Michael Tubbs, the mayor of Stockton, Calif., thought he had an immediate solution to stave off a plunging economy. Last week, he reached out to Sen. Kamala D. Harris (D-Calif.) and took calls from Sen. Brian Schatz (D-Hawaii). He got in contact with former vice president Joe Biden’s presidential campaign, and told them to advocate for the very thing he felt was working small miracles in his city.
“Send people cash,” Tubbs said he told them.
Stockton has been in the midst of the country’s largest program assessing the benefits of universal basic income. Through a grant, 125 families are receiving checks of $500 each month. Now that lawmakers are strongly considering sending checks to Americans suffering during the pandemic of the novel coronavirus, advocates such as Tubbs are hoping for a watershed moment to bring their movement mainstream.
“The time has come,” Tubbs said. “This pandemic will have reverberating effects. We have to figure out how to make [cash payments] just regular, so we don’t have to panic, so we don’t have to do these emergency cash transfers.”
Senate Majority Leader Mitch McConnell (R-Ky.) has put together a bill that would provide $1,200 per adult to many American families, as well as $600 per child. Details are still being hammered out, but an effort to quickly put cash in Americans’ hands has bipartisan support in hopes of salvaging the economy amid emergency measures to stem the spread of the virus.
Tubbs and other universal basic income advocates, including former presidential candidate Andrew Yang, say the effects of the virus exposed a fundamentally delicate economy. They say the sudden shuttering of businesses and the soaring number of unemployment claims have made plain the fragile budgets of American workers, 40 percent of whom could not afford a $400 emergency expense, according to a 2019 study from the Federal Reserve.
In Washington, the idea of sending immediate cash to working Americans has drawn an unusual amount of bipartisan support — it’s not often leftists such as Rep. Alexandria Ocasio-Cortez (D-N.Y.) finds themselves on the same side of an argument as conservatives such as Sen. Tom Cotton (R-Ark.).
Still, conservative lawmakers are quick to draw a distinction between the stimulus payments — a rare emergency action — and what they see as an attempt by liberals to use the crisis to advance a preexisting policy agenda for ongoing cash payments.
In an email, Cotton noted that the idea of cutting emergency checks to Americans is not new. During the George W. Bush administration, after the 9/11 terrorist attacks and the financial crisis, direct cash payments were used to jump-start the economy while “avoiding both red-tape and the empowerment of Washington bureaucrats.”
“A large percentage of Arkansas’ workforce isn’t salaried, can’t telework, and doesn’t have large amounts of savings,” Cotton said. “For those workers, in order to be able to pay their bills and keep their families fed, they need direct assistance, and they need it now.”
Sen. Mitt Romney (R-Utah), who this week began to urge that the government send $1,000 to every American, also drew a distinction between an emergency measure and the movement for a guaranteed income.
Romney’s office said he used the $1,000 number as a starting point for discussions. Yet it was the $1,000 number that reignited hope in advocates for guaranteed income because it harked back to the idea promoted by Yang. The entrepreneur argued during his unsuccessful bid for the Democratic presidential nomination that giving Americans $1,000 each month was a necessary financial cushion in a changing economy.
During the campaign, Yang predicted technology would lead to massive job reductions. In an interview, he said this pandemic might accelerate those predictions. He said he hopes the crisis will compel conservatives to take his ideas more seriously, and recently reached out to Romney and the White House.
After the pandemic subsides, Yang said he figures there will be fundamental changes in the economy. For example, he noted he had a friend who laid off all 10 of his employees.
“When [the economy] comes back, is he going to employ all 10 people again? Maybe,” Yang said. “But who knows how his business will look? Is it possible that, during these two to three months, it will be possible for him to find different ways to get things done [without all 10 employees]? Sure. There’s going to be scenarios like that playing out across the economy.”
Tubbs said one the challenge will be bridging the need for cash now with the idea that residents need it regularly.
“I am not trying to fight with Mitt Romney, I support what he’s doing,” Tubbs said. “Give emergency cash. Once we do that, we’ll see that giving cash actually works and will help people in the next emergency.”
Although the concept of guaranteed income is becoming increasingly popular, there have been few examples to illustrate its effects on families. Programs such as the one in Stockton are relatively new and limited in scope, and opponents worry that a national program would add billions to the deficit while offering too little oversight. Skeptics also contend recipients might abuse the privilege of getting free money.
The Stockton families — all near or below the median income — have been receiving $500 checks since February 2019. The 18-month experiment is being supported by the Economic Security Project, a nonprofit started by Facebook co-founder Chris Hughes. Another program, in Jackson, Miss., is providing $1,000 to black mothers living in subsidized housing.
Although the program is still in the process of analyzing data, participants are reporting a newfound sense of stability and psychological well-being, the director of the program said. One participant said the extra money allowed him to cut back his part-time jobs so he had time to look for full-time work. Others have reported being able to buy dentures and pay down credit card debts.
Since the pandemic started, at least one participant has reported losing a job. Some, such as Virginia Medina, a 62-year-old retired administrative assistant, said the effects of having guaranteed income over the past year have provided some relief.
Medina’s proof is in her refrigerator, her garage and her cabinets, she said. She has a stockpile of tortillas and tilapia, fresh and frozen vegetables and canned beans.
“It looks like we will be able to have enough food for nine months!” she recalled her 22-year-old son telling her.
Then, she considered the potential long-term effects of this period. She received a pension from the state, but her son was working a temp job at a packaging plant. He was still allowed to work after his staff checked his temperature to ensure he had no fever — but who knew how long that would last. Her stepson also lost his job, and he had a family to feed. The demands, she figured, would grow even greater.
“We would last maybe four months,” Medina told her son. She added: “This extra money is helping keep us afloat.”
