Could universal basic income work in San Jose?
Cities across California have tried guaranteed income programs to bolster economic security, supplement social safety nets and achieve greater racial and gender equity. Some politicians and researchers believe the idea might be the perfect antidote to problems like homelessness and financial insecurity, while others worry about how such a program would be funded.
And the policy, some say, could provide a shot in the arm for a local economy in shambles from COVID-19.
Universal, or unconditional, basic income, often referred to as UBI, provides residents a specific, recurring amount of money, with no strings attached. The nearest city to San Jose to establish a such program is Oakland, but none of Santa Clara County’s 15 cities have anything like it.
The policy was first tried in Stockton two years ago, where a pilot program gave residents $500 for 24 months. The city released the results of the pilot March 3, with noticeably positive outcomes: residents who received the money were twice as likely to obtain full-time employment than non-recipients.
In Stockton, the checks were provided with no strings attached and no work requirements. The program was fully funded by about $3 million in donations. Recipients were randomly selected from neighborhoods at or below the average household income in Stockton. Families spent most of the money on food, clothing, utilities and transportation-related costs.
As more pilot programs gain steam, UBI has cropped up as a potential solution for many of the Bay Area’s inequities.
San Jose Planning Commission Vice Chair Rolando Bonilla said UBI would be a game changer for communities hard hit by the COVID pandemic, like East San Jose.
“This is an opportunity to truly align East San Jose’s economy with the rest of the economy, and to give it the space to catch up,” Bonilla said. “East San Jose is already a major contributor in tax revenue … by strengthening East San Jose, you’re also strengthening San Jose’s ability to provide services (across the city).”
A 2020 study from the GenForward project at the University of Chicago found that 72% of young Democrats, 54% of young independents, and 47% of young Republicans supported UBI.
But Silicon Valley is not as progressive as many might believe, a recent San José Spotlight policy analysis found. The city, for example, has fallen behind its neighboring cities for minimum wage and hazard pay for essential workers..
And politicians, including San Jose Mayor Sam Liccardo, are concerned about funding UBI.
“Mayor Liccardo is waiting to support any UBI proposal until he can understand how it will be paid for, and is currently working on legislation that is focused on rapidly expanding job opportunities for displaced young adults in low-income communities because he believes in the importance of access to good jobs as a key pathway from poverty,” said Rachel Davis, the mayor’s spokesperson.
About 40 mayors across the country have signed on to “Mayors for a Guaranteed Income,” a nationwide coalition of mayors who support UBI in their cities. The list of California cities includes Oakland, Compton, West Hollywood, Long Beach and Los Angeles, in addition to Stockton.
But Bonilla says the people making arguments like Liccardo’s are missing the point.
“(UBI) would be no different than other financial subsidies that other industries get from the city,” Bonilla said. “The difference is that it goes directly to people that need it. And not just that: It goes to people who are needed (by the city).”
Legislation could be the key
Assemblymember Evan Low, whose district includes Willow Glen, the Rose Garden and Cupertino, introduced AB 65 last fall, which would create a universal basic income program for all Californians over the age of 18. The program intends to provide up to $1,000 per month to California residents and would be overseen by the Franchise Tax Board.
Low’s office suggests funding the program with a 1% income tax on those earning more than $2 million per year.
“We have seen the success of local Universal Basic Income pilot programs, and we have also seen the devastating impact the pandemic has had on millions of workers across the state,” Low said when he introduced the bill. “People do not need tax breaks — they need real money to help pay the rent, keep the lights on and put food on the table.”
Sandy Perry, president of the Affordable Housing Network of Santa Clara County said he isn’t opposed to UBI, but favors other proposals to prevent homelessness such as the social housing bill from Assemblyman Alex Lee, who represents parts of the cities of Milpitas and Santa Clara.
That measure creates a state entity would own, manage and maintain properties for affordable housing in perpetuity.
“Because of the high cost of living in the Bay Area, it seems to me (to be useful) to find ways of bringing the cost of housing down, and the costs of health care down,” Perry said.
UBI for foster youth
In June, Santa Clara County approved a small pilot program to give $1000 a month to about 75 South Bay foster youth transitioning out of the foster care system.
Dr. Sandhya Hermon, deputy director for Santa Clara County’s social services agency, said getting widespread support for larger universal basic income programs in Silicon Valley would be difficult because it contradicts American ideas about money and about who should get support and who is deserving.
“Handing out money goes against larger beliefs that America, as a society, (thinks) how money should be made,” she said.
If a basic income program were started in the South Bay, Hermon said, it could work in several different ways.
“It’s possible everyone could get it, or it could be based on a certain income threshold and anyone and everyone who falls below that income threshold gets a certain amount,” Hermon said.
Hermon admits that funding is a huge hurdle even for the small, foster youth program.
“Given the precariousness of the budget situation the county finds itself in, I don’t know about its future for the county,” Hermon said.
Sen. Dave Cortese, a former Santa Clara County supervisor, has proposed a statewide foster youth UBI program based on the county’s model. SB 739, the Universal Basic Income for Transition Age Foster Youth Act, would provide direct monthly cash assistance through a statewide UBI for approximately 3,000 youth who age out of the foster care system each year.
“We do hope that we will have good data by the end (of the county pilot),” Hermon said. “Maybe we can reach out to private philanthropy to see if Silicon Valley partners, because I know this is something that has generated a fair bit of buzz.”