Calls increase for a guaranteed income in DC. There are multiple ways to accomplish it
It was 2018 when the Rev. Wendy Hamilton, a 2022 candidate for D.C. delegate to the U.S. House of Representatives, first learned about universal basic income (UBI). Hamilton, who has lived in D.C. since the late ‘80s but grew up in a small industrial town in Ohio, was reading a New York Times article that featured Andrew Yang, a presidential candidate for the 2020 Democratic primary who campaigned on UBI.
There was just something about this idea that made sense, she said in a recent interview. Hamilton thought about how her family, friends, and neighbors in her hometown had once worked in factory jobs that have since been automated and taken away, and how the sudden loss decimated the town, Portsmouth.
If there had been a universal basic income, Hamilton surmised, the town might be a very different place today. She said that her family and friends experienced a lot of stress due to uncertainty around their financial futures. Although Hamilton opted to stay in D.C. after graduating from Howard University, she still thinks about the impact UBI could have had on family members who stayed.
“If my grandparents had known they had at least $1,000 a month coming in once they learned that they had lost their jobs, perhaps they would have had a different outcome — perhaps they would have had a little bit more hope,” Hamilton said.
She said her grandparents became depressed at the time because they did not have the financial means to leave the town, and stressed over how they would make ends meet.
Soon after reading the New York Times article, Hamilton reached out to Yang and began working on his campaign as a spiritual adviser. The idea has stuck with her ever since. UBI is now at the center of her own campaign platform, which is focused on addressing income inequality in D.C.
Hamilton is not the only one who was overtaken by the idea of UBI. Since Yang’s primary campaign, dozens of cities across the country have been experimenting with different forms of income programs. There’s even a D.C. UBI Coalition, a partnership of more than a dozen area nonprofits, community foundations, and charitable organizations through public and private projects. The D.C. Council has deliberated guaranteed income programs since at least 2018, when the Office of the Budget Director for the D.C. Council published a feasibility study.
The study estimated that implementing a large-scale guaranteed income program targeted at the city’s lowest-income earners could cost about $40 million in its first year, and $82 million over the course of four years. Depending on the size of the payments and the number of recipients, the projected costs for four scenarios ranged from $380 million to $9.3 billion, according to the study.
David Grosso, then an at-large councilmember, spearheaded the debate over the minimum income level needed to live in the city, and pressed the District to explore implementing basic income programs. Ultimately, the high projected cost of the idea turned Grosso and other legislators away from pursuing it.
“The government cannot afford to provide the subsidies that the study suggests are needed for everybody [to] live in the District at the desired minimum income,” D.C. Council Chairman Phil Mendelson said when the study came out.
Grosso, who had initially introduced the idea to the city, agreed.
“In the end, I think we were all a little bit sticker-shocked by how much it would cost,” he said later.
But proponents hope now is the time to rally support locally. In late September, Hamilton marched alongside approximately 50 residents and activists — including organizers of the D.C. UBI Coalition — to press Mayor Muriel Bowser to join a group of mayors across the country who have committed to supporting guaranteed income programs. Mayors in surrounding jurisdictions such as Alexandria, College Park and Takoma Park have publicly declared their support for such initiatives. The idea has also won the backing of mayors in St. Paul, Minneapolis, Denver, and Los Angeles, among many others.
As UBI programs are established across the country and region to address poverty, it is more important than ever to have an accurate understanding of the different models and how they work.
UBI is broadly meant to refer to programs that provide a fixed amount of money on a regular basis to everyone regardless of their income level. Though the concept has gained popularity in recent years — and garnered attention as a key element of Yang’s presidential campaign — the idea is not new. It has been a feature in public debate since at least the 18th century. President Richard Nixon considered introducing this practice in the United States in the 1970s, although critics dissuaded him from pursuing the idea by arguing that people would engage in more reckless social behavior if they knew they could rely on a social safety net. Concerns over automation replacing people’s jobs and the onset of the pandemic, however, have propelled this concept back into the mainstream.
Melody Webb, executive director and founder of the local nonprofit Mother’s Outreach Network, leads the D.C. UBI Coalition. Participating groups such as Bread for the City, the Greater Washington Community Foundation, and Ward 6 Mutual Aid call for the implementation of basic income programs. Webb said that while there seems to be growing support for UBI across the city and country, there are also misconceptions.
Conceptually, UBI is the idea that everyone should have access to a minimum income that supports their basic needs as human beings, according to Webb. This is generally more politically attractive than some alternative approaches since it targets everyone, she said, but it can be difficult to implement.
“When a benefit is available to everybody across the board [such as] public school, there’s less of a stigma, and there’s more political support for it. ” Webb said.
However, given budgetary limitations, governments may find it difficult to implement a universal basic income program that benefits everyone. If so, she said, the government may want to target its support to those who need it the most. And this is the concept behind “guaranteed income” (or “minimum income,” to use the term in the D.C. Council study), a variation that provides no-strings-attached cash to people thought to most need it based on their socio-economic status. Even those costs, however, can discourage lawmakers, as seen after the council’sD.C. Council study.
