Last year we found out that the mayor of Stockton, California was launching a test program to see how a universal basic income program might work out. Michael Tubbs had arranged for a combination of public and private funding to allow a relatively small number of people to sign up for a monthly check with no strings attached. (In a curious turn of events they wound up having trouble attracting enough people to the test program because most people who received letters about it assumed it was a scam.) Tubbs did eventually get the program off the ground, however, and it’s been running for roughly a year.
So how did it work out? If you listen to the program’s supporters, not too badly. Most people claimed to be using the money for basic bills, food and necessities. Or at least that’s what they’re telling the people conducting the survey. (Fortune)
The first data from an experiment in a California city where needy people get $500 a month from the government shows they spend most of it on things like food, clothing and utility bills.
The 18-month, privately funded program started in February and involves 125 people in Stockton. It is one of the few experiments testing the concept of “universal basic income,” an old idea getting new attention from Democrats seeking the 2020 presidential nomination.
Stockton Mayor Michael Tubbs has committed to publicly releasing data throughout the experiment to win over skeptics and, he hopes, convince state lawmakers to implement the program statewide.
This doesn’t seem to be a question as to whether or not people enrolled in the program like it or not. Who’s not going to like having extra money every month that they’re not used to seeing? The real question mark hanging over this “data” they’re releasing is how accurate or valuable it is.
The money was distributed on debit cards in the amount of 500 dollars per month. The first red flag is the fact that nearly half (40%) of the money was withdrawn as cash at ATMs, so you have nothing to go on but anecdotal data as to where it went. Of the money that was spent directly using the card, nearly half went for food, with smaller percentages going to nearly everything from utility bills to “self-care and recreation.”
One of the concerns expressed by critics when this started was that people might be using the money for alcohol, illegal drugs or other self-defeating expenses, so supporters are pointing to this data as a sign of success. But let’s hold our horses for a minute here. If 40% went out of ATMs as cash and people were actually using it for booze and drugs, do you think they’d tell you that when you call?
Also, nearly everyone in the program had some other form of income they had previously relied on, in the form of either full or part-time jobs or public assistance. They still had that money coming in after the program started. So if they use the $500 to pay bills or rent, that just frees up $500 from their normal income and nobody is tracking what happens to that money.
In other words, this data is essentially useless. What you’ve managed to prove is that people like getting free money from the government. I could have told you that before the program even began and saved you a lot of effort.