Stockton Extends its Universal Basic Income Pilot

For the 125 Stockton, Calif. residents lucky enough to receive a basic income of $500 a month, time was running out.

In the winter of 2018, researchers randomly selected residents of high-poverty neighborhoods to participate in the Stockton Economic Empowerment Demonstration (SEED). Designed to measure the effects of universal basic income (UBI), the project was funded by the Economic Security Project, a nonprofit that supports other guaranteed income experiments, and championed by Mayor Michael Tubbs, a Democrat.

Researchers published ongoing findings, which indicate UBI can help solve everyday emergencies. Recipients reported spending money on groceries, utility bills, credit card debt, dental work and a prom dress for their daughter. They were feeling less anxious and spending more time with their families.

The experiment — and the $500 payments — was scheduled wind down this summer after 18 months, just as a global pandemic thrust millions more into economic uncertainty. But in his State of the City address on May 28, Stockton Mayor Michael Tubbs announced that the project will instead be extended until January 2021.

The six-month extension comes thanks to a large donation from philanthropist Carol Tonan. “I hope the research and the stories of the impact of UBI over a full two years, both before and during this pandemic, will make it even more clear that UBI must be a national priority,” Tonan said in a statement.

Stockton, a city of 315,000 in California’s Central Valley, has struggled to recover from the last recession. As the U.S. unemployment rate is expected to climb to 20%, Tubbs says the city’s unemployment rate will match it in May. Pulling the modest floor out from under these already extremely low-income residents under the circumstances could have been disastrous, Tubbs told CityLab.

“Most people were in an economic crisis or an economic pandemic before Covid-19,” he said. The virus “further exacerbated unacceptable and undignified economic conditions for millions of Americans.”

Five hundred dollars isn’t enough to make up for a lost job, nor can it make going to work without adequate infection protections less frightening. It can, however, provide a sense of stability. “SEED has given me peace of mind,” said Virginia Medina, one of the recipients. “I don’t need much since the pandemic, but I have confidence that we’ll be OK. For now, I am focused on saving each month so I’m not at zero when this is over.”

Lorrine Paradela, a single mom who works with autistic kids, told CityLab in October that she was sleeping more soundly again after receiving SEED funding. She used the extra money to help buy a new car when her old one broke down.

In March, the pandemic introduced new stressors. Paradela fears catching coronavirus at her job and passing it on to her own children, who are 17 and 10 years old. In another city, her mother’s cancer advances. Her kids’ birthdays, in July and September, will probably go uncelebrated. Additional anxieties continue to emerge: Stockton, like so many other cities nationwide, has been experiencing several days of local protests over the killing of George Floyd. “It’s not really about the money — it’s about the world right now,” she said.

Still, supporting her family on one income is a balancing act. Every two weeks, Paradela makes about $1,200. Every month, her rent of $1,250 is due; in June, the bill is set to go up to $1,300.

Like so many others, Paradela’s budget has been upended by the pandemic, as she has to spend more on food for her kids and household necessities like toilet paper. Data show that since the pandemic started, food spending by SEED recipients increased nearly 25% over the monthly average. In March, it accounted for 46.5% of spending the researchers were able to track using prepaid debit cards, 36% over the same month the previous year. Meanwhile, spending on merchandise like clothes and non-food goods dropped 20%.

“We live in a time of pandemics,” said Tubbs. “If it’s not a virus, it’s an earthquake; if it’s not an earthquake, it’s a tornado; if it’s not a tornado, it’s a flood. We have disruptive events happening all the time. I want to prove that basic income is an important tool to build a foundation for people to withstand these things.”

Tubbs has recently been speaking with mayors, state legislators and national policymakers — including House Speaker Nancy Pelosi, Senator Chuck Schumer, and the campaign of Democratic presidential candidate Joe Biden — about how to design cash assistance programs. “My advice to them is: you just have to do it,” he said.

