Los Angeles starts pilot of basic income, program that spreads across the United States

Los Angeles became the largest city in the United States to join a pilot minimum basic income program that has been spreading across the country for the last year.

The city has opened applications to choose 3,200 low-income families who will receive US$1,000 (R$5,545) per month for one year, without compensation, starting in 2022.

Chicago, the third largest city in the country after New York and Los Angeles, also won a similar project, with no selection date yet. The city of 2.7 million people will provide $500 (R$2,772.50) a month to 5,000 families, using $31 million (R$172 million) from the federal pandemic stimulus package.

“When Los Angeles puts its brand on a transformational issue, we don’t follow, we lead,” Mayor Eric Garcetti said at one of the launch events, hoping it will be a role model for other big cities.

In the city of 3.8 million people, 18% live below the poverty line, against 12% of the national average, in pre-pandemic data collected. Los Angeles also has one of the largest homeless populations in the country, around 40,000 people.

The $38 million program includes $11 million (£61 million) that was cut from the police budget after the 2020 protests against police violence.

“It’s a small but constant investment in a simple concept: when you provide resources for struggling families, you give them room to breathe, to accomplish what many of us are lucky enough to take for granted: putting food on the table, taking care of it. of children with less stress, focus on education and seek opportunities with less concern for everyday needs,” said Garcetti.

There are no rules for how the money should be spent. Families will be randomly selected and must have at least one dependent child and prove that they have experienced financial or medical difficulties due to the pandemic.

Families in neighborhoods with higher poverty levels will receive more places in the program. Low-income families are those that earn up to US$21,960 (R$121,766) per year (with three members).

Experimental initiatives have multiplied in the country since the mayor of Stockton, a city of 300,000 people 130 km from San Francisco, led a two-year project with funds raised from the private sector, in 2019.

Today, there are dozens of cities with pilot programs in place, such as Compton, San Francisco and Oakland (California), Jackson (Mississipi), St. Paul (Minesota) and Denver (Colorado), as well as 50 mayors who have joined the Mayors for group. a Guaranteed Income, an association created by former Stockton Mayor Michael Tubbs.

“The world cares what Los Angeles does,” Tubbs wrote on social media. “Having the mayor of the second largest city in the country participating so boldly is significant.”

Stockton received financial assistance from the Economic Security Project (ESP), an organization created in 2016 with around 100 technology entrepreneurs, investors and activists. The group has already invested more than US$ 10 million (R$ 55.45 million) in programs of this kind.

For Madeline Neighly, director of ESP’s Guaranteed Income Program, the recent wave of cities embracing the idea was sparked by the success of Stockton and the distribution of federal government funds in the pandemic.

“The pandemic revealed what many already knew from personal experience: our economy is manipulated to benefit those at the top and harm low- and middle-income families,” Neighly told Folha.

“But, in a moment of crisis, the government intervened and transferred around US$ 850 billion (R$ 4.7 trillion) to all families, except the richest, showing the power and promise of money to stabilize individuals, families and communities.

“Unlike Stockton, which relied on donations from Silicon Valley, Los Angeles and Chicago will use public funds, giving hope to industry experts that there will one day be a federal program for guaranteed income across the country.

“Philanthropy has paved the way and continues to play an important role in understanding how to design, implement and research a guaranteed income. But now we are seeing the power of public dollars and public institutions to develop the necessary changes on a large scale,” he said. Neighly, who coordinates a community of experts to promote cash transfer projects (gicp.info).

Preliminary analysis of the Stockton project, which gave $500 a month to 125 families, showed significant changes in one year, such as greater success in the search for full-time work or better jobs, compared to people in a control group who did not receive the benefits. funds.

In February 2019, 28% had full-time work and, a year later, the number had risen to 40%. In the control group, the number went from 32% to 37%. Most of the money was used for food and essential expenses, with less than 1% on tobacco and alcohol.

For the authors of the study, two researchers in economic mobility from the universities of Tennessee and Pennsylvania, it was clear that the project did not discourage the search for jobs, on the contrary. They also found that the families were healthier and had fewer signs of depression and anxiety. For Chicago Mayor Lori Lightfoot, the program will bring hope in the city’s post-Covid recovery.