Living on basic-income for 2 years made me ‘feel free’ says a journalist who took part in one of the world’s largest trials

finland universal basic income
Finland undertook what has been described as the world’s “largest complete UBI study.”

  • Finland’s two-year basic income trial was controversial.
  • Most commentators focused on the fact that it did not increase employment levels.
  • But Tuomas Murajatold, who took part in the trial, told Insider that it was a liberating and empowering experience.
  • See more stories on Insider’s business page.

When Tuomas Muraja was selected for Finland’s basic income trial in 2018, he says he felt like he was “winning the lottery.”

The freelance journalist and writer was selected for the trial, which gave 2,000 unemployed people $600 each month for two years, because he sometimes seeks unemployment benefits when he is living between grants and other income sources.

The idea of a basic income – an unconditional, regular cash payment to adult citizens – has become an increasingly popular policy proposal in recent years, and Finland’s government-backed trial was one of the world’s largest to date.

However, when the results of Finland’s trial were published last year, some commentators said the test was a failure for basic income because it did not significantly increase their chances of being in work.

However, what some of this commentary missed is that recipients did, however, report significantly greater life satisfaction, and less mental strain than those outside the trial.

For Muraja, the basic income experiment was transformative, and he is now a vocal proponent of the concept.

“Basic income would liberate creativity, increase equality, and provide more free time for all,” he said.

He was able to put the basic income payment towards his €2000 ($2400) monthly rent, and it replaced a complicated old system of filling out multiple forms and attending courses to claim benefit payments every month.

‘When you feel free, you feel more secure.’

finland ubi

Mujara says that while the experiment did not make a huge financial difference to his life, living as he did in a country that already had a generous welfare system, it did have a significant impact on his wellbeing.

“The psychological effects were positive,” he told Insider.

“I much prefer receiving basic income rather than dealing with the old system and filling in its complicated forms or participating in mandatory courses.”

He said the universality also had a de-stigmatizing effect.

“If we had a basic income, it would put an end to the humiliation of the poor,” he said.

Under Finland’s welfare system, which is generous by international standards, claimants can earn up to €300 ($360) a month before they have to start paying back 50% of their earnings above that amount.

Now, Mujara was free to accept smaller jobs without fear of losing access to those benefits, and he also had more time to pursue creative projects.

“I could accept the small jobs and I didn’t have the fear of losing my benefits,” he said.

“It makes you feel free,” Mujara says of his experience on basic-income.

“You don’t have to work, for instance, every day. You could work only for four days a week, and the fifth you do whatever you want – so it makes you creative.

“And when you are creative and motivated, that makes you productive, even if you don’t calculate productivity always by money.

“When you feel free, you feel more secure. And then you create something. People in supermarkets, people cleaning – it helps them as well.”

‘Why can’t poor people be satisfied?’

Tuomas Muraja
Tuomas Muraja. Photo credit: Laura Oja

Much of the criticism towards Finland’s experiment focused on the fact that it did not increase employment levels among those trialed. The BBC’s report said it left people “happier but jobless.”

But Mujara says the results of the trial should be seen differently. “All those who received the basic income felt more satisfied. My question is: Why can’t poor people or unemployed people be satisfied?”

“It didn’t decrease [employment levels]. So it’s better than the normal system. Because we felt better.”

“You have to calculate it in a different way.”

The other frequent criticism of a basic income model is how expensive it would be to roll out to all adults. But Mujara believes its introduction is a question of political consensus, rather than affordability.

“Of course it will cost a lot,” he said. “But free education costs a lot and we’ve managed to deal with that. We have free highways in Finland, and we manage that. The thing is: Are we willing?”

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A California city gave some residents $500 per month. After a year, their unemployment rate had dropped, while the control group’s rose.

stockton basic income experiment
Lorrine Paradela, a recipient of basic income in Stockton, California, walks with Sukhi Samra, the pilot program’s executive director, on February 7, 2020.

It’s a decades-old debate: Does paying someone simply for being alive make it easier for them to find a job or discourage them from seeking work? 

One city got its answer on Wednesday: A new report evaluated a basic-income pilot in Stockton, California, that gave 125 residents $500 monthly stipends for two years. The results showed that unemployment among the recipients dropped during the program’s first year, from 12% in February 2019 to 8% in February 2020.

The experiment’s control group – residents who didn’t receive monthly stipends – saw unemployment rise from 14% to 15% during that year.

The results challenge one of the most common criticisms of universal basic income: that unconditional cash reduces the incentive for people to find jobs. 

“I remember telling people, ‘I think that $500 will allow people to work more if they choose to do so,'” Michael Tubbs, the city’s former mayor, told Insider. “And that playing out in the data – it makes me so proud.”

