Democrats Election Campaign

The false promise of UBI proposals

The newest thing in government programs is the “universal basic income,” described by advocates as unconditional cash payments to fight poverty and help lower-income residents thrive. A problem that immediately becomes apparent is the one identified by British Prime Minister Margaret Thatcher. You eventually run out of other people’s money. To extend “eventually” as long […]

The newest thing in government programs is the “universal basic income,” described by advocates as unconditional cash payments to fight poverty and help lower-income residents thrive.

A problem that immediately becomes apparent is the one identified by British Prime Minister Margaret Thatcher. You eventually run out of other people’s money.

To extend “eventually” as long as possible, proponents have so far tried only limited pilot programs. Los Angeles Mayor Eric Garcetti has proposed a $24 million UBI program in his new budget. It will provide 2,000 families who live at or below the federal poverty line with $1,000 a month for one year, no strings attached. Garcetti said this will give families “the space to not only dream of a better life, but to actualize it.”

Actually, the population of Los Angeles is roughly 4 million, and in 2019, the U.S. Census Bureau found that 18% of Los Angeles residents had incomes below the poverty line. More than a year into the pandemic, it’s probably worse now.

So who gets the free cash?

This remains unclear. “The selection criteria for participant households is still being developed,” LAist reported, citing the mayor’s office, “but will likely include supporting a child under the age of 18 and a demonstrated medical or financial hardship connected to COVID-19.”

That doesn’t narrow it down very much.

Certainly, having more money is helpful, but that doesn’t make the program sustainable. Not at the scale needed to help nearly one-in-five Los Angeles residents who live at or below the federal poverty line.

In addition to the math problem, it’s not the city government’s job to decide who has more than they need and who needs more than they have, and then use the city budget to even things out.

Some universal basic income programs have relied on donated funds. Garcetti accepted donations to his nonprofit, The Mayor’s Fund, to pay for his “Angeleno Card” program, which handed out prepaid debit cards to more than 100,000 city residents. He “behested” a $5 million donation from the Consulate General of the State of Qatar to help pay for the program, but even that was only enough to meet about 25% of the demand when more than 400,000 people applied for the cards.

Private donations also funded Stockton Mayor Michael Tubbs’ much-publicized UBI program, which provided 125 people with $500 per month beginning in February 2019. Tubbs lost his bid for re-election in November and is now working with Garcetti on L.A.’s UBI plan. However, no matter how hard they work, the math never will.

The same problem is evident in a UBI bill now pending in Sacramento. Assembly Bill 65 would provide a universal basic income of $1,000 per month to any resident who is at least 18 years of age, who has lived in the state for the last 3 consecutive years and who has income that does not exceed 200% of the median per capita income for his or her current county of residence, per the Census Bureau. In L.A. County, 200% of the median per capita income for 2019 is $68,312, and qualifying residents who earn up to that amount would collect $12,000 a year in free money, paid for by “an appropriation from the Legislature.”

To be clear, that doesn’t mean legislators will pay for it. It means taxpayers will.


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