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Old 02-05-2018, 12:46 PM
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Mary Pat Campbell
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Originally Posted by campbell View Post
I guess it will have to be some other muni (San Bernadino?) to fight Calpers

So we had the Stockton bankruptcy settled in 2014.

This is what they're up to now:

A California city is launching the first US experiment in basic income — meet the 27-year-old mayor behind it

Mayor Michael Tubbs, from Stockton, California, announced last October the launch of a basic income experiment in his home city.

The 27-year-old mayor wants to show Stockton can become a cutting-edge city as it recovers from its 2012 bankruptcy.

Tubbs first learned about basic income in college, reading Dr. Martin Luther King Jr., and he hopes the Stockton experiment will lay the foundation for future US studies.

Stockton, California made national news last October when it announced it would host the first US experiment in basic income, a system of wealth distribution in which people receive a standard salary just for being alive.

The plan, spearheaded by Stockton's 27-year-old mayor, Michael Tubbs, will likely begin sometime in August 2018 and involve at least 100 people of varying income levels getting $500 a month for three years.

Ever since it declared bankruptcy in 2012, Stockton has been in recovery-mode, and Tubbs sees basic income — a growing topic of discussion around the world over the past couple years — as one way to rehabilitate the city.

In a basic income system, participants get a fixed amount of money that they can use however they want. Early research has shown that people in basic income experiments typically don't spend this money on vices or vacations; instead, they use it to pay for things like home repairs, school expenses, and the costs of starting new businesses.

Stockton becomes a symbol for the rest of America
Tubbs, a Stanford alum who first discovered basic income reading Dr. Martin Luther King Jr. in college, believes rising costs for housing and education, combined with stagnant wages, have warranted a new approach to social welfare. He was elected in November 2016, with economic development as one of his major goals.

Unlike many players in the basic income discussion, he doesn't believe the idea is radical as much as plainly progressive.

"I can see the radicalness, but I'm trying to solve the questions that every community has," Tubbs told Business Insider.

Stockton, California
Stockton, California. Justin Sullivan/Getty
Tubbs believes that Stockton is really a microcosm of the rest of the US. Low-income people haven't gotten a fair shake economically, and upward mobility has been difficult at best, he said. Mean incomes are well below California's average, and unemployment is double the national rate. Healthcare and retail are the city's two biggest industries.

"In our economic structure, the people who work the hardest oftentimes make the least," Tubbs said. "I know migrant farm workers who do back-breaking labor every day, or Uber drivers and Lyft drivers who drive 10 to 12 hours a day in traffic. You can't be lazy doing that kind of work."

The upcoming basic income experiment could give people more opportunity to find fulfillment, Tubbs said.

Stockton has partnered with the Economic Security Project (ESP), a basic income advocacy group headed up by Facebook cofounder Chris Hughes and others, to launch the trial, which is being called the Stockton Economic Empowerment Demonstration (SEED). ESP has given the city $1 million to fund the trial.

The mayor has high hopes for his city
The specific design of the experiment is still unclear. Tubb hopes it will be simultaneously broad and targeted, so it will reach people in need — but not exclusively. He said he still wants middle and upper-middle class residents to get the benefit.

No matter who gets selected, Tubbs said he trusts that participants' lives will improve.

stockton california
Stockton was the first city in the country to declare bankruptcy in 2012. Inman News / Flickr

Having grown up in poverty, moved through the system, and now achieved professional success, Tubbs said the perspective has given him a nuanced view of how people with low incomes think and behave.

He said he hopes a basic income experiment can help overturn negative assumptions about the ambitions and capabilities of people in poverty.

"For whatever reason, in this country we have a very interesting relationship with poverty, where we think people in poverty are bad people," he said. "In the next couple years, we'll see a larger national conversation."

Basic income is just part of the solution
Tubbs wants to approach his city's economic troubles from several directions — basic income is just one solution. Recently, his office received an anonymous $20 million donation, which Tubbs has directed toward a program called Stockton Scholars. The program awards a total of $4,000 in aid to four-year college students in the Stockton Unified School District and $1,000 to 2-year students.

The program will make higher education tuition-free for "the vast majority" of Stockton students who attend college in the California State University system, according to the mayor's office. Over the next five years, Tubbs is pushing the city to help raise a total of $100 million for Stockton Scholars.