Tubbs launched the pilot program, officially known as the Stockton Economic Empowerment Demonstration (SEED), in February 2019. The experiment ended in January, so there’s still a year’s worth of data left to analyze, but so far, the trial seems to have been a success.

In addition to a decline in unemployment, SEED recipients also saw a rise in full-time employment, from 28% to 40% during the program’s first year. Full-time employment increased less dramatically in the control group, from 32% to 37%.

A test of basic income

Stockton basic income debit card
SEED participants received their monthly payments on a debit card.

Basic-income experiments are hard to compare, since they often evaluate different types of outcomes – such as participants’ happiness, wellbeing, life satisfaction, or unemployment. Groups enrolled in such programs also differ in size or socioeconomic status.

Still, for the most part, studies have shown that cash benefits don’t keep people from entering the workforce.

A 2018 report found that the Alaska Permanent Fund, which has been distributing cash to state residents since 1982, increased part-time work by 17%. But the cash transfers had no effect on overall employment numbers (the share of people who had jobs), according to the researchers. This might be because more people assuming part-time work for the first time, but the number of available jobs climbed.

Finland’s basic-income trial, conducted from January 2017 to December 2018, also found that employment rates between stipend recipients and those in the control group were about even. But the results were complicated by the fact that participants had to give up part of their standard conditional benefits – things like housing allowances and illness compensation – to receive their monthly stipends. 

For Stockton’s experiment, the qualifications were simple: Participants had to be adults living in a neighborhood where the median household income was the same as or lower than the city’s overall, about $46,000.

“We were the first city to do it,” Tubbs said. “We announced we were doing it before my good friend Andrew Yang even announced that he was running for president, much less talking about a universal basic income.”

Yang, a 2020 Democratic presidential candidate, made basic income a prominent part of his campaign platform, pledging to give $1,000 a month to every US citizen over 18.

‘Now we have data’

Michael Tubbs
Michael Tubbs discusses his basic income program in Stockton, California.

Tubbs said he wasn’t surprised to see unemployment decline among Stockton’s basic-income recipients. 

“The big change was how it helped me see myself,” Tomas Vargas, a SEED recipient, told The Atlantic. “It was dead positive: I am an entrepreneur, I think of business ideas, I make business choices, I want to be financially stable.” 

Tubbs has a theory for why full-time employment increased as well: Before the stipends, residents who held part-time gigs may not have been able to afford time off work to apply for full-time jobs. 

“It’s hard when you’re on the wheel to get off the wheel,” Tubbs said. “And that’s what people were saying: ‘We work part-time, we need money today, but if I had the opportunity to apply full-time, I would take it.'”

Stockton’s trial bolsters decades of research on guaranteed income, so Tubbs thinks it could help bolster a case for a national basic-income policy

“People said they wanted data,” he said. “Now we have data.”

Read the original article on Business Insider

A California city gave some residents $500 per month. After a year, the group wound up with more full-time jobs and less depression.

stockton basic income
Lorrine Paradela, a 45-year-old single mother, participated in a basic-income pilot in Stockton, California.

Michael Tubbs didn’t see much risk in giving money to his city’s poorest residents, no strings attached. The former mayor of Stockton, a city in California’s Central Valley, is a strong proponent of universal basic income, a policy that essentially pays people for being alive as a way to alleviate poverty.

“My belief in it came from being raised by three amazing women, including my single mom,” Tubbs told Insider. “The issue wasn’t that they couldn’t manage money. The issue was they never had enough money to manage.”

As mayor, Tubbs spearheaded the Stockton Economic Empowerment Demonstration, a pilot program that gave 125 residents debit cards loaded with $500 each month. The program launched in February 2019 and ended in January.

Its critics argued that cash stipends would reduce the incentive for people to find jobs. But the SEED program met its goal of improving the quality of life of 125 residents struggling to make ends meet. To qualify for the pilot, residents had to live in a neighborhood where the median household income was the same as or lower than the city’s overall, about $46,000.

A new report from a team of independent researchers found that Stockton’s program reduced unemployment among participants during its first year and helped many of them pay off debt. The report studied the effects of the payments from February 2019 through February 2020. SEED participants also reported improvements in their emotional well-being and decreases in anxiety or depression.

“It’s really made a huge impact on my quality of life and being able to go do just normal things that a lot of people take for granted,” one participant said in the report, “whether it’s go out to eat once every two weeks and sit down for a nice dinner, or whether it’s, you know, my mom’s birthday and I just want to get her a birthday present.”

Tubbs said it was likely that the $500 monthly payments helped in other ways during the pandemic, such as tiding people over until their stimulus checks arrived or allowing them to take days off work if they got COVID-19.

