Michael Tubbs, Former Mayor of Stockton, California, joins Yahoo Finance’s Kristin Myers to discuss the effectiveness of the city’s universal basic Income program.
KRISTIN MYERS: Now, universal basic income was launched in the city of Stockton, California two years ago as a pilot program designed to test out how well the concept would help households that were struggling financially. And now we have the results of that program. So let's bring on former Stockton Mayor Michael Tubbs, who launched the program in the city. Tubbs is also the founder of Mayors for a Guaranteed Income.
Mayor, so we have the results here. And the data shows that recipients were able to better handle unexpected expenses. The figure jumped from 25% to 50%. They were better able to plan for the future. They had better health outcomes. And they were twice as likely, as everyone can see there from this graphic, to get full-time jobs. And so, essentially, it sounds like the program was a complete success.
I'm wondering how we can scale this up so that it's not just a city-by-city initiative but something that can be done around the country?
MICHAEL TUBBS: Well, first, thank you so much for that question. Because I think the evidence is convincing to me that point to the fact that now we need a guaranteed-income policy. And an easy way to do that in the interim would be sort of reoccurring stimulus checks. We already have 40 mayors through Mayors for a Guaranteed Income who have signed on to try a guaranteed income locally while we wait for the federal government.
But people's bills, people's expenses, people's well-being and mental health can't wait. And that's why I think the data shows, again, that everything that folks said would happen was false. They said folks would use the money on drugs and alcohol. 99% of the money wasn't. They said folks are going to stop working. Folks actually were able to work more and harder and get better jobs.
They said folks were going to stop being entrepreneurial and start taking a risks, and the opposite is true. So we have data that confirms [INAUDIBLE] done across the world, and now it's time for a policy at the federal level, almost as our 2020 New Deal, if you will.
KRISTIN MYERS: Now, the pilot was extended. It was not supposed to last the full two years but was extended to help families throughout the pandemic. And the data shows that it did do that. I'm wondering if you think that the pandemic and the way that Americans have really loudly demanded economic aid from the government might have really changed the tone of conversation around UBI and perhaps paved the way for it to become a countrywide policy?
MICHAEL TUBBS: A million percent. And I say that because we know that we live in a time of pandemics. That's not a question of if a pandemic happens, but when. In the last two years, we've been suffering with COVID-19. But we also had the wildfires throughout this country. We've had earthquakes. We've had power outages in Texas just last week. And we know that, based off this data and the further data to come, particularly around the impacts during COVID-19, that a guaranteed income represents smart pandemic response and gives people the chance to build economically resilient.
And we know through polling that the vast majority of Americans, Democrats, Republicans, and independents, I think about 6 out of 10, support reoccurring stimulus checks as a first step. And you mentioned sort of the political moment. And again, I would hearken back to 100 years ago when we had a Great Depression, when we had another global economic pandemic.
And FDR looked out and created the New Deal, which included something very radical at the time, unemployment insurance. It is now 2021. A 2021 pandemic cannot just be based off 1935 models. And that's why I think there's a precedent for this country thinking bigger, and bolder, and, I would argue, more humane about what we owe to each other, what kind of country we deserve to live in.
It's a long answer to say, absolutely, COVID-19 has made it very clear that folks were struggling before this pandemic, you can't deny the economic devastation, and also the weak foundations of our economy, particularly as it pertains to working people.
KRISTIN MYERS: I do want to get, however, to some of the criticisms of the policy. Right now, of course, because of the pandemic, we have seen the nation's poverty rate rise. So some eight million Americans right now are in poverty. So enacting UBI for all Americans in poverty would be expensive. How would the United States pay for a plan like that?
MICHAEL TUBBS: I have a litany of proposals to pay. One, Vice President Harris had a deal when she was Senator called the LIFT Act. That would reverse the Trump tax cuts of $2 trillion. And that would be enough not just to help Americans in poverty but to give money to every American family making less than 150,000.
If that's too radical for people, we can legalize marijuana and use the taxes from cannabis revenue to fund some sort of basic income. If that's too radical for people, we can do a data dividend or a data tax, given that we're creating so much wealth with the data that we owe. And then we give freely to social media companies. And that could form some sort of data dividend for all Americans to have.
If that's too radical, we could defund the Space Force and other crazy investments in war and warfare and really invest in the American people. Or we could do all of the above. I'm open to any and all of those options and more.
KRISTIN MYERS: What about addressing some of the root causes of poverty itself, though? You know, UBI helps folks once they are in the hole but doesn't do too much to address why they're in the hole in the first place. How do we also tackle that problem?
MICHAEL TUBBS: Yeah, I think it just depends on what people think is the cause of poverty. And the research from our pilot and a lot of more brilliant people have said that at the root of poverty is lack of cash. It's lack of capital, and that some of the dysfunction that we see associated with poverty are the effect and not the cause. So, yes, folks should learn how to manage money. But folks need money to manage first.
Yes, people should get their education. But if you live in poverty, you're more than likely to go to a terrible school. Yes, folks should work hard, and et cetera. But folks work incredibly hard at Amazon. They're working incredibly hard in the fields. Work incredibly hard as essential workers. So I definitely think there's a structural conversation we should have.
But I think cash and the income for the people is a great first step. And when we do that, we'll begin to solve a lot of these other issues we see. And I think one finding from the study that illustrates this is sort of the rate of stress and depression went down after one year for folks who were receiving the guaranteed income compared to those who didn't.
And that, the delta between where folks were and where they ended up, is comparable to some clinical trials of drugs like Prozac. Which doesn't mean that medicine isn't important. But it does mean that so much of the elements of the stress, of the anxiety, the depression that we see may actually be triggered or caused by economic insecurity. So I definitely think we should have a conversation about the root-cause issue of poverty. I would argue the root cause issue of poverty is lack of cash.
I would also argue the root causes of poverty extend to land theft, into 400 years of chattel slavery, to two wage and income inequality, et cetera.
KRISTIN MYERS: All right, former Stockton Mayor Michael Tubbs, thanks so much for joining us to break down all of that data and all of that information from that pilot program.