OAKLAND (KPIX 5) -- The City of Oakland announced a pilot program Tuesday to give a small group of low-income people a guaranteed monthly income to see if it will improve their economic plight. The experiment is actually small in scale, but it addresses a problem faced by millions trying to survive in this economy.
Oakland Resilient Families, the name of the program, will provide $500 a month for at least 18 months to the families who can spend the money on anything they want to.
The money will go to Black, Indigenous and other people of color, also known as BIPOC. These groups have the greatest wealth disparities in Oakland.
"We believe that guaranteed income is the most transformative policy that can achieve this vision and whose time has come," said Oakland Mayor Libby Schaaf.
The plan is to give 600 low-income families $500 a month for 18 months. A pair of "evaluators" will monitor how the funds are spent and how much impact they have on the recipients' lives. The idea was first tried three years ago in Stockton by former Mayor Michael Tubbs.
"People were saying that people were going to stop working. People were saying that people were going to spend all the money on drugs and alcohol," said Tubbs. "And the data that came out three weeks ago from the pilot shows that all those things are false. People were actually able to work more because they had a little bit of money, a little bit of breathing room."
Tubbs says the people who got the cash improved their work situation at twice the rate of those who didn't. And while it's easy to blame the pandemic, East Bay economist T.J Connelly says income inequity has been building for decades.
"There's been a tremendous amount of automation," he said. "Most businesses are able to do a lot more with fewer employees. So, the returns on capital have gone up dramatically, whereas the income that's earned by workers has fallen."
Tubbs says after each recession in the last 30 years, wage growth has reset lower for workers, widening the income gap and concentrating more wealth in fewer people.
But Sonoma State University Economics Professor Dr. Robert Eyler thinks we are still far from a national guaranteed income. He believes government's interest in the idea, and the taxes it would require, will wane as the economy recovers from the pandemic.
"It's so hard to imagine that that would happen in the United States, even in the next generation. It's so hard to imagine," said Eyler. "But, again, it's possible if the conditions become ripe for that to happen because there's really no other way out."
The 600 participants in Oakland's pilot program will be randomly drawn from a pool of applicants meeting certain income criteria. Half will begin in the spring, the other half in the summer.
Eligible families are those with income at or below 50 percent of the area median income, which is about $59,000 for a family of three.
Half of the spots will be reserved for very-low-income families, or those earning below 138 percent of the federal poverty level. That's about $30,000 per year for a family of three.
Applications will be available online and people can apply regardless of whether they are a citizen or if they have housing.
"Guaranteed income is an idea that has been around a long time," but its time has come, Schaaf said.
None of the money for Oakland Resilient Families will come from taxpayers. Rather it will come from Blue Meridian Partners, a philanthropic partner.
Jesus Gerena, CEO of the Oakland-based Family Independence Initiative, which is a partner with the city on the project, said $6.75 million has been raised for Oakland Resilient Families.
Eighty percent will go to families participating in the program.
More details about the program can be found online at oaklandresilientfamilies.org.
John Ramos contributed to this report.
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