“We know anecdotally that the $500 allowed some members of the program to stay at home and not go to work because they don’t have paid time off,” Tubbs said. “They were able to listen to the doctor because they knew that the two weeks off work wouldn’t be catastrophic.”

Michael Tubbs
Mayor Michael Tubbs discussing basic income in Stockton.

Most of the money went toward food and merchandise

Participants in Stockton’s basic-income program spent most of their stipends on essential items. Nearly 37% of the recipients’ payments went toward food, while 22% went toward sales and merchandise, such as trips to Walmart or dollar stores. Another 11% was spent on utilities, and 10% was spent on auto costs. Less than 1% of the money went toward alcohol or tobacco.

By February 2020, more than half of the participants said they had enough cash to cover an unexpected expense, compared with 25% of participants at the start of the program. The portion of participants who were making payments on their debts rose to 62% from 52% during the program’s first year.

Unemployment among basic-income recipients dropped to 8% in February 2020 from 12% in February 2019. In the experiment’s control group – those who didn’t receive monthly stipends – unemployment rose to 15% from 14%.

Stockton basic income recipient
Susie Garza, a participant in Stockton’s basic-income trial, used some of the extra cash to finance her dog’s surgery.

Full-time employment among basic-income recipients rose to 40% from 28% during the program’s first year. In the control group, full-time employment increased as well, though less dramatically: to 37% from 32%.

“Everything I thought would happen, I said would happen – I argued with Sarah Palin and Chuck Woolery and talked to ‘CBS This Morning’ and Bill Maher about – actually happened,” Tubbs said. “I remember telling people, ‘I think that $500 will allow people to work more if they choose to do so.’ And that playing out in the data, it makes me so proud.”

The researchers also found that decreases in anxiety, depression, and extreme financial stress encouraged participants to set goals and helped them better cope with unexpected financial setbacks.

“I had panic attacks and anxiety,” one participant said in the report. “I was at the point where I had to take a pill for it, and I haven’t even touched them in a while.”

Basic income faces an uphill political battle

Tubbs lost his reelection bid in November, but his departure didn’t affect the SEED program, since it was always designed to be temporary.

stockton california
A pedestrian walks through downtown Stockton on February 7, 2020.

Tubbs’ vision is to make basic income a national policy. In June, he launched Mayors for a Guaranteed Income, a coalition of mayors interested in starting similar basic-income pilots across the US. At least 40 mayors, including Eric Garcetti of Los Angeles, Keisha Lance Bottoms of Atlanta, and Jenny Durkan of Seattle, have joined the group. Twitter CEO Jack Dorsey donated $18 million to the cause.

Inspired by Stockton’s trial, Saint Paul, Minnesota, started a basic-income pilot in the fall, giving $500 a month to 150 low-income families for up to 18 months. Richmond, Virginia, is distributing $500 per month to 18 working families. And Compton, California, is giving 800 residents a guaranteed income of $300 to $600 a month for two years.

No Republican mayor has joined Mayors for a Guaranteed Income – and interest in a basic-income policy skews heavily Democratic. Andrew Yang, a 2020 Democratic presidential candidate, made basic income a prominent part of his campaign platform, pledging to give $1,000 a month to every US citizen over 18.

Tubbs said there was more than enough research to suggest that a federal basic-income policy would improve Americans’ quality of life.

“I am so proud of all the pilots, but I’m ready for policy,” Tubbs said. “I’ve got all the evidence I need.”

Read the original article on Business Insider

Twitter billionaire Jack Dorsey just donated $15 million to fund basic-income pilot projects in at least 9 US cities

Jack Dorsey
Twitter CEO Jack Dorsey.

  • Twitter CEO Jack Dorsey just donated $15 million to Mayors for a Guaranteed Income, a coalition of US mayors interested in starting basic-income pilots. 
  • Several pilots are already underway, including a recent trial in Saint Paul, Minnesota.
  • Dorsey’s investment will help additional cities like Pittsburgh and Los Angeles launch their programs.
  • Visit Business Insider’s homepage for more stories.

Starting in April, millions of Americans received stimulus checks – a no-strings-attached payment meant to alleviate financial hardship. To proponents of a basic-income policy, the idea sounded familiar.

Basic-income programs essentially pay people simply for being alive as a way to alleviate poverty. Michael Tubbs, the mayor of Stockton, California, launched one of the US’s first guaranteed-income pilots – a program called SEED – last year. The experiment has been giving monthly payments of $500 to 125 of the city’s poorest residents since February 2019.

Tubbs also spearheads the group Mayors for a Guaranteed Income, a coalition of mayors interested in starting similar basic-income pilots across the US. In July, the coalition received $3 million from Twitter CEO Jack Dorsey’s #StartSmall initiative to fund global COVID-19 relief. On Tuesday, the group announced that Dorsey is giving another $15 million to support more basic-income pilots. 

