomberg Businessweek and an editor and foreign correspondent for Time. He has served in the State Department, and is author of “Tear Down This Wall.”

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