Some are taking steps to do so. Andrew Yang, who used his presidential campaign to advocate for a nationwide universal basic income, is funding a short-term experiment in New York administered through Neighborhood Trust Financial Partners, a nonprofit that provides financial coaching to low-income workers in the South Bronx, in partnership with SaverLife. A thousand local residents are receiving a $1,000 grant from Yang’s organization, Humanity Forward.

Justine Zinkin, the CEO of Neighborhood Trust, says the one-time payment will inevitably have less of an impact than a longer-term cash assistance program, especially since it’s being administered in a time where some people are making nothing at all. This isn’t a test of UBI, she stresses: It’s UBI with the confounding variable of a collapsed economy.

“This is the right thing to do, but let’s also be clear about what those totals add up to as a percentage of somebody’s typical survival expenses,” she said. “Hopefully, people won’t believe that if someone is getting [$1,000] that they can feel like that person is quote-unquote ‘taken care of,’ or that the crisis is being mitigated in any meaningful way.”

The money is still a massive help for those who receive it. Ramona Ferreyra, a social entrepreneur, was nearing a breaking point when she learned she would be receiving the fund. “I was taking care of my grandmother, taking care of myself, trying to figure out how I’m going to pay for the company,” she said.

Ferreyra, who has an autoimmune disorder and a physical disability that make it hard to hold down traditional employment, lives on public assistance of $190 a month, plus a $275 housing stipend. Her store, which sells baby bodysuits inspired by Hispanic heritage, makes an average of $175 a month, and much of that money goes toward supporting local advocacy work, like fights for fair public transit fares. Living in New York on such a budget is nearly impossible. Ferreyra makes it work by splitting time staying with her 89-year-old grandmother, who’s in public housing, and her sister-in-law.

“I think a lot of people didn’t realize just how fragile their existence was until Covid,” she said. “In communities like mine in the South Bronx, this is the norm for us.”

With the $1,000, Ferreyra put $300 towards paying off her credit card, bought three months’ worth of food for her pets and made a donation to a nonprofit doing Covid-19 aid work in the Dominican Republic.

She wants to invest the remaining funds in her business, and has already paid for Google ads that have tripled traffic to the site. “I just could never get enough money together” to make that investment before, she said. “There’s never breathing room when you’re limited like this.”

Critics of a national universal basic income program argue that free cash will discourage people from working, or that the dividend will be used as an excuse for the tech industry to automate jobs once held by a low-wage labor force. But amid mounting financial distress, even the federal government offered no-strings-attached financial assistance to eligible taxpayers — albeit on a short-term basis. Proponents hope the momentum doesn’t wane before the crisis does.

“What is really important is to continue to keep alive a concern for all these families,” Zinkin said. “[We] need to be very vigilant around the most vulnerable, and not assume that any help today is going to be adequate for this level of devastation.”

Powered by WPeMatico

What Early-Career Income Volatility Means for Your Middle-Aged Brain

You’re allowed to be a bit of a mess in your 20s, right? You thought it would be character-building to chase your dream of being a musician and pick up catering work to make ends meet. Or maybe you came of age during a recession and couldn’t find a steady job after getting laid off in your early 30s. Well, the bad news is that in addition to the hits your wallet took, by the time you reach middle age, the income volatility you experienced might have created negative consequences for your brain health.  

A new study published in Neurology, the journal of the American Academy of Neurology, finds a correlation between an unstable income in your 20s and 30s and brain integrity in midlife.

Researchers at the University of Bordeaux; University of California, San Francisco; University of Miami; University College London; and Columbia University, found that greater income volatility and income drops, defined by the authors as decreases in income of 25 percent or more, were associated with worse performance in processing speed and executive functioning in midlife, as well as worse micro-structural integrity of total brain and total white matter. White matter coordinates communication between different brain regions and affects learning and other brain functions.

This, of course has ramifications far beyond the middle-class college grads who spend their early years “finding themselves.” Racism, educational opportunity, and regional economic depressions contribute heavily to income volatility for young working people.