"We want to triple the number of Stockton students who are ready, willing, and able to go to college," he said. "It's really about changing the narrative of this city. This, in tandem with basic income, really shows Stockton is on the cutting-edge of public policy with a real focus on human capital."
That's the positive spin article.

Here is some negative commentary:

Stockton’s 'Basic Income' Plan Diverts City From Its Real Duties
The city wants to spend a grant it got giving residents $500 a month for two years.
There's a simple solution to the nation's poverty and inequality problems, an acquaintance told me several years ago. He suggested that the federal government simply give $1 million to every citizen and, voila, we'd all be rich and happy. After some quick math (323 million x $1 million = more trillions than even the U.S. Treasury can print), he realized that he didn't add enough zeroes to his cost calculation. Turning the United States into Zimbabwe, where a $1 trillion note won't even buy a soda, isn't much of an idea.

But while the above thought experiment is zany, a number of politicians and economists are proposing a similar idea—but on a much more modest scale. In fact, one of California's most impoverished cities, Stockton, is working on a proposal that would provide a "Universal Basic Income" to a small number of residents. Instead of a million bucks, the city—thanks to a grant from some Bay Area tech entrepreneurs—wants to hand out $500 a month for two years without any limits on how it's spent.

It's not as controversial as Stockton Mayor Michael Tubbs' proposal last summer "that pays people not to commit crimes," as KCRA reported. But now Tubbs is back with this latest "let's just pay people" plan. The income idea is backed by a group that believes "cash is an effective way" to rebuild the American middle class. It's a pilot project that will help evaluate how this type of program works.

Tubbs makes some good points about the poor way in which his city traditionally has been trying to boost middle-class jobs and incomes. "We've overspent on things like arenas and marinas and things of that sort to try to lure in tourism and dollars that way," he told KQED News. But bad ideas shouldn't be replaced with worse ones.

I own a bungalow in Stockton and know the city well. Indeed, Stockton officials have been models for doing things the wrong way. Over the years, they've dumped redevelopment subsidies in fancy downtown projects, which remain surrounded by run-down neighborhoods and blocks of largely vacant buildings. The city also spent lavishly on compensation for city workers, which helped drive it into bankruptcy.

In general, the universal income concept is designed to replace current assistance programs. It's been touted by leftists, but even free-market economist Milton Friedman supported the concept as a means to reduce bureaucracy and end the "welfare trap." Current programs phase out as people get jobs, and the goal is to incentivize work. You can receive your payment and still work.

But analysts are downplaying crucial points. For starters, there's little chance direct payments would replace existing programs. It's like other ideas that might appeal to some people on a philosophical level. Some libertarians like a mileage-based road tax rather than the gasoline tax because it would charge people based on how much they use the freeway system. The political reality is we'd end up with a mileage tax and the gas tax.

Government does not often shutter its bureaucracies. The same holds true for these universal income proposals. Furthermore, it's foolhardy for individual cities to embrace these programs, especially since it eventually will involve oodles of public funds. Stockton's budget is crumbling under the weight of misguided past financial decisions. It can't even provide a decent level of public services as is—let alone after it starts handing out payments to people. And incentives matter. If the city subsidizes its residents, then Stockton will become a magnet for people who most want such subsidies.

Realistically, 500 bucks a month isn't much to live on anywhere in California. If this idea takes hold, it will be followed by demands to increase the payments. I can envision the "Living Wage Coalition" that would rise up to demand more money from City Hall, the legislature or Congress. It's dangerous to make larger swaths of people dependent on the political process to secure their living. This already is the case to some degree, but this idea will make it far worse.

But my biggest fear is what it will do to the already eroded concept of work. Many people prefer to do nothing if someone else will pay their bills. "A UBI would redefine the relationship between individuals, families, communities, and the state by giving government the role of provider," wrote Oren Cass in a National Review article last year. "It would make work optional and render self-reliance moot." It's one thing to provide a safety net and another to reward sloth.

Stockton should focus on the basics. If officials keep their budget in order, rein in compensation packages for city employees and provide first-rate services and a friendly business climate, it could lure the jobs that are the key to a middle-class lifestyle. Giving away "free" money—whether it's a million bucks or 500—is a terrible idea.

This column first appeared in the Orange County Register.


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