Universal Basic Income Could Help Solve Louisville Housing Crisis
December 21, 2020As a supplement to our report on Housing Justice, the GLP has invited experts working with housing in Louisville to share their thoughts. This is one of those posts.
The economic recovery from the COVID-19 pandemic is “K-shaped,” benefiting the rich while plunging low- and middle-income residents further into debt. Even before the pandemic, families struggled to make ends meet with many adults working more than one job to cover expenses and nearly 40% of families unable to cover an emergency $400 expense.
COVID-19 has exposed and exacerbated the disparities we knew existed in income, education, health and access to capital. It has proven to be particularly devastating for Black residents who, nationally, have recovered only about a third of jobs lost in the pandemic. Meanwhile, Louisville’s well-documented[1] eviction crisis threatens increasing numbers of families who have lost income due to closures related to COVID-19 and lapses in already limited federal benefits provided in the early months of the pandemic. With no new action from Congress to address family financial need and expiring moratoria on evictions, already-present barriers to wealth creation have been made even worse [2] for impacted families.
Many local programs have been created to stave off eviction, provide emergency food and medical supplies, and otherwise help families meet basic needs. However, it is not enough to help families truly recover financially. Our social safety net, consisting of an array of targeted financial benefits, is absolutely essential but is not designed to offer families the kind of long-lasting, reliable supports they need to create true financial stability, meet basic needs, and grow wealth. It is rooted in racist history and principles and paternalistic notions that the poor are to be blamed for their station in life and therefore undeserving of the opportunity to make their own financial decisions absent complex and, in many cases, intrusive oversight.
What would it look like to invest differently in solutions that are equitable, respectful and truly responsive to family needs? What if all families could count on a monthly supplement that could be used without restriction to fill in budget gaps as the need arises, whether it’s for groceries to prepare a meal for an extended family gathering, dress clothes to support a child who has just made the school debate team, medical or dental expenses, or simply to save for a rainy day? A handful of cities are asking these questions and answering them with a fairly simple solution: Universal Basic Income.
Universal Basic Income, or UBI, is a system that provides every adult with a set amount of money on a regular, recurring basis. The payment is guaranteed, unconditional and is intended to alleviate poverty. In some cases, UBI can substitute for other government programs such as housing or food assistance. UBI is typically justified using one or more arguments. The moral/social argument holds that society has a moral obligation to meet the basic needs of all its members and UBI allows for self-determination of needs. The fiscal/economic argument posits that providing a standard benefit to all is more fiscally responsible and predictable than the traditional system, captures people who are currently ineligible for but in need of additional support and allows individuals to use payments for purchases that stimulate the economy and contribute to lasting increased productivity. UBI also allows for a much-needed narrative shift that frames poverty as what it truly is – a failure of the economic system that disadvantages Black and Brown individuals and (especially Black and Brown) women – rather than as an individual deficiency.
To date, 16 mayors have committed to advocate for UBI and a new model of social support that recognizes and draws from the lived experiences of those experiencing economic insecurity. The new organization, Mayors for a Guaranteed Income, aims to demonstrate the impact of UBI on their communities. They plan to pilot the program while developing models that can be implemented across the nation and eventually become part of the national economic safety net.
In the wake of the COVID-19 pandemic, the City of Stockton, California extended a two-year UBI pilot called the Stockton Economic Empowerment Demonstration (SEED). SEED provides 125 families with $500 a month on preloaded debit cards with no strings attached. Stockton partnered with university researchers to collect and analyze data on program performance and purchases made using SEED funds. To date, food tops the list of purchases, but participants have used funds to cover medical and dental expenses, pay utility bills, purchase prom dresses and cover auto repairs. Participants anecdotally report better mental health outcomes and improved self-esteem.
Twitter CEO Jack Dorsey recently pledged $3M to support similar pilots through Mayors for a Guaranteed Income. Chicago, Pittsburg, St. Paul, MN, Jackson, MI and several other cities have begun developing the framework to test UBI, promising residents an opportunity to be part of a national conversation about what it means to give every adult, every family, the peace of mind of knowing that they can meet their basic needs, cover emergency expenses, and save for their future.
What could Louisville become if its residents could depend on a similar promise? What would Louisville’s social and economic trajectory look like if all residents were safe in the knowledge that they can not only pay for the bare necessities but afford the unexpected without jeopardizing their financial future? Given the increasing divide between the rich and the rest of us, the lack of government action to reform our social safety net and economic policy to address this gap and the known negative costs of poverty, can Louisville really afford not to join the growing number of cities testing the impacts of UBI?
Access the latest data on Louisville’s Housing here.
GUEST AUTHOR
Theresa Zawacki is on loan from Louisville Metro Government co-leading Russell: A Place of Promise, an economic justice-based initiative focused on the people and places that make Russell special. RPOP’s vision for investment without displacement includes sharing decision-making and leadership with residents through an innovative stakeholder agreement written in partnership with Russell residents, connecting individuals and families to resources leading to homeownership and traditional and nontraditional business ownership; building pathways and opportunities to strengthen existing Black-owned businesses; creating innovative connections to career-track jobs; and community ownership of neighborhood assets.
Theresa is spending her 2020 holed up with her partner, Greg, who may yet reach his goal of cycling 3,000 miles this year; four teens and tweens who seem to have unlimited interest in eating pizza rolls; and dog, Bunny, who, after a period of extreme anxiety over having everyone home all the time, has grown to relish the ability to demand and often receive walks, pets and opportunities to nap on sunny beds while the kids are “in class.” Theresa has (re)discovered a love for jigsaw puzzles and crosswords, has appreciated being able to sneak away for several socially-distanced camping trips, and has made tentative peace with her treadmill.