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City's radical 'guaranteed income' plan to end poverty

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A young mayor has come up with a radical plan to combat poverty in his cash-strapped city involving a “no strings” guaranteed basic income of $650 a month for its residents.

Michael Tubbs, the 27-year-old mayor of Stockton in California, plans to provide the monthly stipend to a select group of residents from 2019 as part of a privately funded 18-month experiment to assess how people use the money.

“And then, maybe, in two or three years, we can have a much more informed discussion about the social safety net, the income floor people deserve and the best way to do it because we’ll have more data and research,” Mr Tubbs told Reuters.

The city has not yet decided how many people will receive income from the trial project, which is funded by The Economic Security Project – a philanthropic network co-chaired by Facebook co-founder Chris Hughes.

Mayor Michael Tubbs is set to roll out a $600 monthly payment to all residents of Stockton as a “social safety net”. Source: Reuters
Mayor Michael Tubbs is set to roll out a $600 monthly payment to all residents of Stockton as a “social safety net”. Source: Reuters

The idea of governments providing a universal basic income to their citizens has been gaining traction globally.

The Finnish government is running a two-year trial to provide 2,000 unemployed people with monthly payments of about $860.

In Alaska, each resident has long received an annual dividend check from oil revenues from the Alaska Permanent Fund, which Mr Tubbs said is a model for his approach.

Last year, the payout in Alaska was $1,400.

The Economic Security Project is providing $1.3 million to fund the Stockton trial after approaching Mr Tubbs to ask if his city would be interested in piloting a basic income program.

“I jumped at the opportunity,” Mr Tubbs, who was familiar with the concept from the writings of civil rights leader Martin Luther King Jr, said.

The idea of a universal basic income has gathered traction worldwide in recent years due to rising unemployment. Source: Reuters
The idea of a universal basic income has gathered traction worldwide in recent years due to rising unemployment. Source: Reuters

Mr Hughes, 34, has proposed the US government give a guaranteed income of $600 a month to every working American earning less than $65,000 a year, at a total cost of $380 billion a year.

He says a 50 per cent tax rate on income and capital gains for Americans earning more than $320,000 would pay for it.

The criteria for participation in the experiment has not yet been decided, Mr Tubbs said.

But already, he has been receiving letters and emails from residents asking to be considered.

Mr Tubbs says he “felt almost a moral responsibility” to do something “a little bit out the box” for his city of 300,000 east of San Francisco.

“And I know, for me, I want to live in a community where people’s basic needs are met,” he said.

A universal basic income has long been discussed in Australia, with strong support for its introduction across the country.

University of Adelaide Economics Lecturer Dr Stephen Hail told Independent Australia a universal basic income was needed to tackle accelerating technology change and rising inequality.

“The obvious answer to all this is a universal basic income — an unconditional payment made to all adults, so that they can still function as consumption machines and at least survive – even though there are no jobs left for them to do,” Dr Hall said.

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