Story at a glance
- Nearly 40 percent of Americans cannot afford $400 for an unexpected emergency expense, and rising income inequality is compounded by a growing racial wealth gap.
- The median white worker made 28 percent more than the typical black worker and 35 percent more than the median Latinx worker in the last quarter of 2019.
- A new coalition of 11 mayors across the country are committing to advocacy in favor of cash-based guaranteed income policies.
The ongoing COVID-19 crisis has impacted every American’s life in one way or another, leading to a historic loss of jobs while also exposing pre-existing issues in the U.S. economic system.
Last year, a Federal Reserve survey found that almost 40 percent of American adults wouldn’t be able to cover a $400 emergency with cash, savings or a credit-card charge that they could quickly pay off — a real problem when more than 20 million Americans are now unemployed.
Research has also shown a growing racial wealth gap, with the median white worker making 28 percent more on average than a Black worker, and 35 percent more than the median Latinx worker in the last quarter of 2019. The median wealth of white families is more than $100,000 while the median wealth of black families is approximately $10,000.
As a result of these inequalities, the COVID-19 pandemic has disproportionately affected people of color. In an effort to help combat these issues, 11 mayors from across the country have just announced Mayors for a Guaranteed Income — a coalition of mayors who will explore cash payment programs in their cities and advocate for guaranteed income programs. The founding mayors of the network include: Michael D. Tubbs from Stockton, Calif.; Chokwe Antar Lumumba from Jackon, Miss.; Melvin Carter from St. Paul, Minn.; Ras J. Baraka from Newark, N.J.; Aja Brown from Compton, Calif.; Eric Garcetti from Los Angeles; Adrian Perkins from Shreveport, La.; Libby Schaaf from Oakland, Calif.; Victoria R. Woodards from Tacoma, Wash.; Stephen Benjamin from Columbia, S.C. and Keisha Lance Bottoms from Atlanta.
What is guaranteed income?
A guaranteed income is a monthly cash payment given directly to individuals, empowering recipients to address their most urgent needs and providing a cushion for unpredictable expenses, external shocks and volatility. It is unconditional, and is meant to supplement, rather than replace, the existing social safety net.
“We are living in uncertain times with even greater widening economic disparity as a result of COVID-19,” said Stockton Mayor Tubbs, founder of Mayors for a Guaranteed Income. “As mayors, our problems may look different from town to town, but we are united in our duty to ensure the economic security of our residents and it is unacceptable that people who are working two and three jobs can’t afford basic necessities. We encourage all U.S. mayors to join us in strengthening our communities by supplementing the existing social safety net and driving forward this powerful tool for racial, gender, and economic equality.”
Tubbs founded the coalition following the success of his Stockton Economic Empowerment Demonstration (SEED), funded by several philanthropic organizations, including the Economic Security Project. The program provided $500 per month to approximately 100 low-income residents for 18 months.
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Research showed that the program was a success, and that recipients largely used their monthly SEED income on practical necessities — around 40 percent went towards food, and about 12 percent was spent on utilities.
Critics of universal basic income fear that funds given to citizens with no guidelines on spending will lead to laziness — a lack of motivation to continue working, or to find a job in the first place. But, according to researchers, about 43 percent of SEED recipients were either working full or part-time, or had a valid reason for their lack of employment. Eleven percent were taking care of parents or children, while 20 percent reported a disability, 8 percent had retired and 5 percent were students. This left only 2 percent of SEED recipients who weren’t actively looking for work.
The success of the program and inspiration drawn from the late Reverend Martin Luther King, Jr., who had an economic dream of guaranteed income for all Americans, led the Stockton mayor to found Mayors for a Guaranteed Income in partnership with the Economic Security Project. Now, a resolution in support of guaranteed income is currently in front of the United States Conference of Mayors, on which the Executive Committee will vote on June 30th.
“Too many Americans are one missed paycheck away from an eviction or being unable to put food on the table — and that was true long before COVID-19,” said Los Angeles Mayor Eric Garcetti. “When this public health crisis ends, we have to refuse a return to normal in favor of a future better than normal ever was, and Mayors for a Guaranteed Income does just that by focusing on meaningful and innovative solutions to economic insecurity, inequality, and poverty.”
Pilot programs are on the way
In places like Newark, N.J., the idea of a universal income system is far from new. Mayor Ras Baraka first broached the idea of a pilot program back in 2019 during a State of the City address, saying it would be a welcome experiment in Newark, where more than a third of residents live below the poverty line.
“People do not have enough income to take care of basic needs. These conditions were unacceptable before COVID-19 struck, and they are intolerable now,” said Baraka. “No person should have to deal with these stresses. That is why I remain committed to pushing for a guaranteed income, another step in our work to end poverty in Newark, and to create a more equitable and empowered city.”
Baraka wrote a recent opinion article in Newsweek to further pledge his support of guaranteed income and its projected ability to alleviate racial and economic inequality, citing the findings of the Guaranteed Income Task Force he put together last March, “to explore how a guaranteed income — regular, unrestricted infusions of cash — might prove an effective investment in improving our residents’ financial security.”
The results of those efforts culminated in the form of a recently published report, titled “Building Financial Security: Newark’s Roadmap Toward a Guaranteed Income.” The report, says Baraka, concludes that a guaranteed income program holds “serious promise in addressing the financial vulnerability faced by many Newarkers — in particular, its communities of color.”
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