The study drew subjects from four cities: Birmingham, Alabama; Chicago, Illinois; Minneapolis, Minnesota; and Oakland, California. Over the period assessed—1990 to 2010—these cities generally had a high unemployment rate, averaging about 22 percent, compared to the national average of 3.6 percent, according to data from DataUSA.io. For 2019, the average minimum wage across the four cities is about $12 per hour, as per numbers pulled from the Economic Policy Institute’s minimum wage tracker.

Researchers collected income data from 3,287 black and white people of varied educational backgrounds (no other races or ethnicities were measured) who were age 18 to 30 when the study began. They are still tracking the participants who are all now in late midlife, making this one of few studies in the world that has measured nearly 30 years of repeated income information on a sample of the American population. A total of 1,780 (about 54 percent) participants did not have an income drop, while 1,108 (about 38 percent) had one drop of 25 percent or more from the previous reported income, and 399 (about 12 percent) had two or more income drops.

“By studying the sample over many years, we’re able to understand the life course,” said one of the authors on the study, Kristine Yaffe, professor of psychiatry, neurology, and epidemiology at UCSF. “We didn’t just want to look at people as a snapshot later in life.”

The brain health and functioning of the participants in the study were not measured when the study began in 1990, so it cannot be ruled out that low cognitive functioning might be a cause of income fluctuations for the subjects. But the study notes: “All findings were similar when restricted to those with high education, suggesting reverse causation may not explain these findings.”

It is well-documented that low socio-economic status has negative health consequences, like higher risk of dementia and cognitive problems. This study posits that the effects of income volatility early in life, which can have a measured outcome on brain functioning in midlife, present a growing health threat in the U.S., where more than a third of households experienced a 25 percent or more change in income between 2014 and 2015, according to a report by the Pew Charitable Trusts.

As Adina Zeki Al Hazzouri, study author and an assistant professor of epidemiology at Columbia University, told CityLab via email: “Cognitive impairment, decline, and ultimately dementia are public health priorities with tremendous health care costs.” And income volatility is likely to get worse as a quarter of American jobs will face high exposure to automation in the coming decades, according to a recent Brookings Institution report.

The Pew study also found that American families crave stability even more than upward mobility. As the 2020 presidential election draws near, candidates are attempting to address income inequality and income volatility in their platforms.

Democratic candidate Andrew Yang has been promising a Universal Basic Income (UBI) that guarantees a certain amount of money to every citizen without the rigamarole of passing tests, fulfilling work requirements, or dealing with bureaucracy. And to address income inequality, senator and candidate Elizabeth Warren has proposed an “ultra-millionaire tax plan” that aims to tax the richest households in a country where the top 1 percent of individuals hold 29 percent of the wealth, with plans to put the money generated towards universal healthcare and free college education.

Volatility has effects on the economy at large, according to a report by the Washington Center for Equitable Growth, because consumption of goods like food and clothing drops after workers lose their jobs. National health spending is projected to rise to almost a 20 percent share of the economy by 2025, thus making the relationship between something like brain health and income instability a bit of a vicious cycle.

“To me, it’s just another example that economic disadvantages have very far-flung consequences, including things we don’t think about, like the health of your brain,” said Yaffe.

Powered by WPeMatico

Growing Up in a Walkable Neighborhood Can Increase Adult Income

The benefits of walkable neighborhoods are many and varied. People who live in walkable neighborhoods are more active, healthier, have more time to spend with family and friends, and report higher levels of happiness and subjective well-being.

Now, add another big benefit to the list: Children who live in walkable neighborhoods have higher levels of upward economic mobility.

That’s the key finding from a new study published in the American Psychologist. The study, “The Socioecological Psychology of Upward Social Mobility,” by psychologists at Columbia University, the University of Virginia, and the University of Illinois at Urbana-Champaign, looks at the effect of growing up in a walkable community on the economic mobility of children. The walkability measure comes from Walk Score. The economic mobility measure is based on the detailed data developed by economist Raj Chetty and his research team. Their data cover more than 9 million Americans born between 1980 and 1982 and gauges the probability that children from households in the bottom fifth of the income distribution will reach the top fifth by age 30.

