The city of Stockton just approved a privately-funded plan to give 55 families free money every month for 36 months. The funds will be supplied by a basic income advocacy group, the Economic Security Project.
Expected to start in August of 2018 and, with $1 million to experiment with, the Stockton Economic Empowerment Demonstration (SEED) plans to choose 55 lower socioeconomic families to receive $500 a month for three years with no strings attached. The families are free to spend the money on whatever they see fit.
The goal of this experiment is to see if an injection of cash each month, sometimes referred to as a “universal basic income” (UBI), will remove some of the pressure these families face when they are living paycheck to paycheck. Another goal is to see how far this money goes to help families move up the socioeconomic ladder and contribute more to society.
Stockton’s Mayor Michael Tubbs has faith that this plan will produce beneficial results.
“This is not a handout, it’s a hand up,” Tubbs said to Capital Public Radio in an interview, “[This is] how you make sure folks who are working two or three jobs… are able to enjoy the American Dream we hold so dear.”
Many people feel that these “free money handouts” will just go to waste or even have a negative effect on the recipients. People fear that having a base income steadily coming in each month — even if it’s only $500 — will result in the recipients losing their work ethic and relying solely on SEED money.
“I don’t really believe that giving out hand-outs is going to improve anyone’s economic situation,” junior Dylan Eguiluz said. “I think it’s just encouraging the population to live off of handouts. Some people rely solely on welfare and they don’t attempt to seek any other means of income.”
Tubbs, however, said that he believes the families will do whatever is best for them.
“We’re going to trust that they can make wise decisions for themselves and their families,” he said to ABC 10 News after a speech on October 18 about the program.
The project is a small-scale version of the idea of a universal basic income in which everyone receives a set amount of money from the government and they are free to do what they want with it.
For decades, a UBI has been proposed as a solution to poverty and the people behind the project argue that the SEED is the first step toward ending poverty.
“At this point in our journey, we believe unconditional cash has the power to end systemic poverty and rebuild the middle class,” Natalie Foster, co-chairman of the Economic Security Project, said in her article she wrote for the online newspaper “Medium.”
Eguiluz isn’t so sure that this project will have such profound results.
“I don’t doubt that a little extra money will help them get by, but I don’t believe it will be as beneficial as they think,” he said.
This kind of experiment has been performed in other countries such as Canada and Finland with varying levels of success, but this will be the first in the United States.
“The Stockton Economic Empowerment Demonstration (SEED) is the first ever public-private initiative of its kind in the nation,” Foster said in her article. “It will provide direct, unconditional cash transfers to a select number of residents over several years.”