Despite the distinctions in meaning, politicians and advocates often use the term “UBI” to apply to a broad variety of programs — not just to UBI under the traditional definition. So in practice the term sometimes refers to other programs meant to address income inequalities, such as guaranteed income programs and earned-income tax credits (EITC).
In its latest budget, the D.C. Council incorporated both of those approaches, allocating $1.5 million for a new guaranteed income pilot program and establishing a new basic income program based on an EITC. So what’s the difference between the two?
An EITC is a tax-refund program that is directed at low- and moderate-income earners. Basically, it allows for people who don’t make a lot of money to pay less than they would otherwise in taxes, and to receive a larger refund. The new D.C. EITC initiative will disburse the refund in monthly payments rather than once at the end of the year, and also increase the proportion of the federal tax credit D.C. matches from 40% in 2021 to 100% by 2026.
But Webb points out that while an EITC can help low- and moderate-income families overcome some financial hardships, there are limitations to the idea. Namely, it applies only to people who are working.
While Webb said she supports the expanded EITC, she believes the best way to tackle poverty and dismantle racial barriers that have disproportionately impacted Black families in the District is to remove any bureaucratic limitations that limit participation.
Opposition to guaranteed income programs can sometimes be framed around stereotypes some have about those who access public benefits. “When we talk to people about guaranteed income, there’s this recurring theme of: ‘People ought to earn support’ and ‘People are lazy’ and ‘People don’t have the ethic to merit aid from the state,” Webb said.
She worries that EITC inadvertently reinforces stereotypes about people who are poor since it requires them to work in order to benefit. For her, there’s a mistaken but widespread belief that unemployed people are only interested in benefiting off the labor of others. But many Americans, Webb said, face barriers to consistent employment and often struggle to keep their jobs due to familial commitments that make it harder to earn a reliable income. Under UBI and guaranteed income programs, she said, the idea is simple: Everyone deserves to have the means to meet their basic needs.
Michelle Rochon, a Street Sense Media artist and vendor, said she is not so sure how she feels about universal basic income. While Rochon said she would be happy to receive a monthly windfall, she is concerned the extra cash would negatively impact other public benefits she expects to eventually receive, such as Social Security.
“I don’t want to get to that part of my life and somebody says … ‘We were doing universal income and guaranteed income, so you’re not going to get as much as we projected when we sent you a statement [for Social Security],’” she said.
Webb said apprehension about the unintentional creation of what is known as a “benefits cliff” is something people involved in advocating for these programs frequently discuss. A benefits cliff occurs when someone’s income surpasses the eligibility criteria for continued access to whatever assistance they might be receiving.
While there are several ways to ensure that people don’t lose access to their existing benefits, Webb said, implementing them can be somewhat complicated, especially when it comes to federal benefits. For her, the most effective mechanism is having federal and local authorities issue “benefit waivers” to ensure continued access to other public benefits. Another method could be to not count such cash transfers as reportable income, potentially by treating them as a gift for tax purposes.
In any case, Webb said that it is important for governments — both at the local and federal level — to implement programs that care for people who may already have “fallen through the cracks.”
Among those who may not have steady access to current public benefits are people who are experiencing homelessness and people who are undocumented.
Webb said her nonprofit organization often works with mothers whom the government has separated from their children, generally due to not being able to provide them with safe, stable housing — an outcome that is often driven by the lack of financial resources.
When children are taken from their parents in such scenarios, Webb said, it creates several second- and third-order effects, since programs such as Medicaid and food stamps may be tied to having children at home.
Guaranteed-income programs like UBI can give families an added level of financial security that allows for them to remain together, advocates say.
But in practice, Webb said that local governments and basic income advocates have yet to work out all the finer details of how to implement guaranteed income programs. Most likely, the design of such programs would depend heavily on the needs in individual jurisdictions, and might focus on families that are “lower-middle income” or solely on families living below the poverty line. It would also depend on availability of funding.
Over the summer of 2020, a nonprofit partnership called Thrive East of the River — which consists of Bread for the City, Martha’s Table, Far Southeast Family Strengthening Collaborative, and the 11th Street Bridge Park — implemented its own guaranteed income pilot program, distributing $1,100 in monthly payments for up to 500 families for five months. Early in the pandemic, the partnership launched the program, raising funds from individual donors and various community foundations.
Hope Fultz, a researcher who worked with the nonprofit partnership, said she saw firsthand how the cash infusions changed the lives of various families.
Thanks to the cash provided by the guaranteed-income program, Fultz said, the nonprofit partnership helped a woman who had lost her job and car. With the extra money, the woman was able to get her car back and provide for her children again.
As part of her work, Fultz said, she regularly interacts with families making minimum wage and struggling to make ends meet.
“All these families got impacted by the pandemic pretty hard,” Fultz explained.
Kym Parker, a vendor and artist for Street Sense Media, spent two years in a shelter before moving into housing upon receiving a voucher two years ago. She said a monthly payment of $1,000 would have made a world of a difference and would have probably enabled her to live in an apartment somewhere rather than a shelter.
This article was co-published with The DC Line.
Will Schick covers DC government and public affairs through a partnership between Street Sense Media and The DC Line. Year one of this joint position was made possible by the Poynter-Koch Media and Journalism Fellowship, The Nash Foundation, and individual contributors