The new study looks at walkability across more than 380 commuting zones, the basic unit used by Chetty’s team, which are similar to metro areas. It examines the effect of walkability in light of five key factors—school quality, income inequality, race, social capital (measured through community and civic participation), and the share of families with single parents—that Chetty and others have found to be associated with economic mobility.

Walkability has a sizable effect on upward economic mobility, according to the study. Indeed, walkability accounted for 11 percent of the additional variance in economic mobility above and beyond these five key factors. (Statistically speaking, the size of the R2 for their model increased from .41 without walkability to .52 with walkability added to the five factors).

The study considers the possibility that this result may reflect the effects not of walkability per se but of other features of walkability like density or urbanity. Research by Chetty’s team and others using their data has found economic mobility to be higher in communities that are denser (or less sprawling) and less segregated. To control for this, the study ran a series of additional models with variables for density, historic buildings, and other factors associated with urban neighborhoods. In all of these models, walkability remained closely associated with upward mobility.

The effect of walkability might also be picking up other factors that are associated with walkable neighborhoods like higher incomes, better health and longevity, more knowledge-based industries, more liberal social attitudes and less violent crime. So, the researchers conducted additional analyses to accounted for such factors. Here again, walkability remained closely connected to upward economic mobility.

As they write: “The more walkable an area is (as indexed by Walkscore.com), the more likely Americans whose parents were in the lowest income quintile are to have reached the highest income quintile by their 30s. This relationship holds above and beyond factors previously used to explain upward mobility, factors such as income inequality and social capital, and is robust to various political, economic, and demographic controls; to alternate specifications of upward mobility; and to potentially unspecified third variables.”

Or simply put, children who grow up in walkable communities fare better economically, controlling for a wide range of economic factors as well as the related characteristics of those neighborhoods.

There are several reasons, according to the study, why growing up in a walkable community leads to greater upward economic mobility. For one, families and kids growing up in walkable neighborhoods are less dependent on cars. This saves them a major expense. And being in walkable neighborhood also likely brings residents into closer proximity to a wider range of jobs and economic opportunities. To get at this, the study uses data from the American Community Survey on more than 3.5 million Americans to look at the connection between walkability, car ownership, and economic opportunity. “By reducing the need for a car,” the authors write, “a more walkable city opens its employment possibilities up to a far wider range of prospective employees than in a less walkable city.”

Walkable neighborhoods are also healthier, and this may be another factor which helps explain why they are better for economic mobility. Healthier people with higher levels of happiness and well-being tend to achieve more academically and are likely to find better jobs and are more productive at work. Walking also stimulates thinking and creativity—factors which are associated with both higher levels of well-being and employment in higher-paying knowledge jobs.

Walkable communities benefit from greater interaction and connectivity and help to create a greater sense of community and belonging. In contrast to suburbanites who live in large houses and commute alone in their cars, residents of walkable neighborhoods see and interact with many more people each and every day.

The study also makes two additional analyses—one based on a survey of Americans and the other based on a survey of South Koreans—to conclude that it is the sense of community connection or belonging that comes from living in a walkable community that is associated with greater upward mobility. “[I]t appears that walking was a more proximal predictor of upward social mobility than was walkability of the neighborhood per se,” the authors write. “The more an individual walks, the greater the sense of belonging one feels toward the city.”

In other words, heightened economic mobility is not a direct result of walkability, but rather the connectedness, the day-to-day interactions, the diversity of people and experiences, the exposure to others, and sense of belonging that comes from living in a walkable community.

Powered by WPeMatico

How Cities Are Divided By Income, Mapped

In Philly’s Center City live its richest residents—those who can pay the premium for that walkable, amenity-rich, green neighborhood. But just across the river, blocks away from the lush, expanding campuses of the University of Pennsylvania and Drexel University, the visual landscape of the city changes: Pawn shops, fast food eateries, boarded-up store fronts, and dilapidated houses. Only a few areas in West Philadelphia have become more prosperous (and whiter). The rest continue to suffer concentrated poverty and decline.

