Oakland Mayor Libby Schaaf announced Tuesday a privately funded universal basic income program, to provide 600 Black, Indigenous, and People of Color (BIPOC) families with low-incomes an unconditional $500 per month for at least 18 months.
But there is a hitch – the program excludes poor white families. Mayor Schaaf says the program is only for “Black, Indigenous, and People of Color (BIPOC) (i.e. groups with the greatest wealth disparities per the Oakland Equity Index) with low incomes and at least 1 child under 18, regardless of documentation status. The term ‘family’ is defined broadly to recognize that families come in all shapes and sizes,” according to the Mayor’s office.
The Oakland Equity Index reports, “The median income for White households was 2.93 times the median income of African American households, while African Americans were most likely to be living at or below the federal poverty level (26.1%), compared to 21.9% of Latinos, 15.0% of Asians, and 8.4% of Whites.”
“The median income for White households was highest ($110,000) and the median income for African American households was lowest ($37,500). The median income for Asian households ($76,000) was similar to the citywide median income ($73,200), while Latino households fell below the citywide median with a median income of $65,000.”
But can Universal Basic Income of $500 per month help close that gap? It takes the lowest annual median income from $37,500 to $43,500. Perhaps encouraging new employers to the region with tax incentives, fee and permit waivers, and loosened regulations, would.
“In partnership with Family Independent Initiative and Mayors for a Guaranteed Income, Oakland Resilient Families will be among the nation’s largest efforts to determine the effectiveness of monthly unconditional payments to residents to help overcome economic instability,” the Mayor’s office reported. “Oakland Resilient Families is a collaboration between the Oakland-based community organization Family Independence Initiative and the national Mayors for a Guaranteed Income. The project will support 600 Oakland families while building momentum for strategies to eliminate racial disparities in economic stability, mobility, and assets through a guaranteed income.”
Former Stockton Mayor Michael D. Tubbs founded Mayors for a Guaranteed Income, was one of the early mayors to offer guaranteed income to low income residents. “Mayor Libby Schaaf joined Mayors for a Guaranteed Income as a founding mayor in 2020. Mayors for a Guaranteed Income (MGI) grew out of the groundbreaking Stockton Economic Empowerment Demonstration (SEED) led by former Mayor Michael Tubbs,” Schaaf’s office reported.
The jury is still out if the program “helps overcome economic instability.”
The seemingly noble goal behind universal basic income is to help to alleviate poverty. However, economists have long warned that UBI creates a disincentive to work.
The other issue with UBI is that it subsidizes non-productive activities, according to the Mises Institute. Rather than being encouraged to look for a job that pays enough to live on, too often people are lulled into using UBI to help fund flailing (or failing) careers as artists, actors or musicians – all very tough industries in which to make a living.
The Oakland Resilient Families website outlines its “Guiding Principles:”
Invest in Justice: Advance strategies to eliminate racial disparities in economic stability, mobility, and assets through a guaranteed income.
Invest in Families: Help participating families move from crisis to resilience to thriving in the wake of COVID-19.
Change the Narrative: Through storytelling and data, uplift the truth that poverty is a systems failure – not a personal failure.
Change the System: Build support for unconditional cash transfers and other strength-based policies that enhance the existing social safety net, rather than replace.
According to Mayor Schaaf’s office, “Oakland Resilient Families is 100% funded through philanthropic donations anchored by an investment from Blue Meridian Partners’ Place Matters portfolio, which aims to improve economic and social mobility in communities across the US through investments both in place-based partnerships and in supports to catalyze their success. These investments go towards transformative upstream initiatives like the guaranteed income pilot, cradle-to-career education supports through the Oakland Promise, and systems change work across the city, county, and school district through Oakland Thrives.”
There may be more effective ways to help lift Oakland’s low income community out of poverty, and focusing on reducing the historic horrific crime rate in the city is one place to start, rather than ways to defund the police.
Violent and property crimes in Oakland are the highest in the state and increased 38% in 2020, according to Oakland Police. While the Oakland City Council unanimously voted in July 2020 cut the police department budget by 50% over the next two years, crime was escalating. The East Bay Times reported that the Oakland City council “created the Reimagining Public Safety Task Force to overhaul public safety in Oakland with the goal of increasing community safety through alternatives to 911 calls, and reallocating police funds into programs having to do with housing, health services, jobs and homelessness.”
The Mises Institute outlined basic ways to help alleviate poverty and unemployment, noting, “the best steps to take are in the directions of reducing the cost of living and creating conditions favorable to plentiful employment.”
- It must be easy to start a business.
- It must be easy to operate the new business.
- It must be easy to make a profit so the business can survive the first few years and,
- It must be easy to hire employees.
And in Oakland, it must first be safe enough do all of this.