Tubbs told Business Insider that he and Dorsey started discussing a plan to promote basic income earlier this year.

“We just had a conversation about where I saw it going,” Tubbs said. “I said, ‘Well, I have a bunch of mayors who I know will sign up for this if we can provide them TA [technical assistance] and support.”

The coalition now has 29 mayors now on board, including Los Angeles Mayor Eric Garcetti, Atlanta Mayor Keisha Lance Bottoms, and Seattle Mayor Jenny Durkan. Every city in the coalition is guaranteed up to $500,000 dollars, Tubbs said.

Several basic-income experiments have launched since the initiative began. Saint Paul, Minnesota, started a pilot this fall to give $500 per month to 150 low-income families for up to 18 months. Richmond, Virginia, is distributing $500 per month to 18 working families. And Compton, California, is giving 800 residents a guaranteed income of between $300 to $600 dollars per month for a two-year period.

Dorsey’s latest investment will help kickstart programs in six more cities: Columbia, South Carolina; Los Angeles, California; Madison, Wisconsin; Pittsburgh, Pennsylvania; Providence, Rhode Island; and Tacoma, Washington. It will also help advance existing pilots in Richmond, Saint Paul, and New Orleans. New Orleans recently began distributing $50 weekly stipends to 10 local students and plans to expand that pilot to adults.  

“He saw the success of just the announcement and how many people signed up and he said, ‘Well, how did we get pilots going?'” Tubbs said of Dorsey. “This is a huge, huge momentum shift. For some mayors, it’s literally the delta between what they needed to start.”

Michael Tubbs
Mayor Michael Tubbs discusses his basic-income program during an interview in Stockton, California.

Replicating Stockton’s success

In its upcoming basic-income pilot, Pittsburgh plans to distribute $500 per month to 200 residents for 24 months. In a Tuesday press call, Mayor Bill Peduto said the recipients will be 100 lower-income families and 100 lower-income families led by Black women. The pilot will investigate how the money reduces racial, gender, and economic disparities. 

Columbia’s program, meanwhile, is expected to distribute $500 per month to 100 Black fathers for 24 months. The payments will be loaded onto a debit card. Mayor Stephen Benjamin said the pilot could launch early next year.

For the most part, the new trials intend to mirror what Tubbs did in Stockton. Data from last year showed that Stockton’s basic-income recipients primarily used the money to buy groceries and pay their bills. Many said it improved their quality of life

“I don’t think I’d be here today if it wasn’t for the SEED program,” Laura Kidd-Plummer, a participant in Stockton’s basic-income pilot, said on the call. She was displaced by a fire in October 2019 and didn’t have a permanent residence until May.

But Tubbs lost his reelection bid in November, meaning the program likely won’t be extended past January. 

“As someone who has always been kind of out there and first and taking risks, those things cost political capital,” Tubbs said. “So much of the game of politics is self-preservation, so to have these mayors take this risk and say, ‘You know what, even if I get backlash, even if people don’t like it, even if I can’t help everyone, even if I could possibly lose reelection, this idea is worth fighting for, and my constituents are worth fighting for,’ it makes me incredibly inspired.”

Pushing for a national basic-income policy 

Tubbs’ long-term goal is to make basic income a national policy

“Our social safety net needs to upgrade from 1935,” he said. “The 21st century New Deal has to be an income floor. COVID-19 has just made that very clear when you look at the impacts on loss of wages, on folks who are unemployed.”

Critics of basic income, however, argue that cash stipends reduce the incentive for people to find jobs and may encourage frivolous purchases. Some consider the idea of monthly stipends too radical, though the origin of basic income dates back to the 16th century.

andrew yang nyc mayor poll
A sign supporting Democratic presidential candidate Andrew Yang’s plan for a monthly universal basic income seen during a rally in New York City’s Washington Square Park.

Tubbs said unemployment insurance and social security were also seen as radical during the New Deal era, but were necessitated by economic crisis. He thinks the same could happen as a result of the current pandemic, though it will depend on politicians’ willingness to reach across the aisle.

No Republican mayor has joined Mayors for a Guaranteed Income yet – and interest in the policy skews heavily Democratic. Former presidential candidate Andrew Yang, a democrat, made basic income a prominent part of his campaign platform, pledging to give $1,000 a month to every adult US citizen over 18.

Tubbs, however, thinks it’s possible to enact national policies that would give the vast majority of Americans an income floor – money that’s guaranteed, no matter how the economy performs.

“If we can’t act in this moment, then I have to question our ability to act, because literally the bottom is out,” Tubbs said. “This is ground zero.”

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