This is not just a Philadelphia story. To visualize the landscape of economic inequality in U.S. cities, the mapping whizzes at ESRI have created a captivating story map with multiple layers. It presents America’s stark income disparities—and in the few places where it exists, income diversity.

Let’s zoom in further on Philadelphia to understand ESRI’s three metrics. The first type of map divides census tracts into four differently colored categories based on the income brackets of the “predominant”—or most most numerous—household type.

The clusters of orange dots show the tracts where the most common household type makes below $25,000; the pink ones show where households in the $25,000 to $50,000 range comprise the largest group; the purple: between $50,000 and $100,000; and the blue ones are where rich households that earn over $100,000 live. Note: The larger the dot, the more populous the tract it is marking; and the brighter it is, the higher the concentration of the “predominant” income group.

In Philly, you can see that blue spots burn bright in the Center City area, in particular.

Predominant income groups in Philadelphia. (ESRI)

The second measure gives a sense of how the share of groups at the lower and higher end of the income spectrum compare with the national average. So, the orange clusters on the map below show the tracts where the share of households making below $25,000 is higher than the national share of 22.3 percent. The blue ones show where the share of households making over $100,000 a year is higher than the overall share of 24.6 percent. The brighter the dots, the higher the gap between the Census tract’s share and the nation’s. Put another way, this map shows the extremes of poverty or wealth. West and North Philadelphia, the map below shows, have deep pockets of red:

Income extremes in Philadelphia. Those with a greater share of incomes below the national average are in orange; those higher are in blue. (ESRI)

The third type of map, inspired by a USA Today diversity index, examines the likelihood that households belong to different income brackets in a given census tract. The green ones are more diverse; here, you’re more likely to run into people from different economic backgrounds. The pink ones are less so; most households in these tracts fall into a single income bracket, whether it be high, low, or moderate. While Center City and some areas in West Philly may have high concentrations of rich and poor folks, respectively, they also tend to have a little bit more income diversity than areas in the North.

Where incomes are most diverse in Philadelphia. (in green). (ESRI)

ESRI has a handful of other cities on the tab that all have their own distinct patterns. Below is the first type of map showing Los Angeles, which is majority residents of color, but still starkly divided by income. Lower-income households that make below $25,000 (in orange) are clumped together in areas including downtown and the San Fernando and San Bernardino Valleys.

The distribution in Los Angeles of the predominant income groups (lowest-income in orange; highest in blue). (ESRI)

In Chicago, the West and South sides contain households that have higher concentrations of poor households (in orange) compared to the national average.

Where the share of the groups with lower incomes (orange) and higher incomes (blue) are above the national average in Chicago. (ESRI)

And then there’s Detroit, mapped below based on the concentration of income brackets. Even though it has been recovering from its economic woes, and is poised to become a crucial regional player, the city has yet to distribute its gains to the most vulnerable residents. A quarter of the city’s residents still live in poverty—usually in the inner city area which, by and large, has very few households of other economic profiles.

Where income is most segregated (in green) and most diverse (in pink) in Detroit. (ESRI)

At the end of the day, the way economic inequality manifests geographically can be measured in a number of ways—all of which have their pluses and minuses. But pinpointing concentrations of rich and the poor is a crucially important sociological exercise. Rich enclaves tend to “pool their resources for the exclusive benefit of themselves,” writes political economist Robert Reich in the New York Times:

The renewed emphasis on “community” in American life has justified and legitimized these economic enclaves. If generosity and solidarity end at the border of similarly valued properties, then the most fortunate can be virtuous citizens at little cost. Since most people in one neighborhood or town are equally well off, there is no cause for a guilty conscience. If inhabitants of another area are poorer, let them look to one another. Why should we pay for their schools?

Put simply: As the rich cluster together, the poor get poorer, because the effects of living in poor neighborhoods are passed down from one generation to the next. That’s why dismantling economic silos within a city can boost its total well-being and economic health.

Powered by WPeMatico