Universal Basic Income: Are There Positive Results?

For the past two years, the city of Stockton has conducted a study on universal basic income, a polarizing economic topic. Universal basic income, or UBI, is a government program that provides a set stipend or payment to individuals on a regular basis. While many people have vehemently opposed UBI throughout its rise to relevance, the results of Stockton’s experiment may open some previously closed eyes.  

The concept of UBI has continued to rise in popularity during the pandemic with millions of United States citizens losing their jobs. Whether temporarily or permanently, the loss of a job from an external, uncontrollable factor can leave a devastating, long-term economic impact on those affected: enter stimulus checks. Many argue that the stipends that stimulus checks have provided should be continued in the form of UBI. The city of Stockton’s successful UBI trial reinforces the calls to provide stipends outside of the pandemic. 

In Stockton’s experiment, known as SEED, randomly selected residents were given $500 a month for two years starting in February 2019. The findings from the program’s two-year anniversary recently returned and provided a positive outlook. According to the researchers involved within the study, the percentage of the recipients employed full-time grew from 28% to 40%: more than double the 5% growth of the control group. Furthermore, the vast majority of stipend money spent was on necessities such as food, clothes, and gas. This is perhaps the most important piece of data, because a common argument against UBI is that those receiving money will not use it wisely. 

While Stockton’s UBI experiment may have produced positive results, many questions still remain. Its effect on inflation is still up for debate and will continue to be tested on a significantly larger scale. Another potential issue is whether UBI will support or hinder systems of infrastructure. However, Stockton’s study proves one thing for sure: stipend programs in the form of relief will continue to remain relevant.