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Economy

Basic Income Guarantee: A Pilot in Hudson

This September, the small community on the east bank of the Hudson River is set to join several other American cities that are home to a UBI program.

Scott Santens
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Zohna Everett’s finances had her on the ropes. Throughout much of 2018, the 42-year-old resident of Stockton, California, was barely making ends meet as her professional and personal life problems started to collide. After being laid off from her job with the federal government earlier that year, she struggled to replace the lost income as a delivery driver for DoorDash, a situation made worse by car problems.

The hardship put a strain on Everett’s marriage, to the point where divorce was on the table. Even matters between her and her mother, the person she admires the most, started to sour once she decided to seek help from food banks. 

“My mom also works for the federal government and when you’re not in that situation, you don’t see the whole picture. She just felt that I didn’t need to do that,” Everett said in an interview with Greg Kauffman, a reporter with The Nation. Her saving grace wouldn’t arrive until February of 2019, when she found out she would be taking part in what then was the latest attempt at a centuries-old proposal. 

Everett is one of 125 residents who has been getting no-strings-attached $500 monthly payments through the Stockton Economic Empowerment Demonstration, or SEED, the city’s universal-basic-income pilot program. For those lucky enough to get it, the additional money made headaches like car maintenance and staying on top of bills easier to deal with. For Everett, it was a godsend. 

“I can help pay bills. And my biggest thing, before I could pay the bills, I have to pay my tithes.  Because the question was, ‘Will a man rob God?’” she said, holding back tears. 

Now a similar program is making its way to the Hudson Valley.

Direct Cash Relief to People In Need

More than three months after the coronavirus pandemic began, Americans are still reeling from the economic damage it has dealt. Total unemployment claims continue to pile up with little recourse, and some experts predict the recession that officially began in February will outlast the pandemic itself.

With state coffers strapped for cash, the federal government stepped in to help with the CARES Act in March, which overhauled unemployment benefits nationwide and doled out direct-relief checks to millions. While many are still waiting for their first relief check, politicians from both parties are calling for a second round of direct checks to citizens, and then some.

But for the city of Hudson, the economic downturn presents the perfect litmus test for its own guaranteed-income experiment. This September, the small community on the east bank of the Hudson River is set to join several other American cities that are home to a UBI pilot program. 

Twenty low-income residents in the city of 6,700 will be given direct payments of $500 a month for the next five years, via HudsonUP, a collaboration between the Spark of Hudson community center and former 2020 presidential candidate Andrew Yang’s nonprofit, Humanity Forward. Yang made universal basic income—essentially direct money transfers for all—a core tenet of his longshot presidential bid, touting it as a solution for widening income inequality and the supposed threat of automation. But the idea was far from obscure.

“Only the last few years is where it really seemed like a boom, because the Great Recession lasted for a really long time,” says Karl Widerquist, an economist and expert in UBI at Georgetown University’s Qatar campus. “Even when the economy was picking up, employment wasn’t and wages weren’t.”

Although versions of the concept have been tossed around for centuries, many credit 18th-century English writer and revolutionary Thomas Spence for formulating a basic income model in his 1797 text The Rights of Infants. Public interest in UBI tends to spike during times of great economic and social upheaval, such as the 1920s to ‘30s (Great Depression and the very beginning of World War II) and the late ‘60s to early ‘70s (Vietnam War and Civil Rights Movement), Widerquist adds. 

Now the third wave of support is brewing thanks to small-scale projects from private investors with ties to the tech industry who have the funds and optimism to try it out. The Spark of Hudson founders and couple Susan Danziger and Albert Wenger found themselves captivated by the concept of UBI after hearing their colleagues in the startup world wax poetic about the ways it could improve the lives of many who are struggling financially. When COVID-19 made its way to Columbia County earlier this year, Danziger and Wenger launched a community-wellness fund that dispensed $500 payments to 63 Hudson families trying to get by. 

“There was one woman whose car had just broken down, so she couldn’t go to work,” Danziger explains. “This money paid to repair her car. Had we just given money for the food program, that wouldn’t have helped her.” Over the next half-decade, the couple will help the Greater Hudson Promise Neighborhood with logistics and tracking the long-term effects of the program.

“There’s going to be some discomfort or some pushback because people don’t get chosen or they disagree with the process, but we are trying to be as inclusive as possible with the development of the selection criteria,” says Joan Hunt, project director of the Greater Hudson Promise Neighborhood. Hunt and her crew are especially interested in the ways UBI can help level the playing field for historically disadvantaged groups, a sentiment that’s been echoed in the past by prominent activists like Martin Luther King, Jr. Past basic income experiments in larger cities like Stockton have not only lessened the strain on people’s wallets, but also their lives. 

“Their minds aren’t racing at night in the same ways,” Sukhi Samra, the director of SEED, says. “They’re less stressed, they’re less anxious. They’re able to show up as better people—better spouses, better parents.”

Although leftists and libertarians alike have argued for some form of UBI, it’s far from acting as a blanket replacement for all welfare programs. It sounds reasonable to assume that UBI might be better than, say, food stamps, if 40 percent of SEED recipients spent their money on food, but the same can’t be said about housing, healthcare, and other essentials. 

Varied living costs across the country and the lack of affordable choices in different markets require that UBI exist alongside a robust social-safety net that includes universal healthcare, publicly subsidized housing, and an equitable redistribution of wealth, Widerquist says. The end goal for UBI devotees is to make their privately funded projects public policy. If that ever happens, they say, it could give the masses a level of social mobility usually afforded to the well off, minus the stigma associated with traditional forms of assistance.

“The hope is that it gives freedom and liberty to everyone—not relying on marriage, not relying on being employed. This would really be a basic right for everyone,” Danziger says. But before that’s even remotely plausible, HudsonUP organizers will have to maintain the privacy of recipients during the process so that their spending habits won’t be influenced by public scrutiny. Excessive oversight from peers and the media could prevent researchers from truly seeing how people’s behaviors change when they receive a guaranteed income.

“It almost feels like a condition, you know? And there aren’t supposed to be any conditions,” Hunt says. In the meantime, HudsonUP organizers are coordinating with Columbia County Department of Social Services Commissioner Bob Gibson to make sure that the extra income won’t conflict with any assistance that potential candidates might already be on. 

Hudson Mayor Kamal Johnson hopes that the small injection of cash into his residents’ lives will be a much-needed reprieve for a community hit by rising rent prices and other economic issues. His excitement for the program grew when the team at SEED shared the positive findings from the initial SEED recipient data with him during the planning stages of the HudsonUP program. By early fall, the selected participants will most likely receive payments through a combination of in-person and online banking options to better align with continued calls for social distancing.

“I wanted to take chances, so when I got this opportunity to work with this project, I was extremely excited,” Johnson says. For his constituents, almost a quarter of whom were living at or below the poverty line pre-COVID, the timing of it all couldn’t be better.

A shorter version of this article was published as part of The Future Is Now: Building a Better New Normal package in the July 2020 issue of Chronogram.

Dalvin Aboagye is a freelance writer who has previously covered the Hudson Valley region for The River Reporter and Chronogram. Follow him on Twitter @dalvinandhobbes.