GRAPHIC: Stockton recently underwent a universal basic income pilot program similar to Yolo County. The majority of the payments were spent on meeting basic needs like food.
By Sean Gallagher,
On Feb. 9, the Yolo County Board of Supervisors gave the green light for a universal basic income pilot program for 31 families, five of which are in Davis. Recipients are a part of the CalWORKs Housing Support Program (HSP) with children under two. They will receive monthly payments for a year, up to a max of $12,155.
The program is the third major universal basic income pilot in California following the cities of Stockton and Compton respectively.
Universal basic income (UBI) caught major traction from former Democratic Presidential candidate and current New York mayoral candidate Andrew Yang. UBI distributes monthly payments to citizens, with no strings attached.
Supporters range from Elon Musk to Martin Luther King Jr. to conservative Nobel Prize winning economist Milton Friedman. The COVID-19 pandemic has only accelerated global support for UBI with even Pope Francis endorsing the idea.
The Yolo County program focuses on alleviating the burdens of poverty on children.
“Those kids are in the deepest poverty, the most at risk, the most needing of our help across the county,” said Nolan Sullivan of the Yolo County Health and Human Services Agency to the Board of Supervisors last Tuesday.
According to Marianne Page, a UC Davis Economics professor and director for the Center of Poverty Research at UCD, there is strong evidence that providing money to low income families reduces stress levels in positive ways that affect parenting.
“Positive parenting has an effect on how well children do, not just in terms of their test scores but also things like later life outcomes, health outcomes, something we call executive functioning [or ability to focus],” Page said.
Critics of UBI argue that people will be irresponsible with the money. However, in the recent Stockton UBI pilot where 125 impoverished residents received monthly payments of $500, 40 percent was spent on food, 24 percent on sales and merchandise, 11 percent on utility bills, and 9 percent on car repairs and gas.
“So they’re not saving it and investing it in the stock market, they’re putting that money directly into goods and services that are not luxury items and you would think that would lead to changes in consumer spending that we would see in the economy [through growth from the bottom up],” Page said.
Connor Malone, a Davis High senior and former supporter of the Andrew Yang presidential campaign, is thrilled with this new initiative by the Board of Supervisors.
“It feels good to see Yolo County at the forefront. It’s showing how UBI is becoming a more popular idea in this country,” Malone said.
The Yolo County UBI pilot is funded by $100,000 from the county’s cannabis tax revenue, $100,000 from First 5 Yolo, $75,000 from the state’s Office of Child Abuse Prevention and $125,000 from fundraising.
Page believes that a “true universal basic income,” in which everyone receives a monthly payment regardless of economic status, will never happen due to the funding necessary to cover the cost.
To pay for UBI, advocates for the policy like Andrew Yang proposed a value-added tax (VAT), similar to a sales tax, on luxury goods. While Page is not opposed to a VAT as a form of funding the UBI, she believes that it would be more efficient to tax extremely wealthy families making over a million dollars each year.
“The question from a policy perspective is if you give this to everyone where do you draw the line of how low income you need to be in order to qualify, because the higher the cutoff is the higher that tax will be and the less popular this will be as a policy,” Page said.
Infrastructurally, the payments could be distributed through the tax system similarly to how stimulus checks have been distributed over the course of the pandemic.
Though some Americans slipped through the cracks of the stimulus distribution because they did not earn enough money, Page is sure that with a UBI this could be avoided.
“[The government wasn’t] really prepared to deal with the stimulus checks; the thing with something like this is that there would be more time to figure out how to do this efficiently,” Page said.
With more UBI pilots like Yolo County’s latest effort coming out, there seems to be a growing movement towards implementing some form of UBI on a larger scale.
“I would have told you a year ago that we were very very far away. I think that you see across the country more and more interest in this right now. This is essentially a part of the Biden administration’s proposal; it’s certainly more likely than I ever thought it would be,” Page said.