As stimulus checks appear to be a thing of the past, 98 U.S. towns are delivering universal basic income to low-income individuals (UBI).
The following cities are either implementing a pilot program or are in the planning stages:
What Is Universal Basic Income?
UBI is a government program that provides eligible residents with a monthly stipend. According to the Stanford Basic Income Lab, the following five features are shared by all UBI programs:
- Periodic payments. Instead of receiving a single payment, qualifying individuals get periodic installments. More frequently than not, monthly payments are paid.
2. Cash payments. Beneficiaries are sent a check rather than a benefits card or voucher. They are free to cash the check, deposit it into their bank account, and otherwise utilize the funds as they see fit.
3. Checks are universal. Currently, active pilot projects have limited the number of recipients. On a bigger scale, however, checks do not target a specific population.
4. Individual payments. Each adult citizen, as opposed to each household, receives a payment.
5. Unconditional payments. The receivers are seen to be in the best position to determine their own needs. There are no conditions attached to the check.
In brief, UBI is intended to help those in need escape poverty. The objective is twofold: to provide dignity to an often-overlooked part of society and to save tax cash.
Scientific American notes that 37.9 million Americans live in poverty, according to data from the US Census Bureau for 2021. That is 11.6% of the population living at or below the poverty line.
Providing these individuals with UBI would save billions of dollars by reducing the social costs of poverty, such as the unfavorable consequences associated with childhood poverty.
Will UBI Payments Replace Federal Stimulus Checks?
One argument made by opponents of any form of UBI is that free money will discourage work. In other words, individuals will abandon their jobs for a few extra dollars. Three pieces of evidence were given by Scientific American to dismiss this issue.
The Biden administration determined in 2021 that it would expand the Child Tax Credit. Not only was the maximum credit increased, but parents also had the option to receive a portion of the credit through check or direct deposit each month.
The enlarged Child Tax Credit moved 3.7 million children out of poverty for a period, despite the fact that the program was terminated by Republican lawmakers in 2021. In addition, parental labor force participation did not decline much.
The Permanent Fund Dividend of Alaska is around $1,600 per year. While it contributes to poverty reduction, it has had no negative effect on the work ethic of Alaskans.
According to a recent review of a pilot UBI program in the Canadian province of Manitoba, few individuals cease working while receiving a guaranteed income. Those who do quit have valid reasons for doing so. Some leave their jobs to care for their young children, while others leave to complete their high school degrees.
UBI systems do not provide beneficiaries with sufficient funds to invest in the stock market or retire. Instead, they are intended to ease the financial burdens of people who are struggling.