The Southern California city of Compton is launching a pilot program that aims to provide a basic income to 800 of its low-income residents, with zero strings attached.
Dubbed the Compton Pledge, the guaranteed income program will begin distributing free cash to 800 residents of the city in Los Angeles County for a period of two years. Compton Mayor Aja Brown has said that the ambitious program is the largest of its kind in for any city in the U.S.
The majority Black and Latino city is just the latest in a growing list of cities across the country, and the world, that is experimenting with new ways to put money in residents’ hands give the grave economic calamity caused by the ongoing novel coronavirus pandemic.
“I recognized that there’s a need for additional income, especially with the pandemic resulting in record high numbers of unemployment throughout the entire country,” the mayor told the Los Angeles Times.
“This is a great opportunity to address inequalities for Black and brown people and also additional opportunities for upward mobility.”
The guaranteed income program is also meant to “challenge the racial and economic injustice plaguing both welfare programs and economic systems,” according to a statement released by the Compton Pledge on Monday.
“People in our community are going through tough times, and I know that guaranteed income could give people a moment to navigate their situation, and have some breathing room to go back to school, explore a new career path, spend time with their children, or improve their mental and emotional wellbeing,” Brown said in the statement.
“Ensuring all people are able to live with dignity is something we should all strive for in America.”
Roughly 1 in 5 residents of Compton live below the poverty line – roughly double that of the national average – according to census data. The plight of Compton residents has only been compounded by the ongoing health emergency, which has raised the city’s unemployment rate to 21.9 percent.
The Compton Pledge has already raised over $2.5 million in private donations through the Fund for Guaranteed Income, a charity headed by the family of L.A. Times owner and billionaire bioscientist and transplant surgeon Dr. Patrick Soon-Shiong.
Under the program, randomly selected families from a vetted group of low-income residents will receive at least a few hundred dollars on a recurring basis along with tools helping to advise them on their finances. Parents and guardians may receive more, while anonymous researchers will track the spending habits and well-being of participants.
A representative board including nonprofit organizations like My Brother’s Keeper and the Coalition for Humane Immigrant Rights (CHIRLA) will also advise the Compton Pledge on how best to reach communities on the margins.
The program is aiming to include a representative sample of 68 percent of Latino and 30 percent of Black residents in Compton, along with those typically left out of federal and state welfare programs, such as formerly incarcerated residents and undocumented immigrants.
The program isn’t the first of its kind in the Golden State, where opulent displays of wealth often exist side-by-side with extreme poverty.
In 2019, Stockton Mayor Michael Tubbs launched the first guaranteed income program in the country, known as the Stockton Economic Empowerment Demonstration, which gave 125 Stockton residents a $500 payment for 18 months.
The concept of distributing free money to citizens without strings attached has gained popularity in recent times, due in no small part to the economic impact of the pandemic.
Political parties and figures both on the traditional left and the right have raised the demand for guaranteed income or Universal Basic Income (UBI), with some of its strongest proponents include tech oligarchs and venture capitalists like Peter Thiel, Marc Andreesen, and Jack Dorsey.
Supporters of the plan argue that inequality would be reduced by basic income and it would provide an added layer of financial security for certain people. Supporters of the plan, such as former Democratic presidential candidate Andrew Yang, also suggest that with jobs in myriad industries slated to be rendered obsolete by automation and computerization, a universal basic income is required to prevent a deeper humanitarian and financial crisis.
Critics on the left have suggested that basic income is a Trojan horse that would be a vehicle for dismantling what little remains of the welfare state, offering the “paying people for being alive” stipend in exchange for austerity and the destruction of social safety nets that protect the most vulnerable members of society and offer a small barrier to extreme inequality.
On the right, however, opponents have claimed that the idea is far too expensive and would dis-incentivize people from seeking work and would be tantamount to subsidizing poor people’s substance abuse habits or reckless spending on “temptation goods.”
However, decades of research has shown that most people on such programs continue to work after receiving the transfers, while those who work less spend more time with their families.
With many countries experiencing a free fall in jobs numbers – as well as sharply declining consumer demand and household spending – the idea of guaranteed basic income has gained popularity unseen since the idea saw a surge of interest following the 2008 financial crash.
In the South American nation of Colombia, politicians across the political spectrum have urged the government to introduce an Emergency Basic Income to mitigate the damage of the COVID-19 pandemic. The municipal government of Bogota under Green Party Mayor Claudia Lopez was the first city in the South American nation to offer basic income to vulnerable households struggling to feed themselves amid the lockdown. The plan also included integrating 581,000 poor households into the banking system, according to a press release from the City of Bogota.
While the Compton Pledge is beginning as a far more modest program, community advocates are hopeful that the program can be a success.
“Guaranteed income is an urgent and necessary strategy for addressing the economic realities of racial injustice,” said Black Lives Matter co-founder Patrisse Cullors.
Proponents also hope that this can become a trend that sparks a nationwide system of direct, recurring payments to vulnerable families.
“Guaranteed income will afford people the dignity of an income floor and agency to make choices for themselves,” said Stockton Mayor Michael Tubbs.
“Poverty stems from a lack of cash, not a lack of character,” he added.