What Andrew Yang’s UBI Proposal Would Mean for NYC
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By traditional metrics, Andrew Yang’s 2020 presidential bid ended in defeat. But the political newcomer’s legacy endures, as his campaign centerpiece, universal basic income, slowly becomes more mainstream in cities across the country.
Now, as Yang embarks on a new campaign for mayor of New York City, he’s again made cash relief a pillar of his platform. It’s unclear yet how Yang will fare against an early slate of nearly three dozen candidates — thus far, he’sgarnered criticism for wrongly identifying a bodega, and for comments viewed asout of touch with regular New Yorkers. But as during his national run, he’s bringing serious policy attention to the concept of giving residents recurring cash payments, no strings attached.
This time, he’s talking less about the threat of automation to America’s jobs, and more about the economic devastation wrought locally by the coronavirus. Yang’s New York City proposal is not nearly as expansive as the “Freedom Dividend” of $1,000 a month for all American adults he pitched as a presidential hopeful. And it would not be “universal,” instead targeting half a million of New York City’s lowest-income residents. Recipients would receive an average of $2,000 annually, depending on income,costing the city $1 billion a year, with the potential for expansion through private funding.
“Most everyone knows that if I had my way, we’d all be getting $1,000 a month from the federal government,” Yang told Bloomberg CityLab. “I’m thrilled to make it happen in the biggest, greatest city in the country.”
But just as Yang isn’t the first to advocate for a guaranteed income — the concept had champions from prior generations in Thomas Paine and Martin Luther King Jr. — he’s not the only one with a plan to bring it to NYC. Two of his rivals, Dianne Morales and Carlos Menchaca, along with a candidate who’s since dropped out, Max Rose, have also proposed some form of guaranteed minimum income, citing the pandemic’s disproportionate impact on New York’s poor.
They join a chorus of leaders in other U.S. cities who have advocated for national guaranteed income policies or launched local pilots in their communities over the last year, including a group of nearly 30 mayors who formed a coalition during the pandemic called Mayors for a Guaranteed Income. At least a dozen short-term guaranteed income programs will be running in American cities this year, with an eye toward testing the viability and best design of such a policy. Though it would disburse far less each month, Yang’s program would be much larger in scale, and rather than a pilot that sunsets within a year or two of launching, he says it would be a permanent part of his administration.
With overlapping economic, public health and environmental crises, not everyone agrees that a basic income meets the moment’s complex needs. Robert Greenstein, the president of the nonpartisan Center on Budget and Policy Priorities and a prominent UBI critic said the narrower focus of Yang’s NYC proposal on low-income people is preferable to pure “universal” proposals that would give money to everyone. But he cautioned that there would be inevitable trade-offs. “If NYC had a new $1 billion to spend, is this the top priority for it?” Greenstein wrote in an email. “Does it, for example, rank ahead of doing more to address NYC’s very serious affordable housing crisis?”
For Yang and other proponents, the simplicity is the policy’s selling point. Yang’s proposal could lift about a third of New Yorkers out of deep poverty and eliminate 10% of the poverty gap in the city, said Robert Hartley, assistant professor at the Columbia School of Social Work. From an economic standpoint, providing cash payments to those in the deepest poverty could also support businesses in disadvantaged neighborhoods.
“It’s definitely redistributing money into the hands of folks that are much more likely to spend it right away and spend it their neighborhoods,” Hartley said. “That’s hopefully the beauty of pure cash plans.”
More than half of the city’s low-wage workers, who are predominantly Black and Hispanic, lost employment income from the pandemic, according to an October study by The Robin Hood Foundation and Columbia University. In September and October of 2020, 32% of adults reported that they used a food pantry at least once in the 12 months prior, an increase of more than 250% relative to January and February, a separate Robin Hood study found.
One major obstacle for any candidate proposing a basic income, however, will be implementation, especially given that 5.4% of American households, primarily lower-income households, don’t have bank accounts. In New York City, an estimated 350,000 residents have no bank account, with the largest proportion of unbanked residents concentrated in the Bronx and in neighborhoods that are disproportionately Black and Latino.
It took months for many Americans to receive the government stimulus checks that were part of the CARES Act, and the Internal Revenue Service had trouble identifying individuals who were owed payments but weren’t connected to the tax system or a federal benefit program. As a result, payments to those in under-served communities and people experiencing homelessness were delayed or never received.
“There’s always the question of the distribution. As we’ve seen with stimulus checks, those who are readily banked get them quickly while some are still waiting,” Hartley said. “But it’s really getting money to people who need it.”
Yang says his plan would specifically target the unbanked as part of a broader anti-poverty platform. His proposal hinges on expanding the use of the city’s existing municipal ID card system, IDNYC, which residents can already use to access benefits, and on opening a “People’s Bank of NYC.”
“The goal is to try to make the IDNYC program as broadly used as possible,” he said, linking the basic income to the card, and the card to a bank account in the public bank. “We don’t have any illusions: we’re not going to get everyone in the most dire of circumstances.”
Another pervasive question is how to pay for a program of this scale, especially with city budgets battered by the pandemic. Stockton, California, whichled the wave of current U.S. pilots, used philanthropic dollars to fund its program, and several other cities are following suit. Yang’s would incorporate private donations while sourcing $1 billion directly from the city budget.
Among his ideas to raise that extra revenue is to identify “inefficiencies” in the current social safety net that Yang says could be made redundant if the city’s poorest were given monthly stipends. By keeping people out of homelessness, the city could spend less on homelessness services, he suggested, hitting a trip wire at the core of many basic income debates: whether unconditional cash should be layered atop the existing social safety net, or replace it in part or in full. (Since the basic income benefits would not be categorized as income, Yang’s policy agenda states, recipients wouldn’t have to worry about the earnings putting them over the income threshold for other forms of aid like Medicaid or income-based housing assistance.)
An average monthly benefit from Yang’s plan would come out to $167 a month. Median rent for a one-bedroom apartment in the city is nearly $2,500 a month,according to Zumper.
Another way to capture new revenue would be to levy taxes on previously tax-exempt institutions, like Madison Square Garden and Columbia University, Yang suggested. As for whether he’d raise taxes on the city’s wealthy, Yang demurred, saying that adjusting income tax was out of the control of the mayor.
“I see this as a smart investment and also a pro-human investment,” he said.
While federal stimulus checks proved the difficulty of distributing funds to hard-to-reach populations, and how politically divisive getting continued relief passed would be, it also demonstrated how fast the government can move when it’s pushed — and how far public opinion on cash support has shifted. Yang says he’s noticed already that many of the key objections to a Freedom Dividend he heard last year have been muted.
“A majority of Americans now are on the same page. A majority of Americans are for cash relief that’s recurring and in perpetuity,” he said. “I look forward to keeping the obviousness of UBI growing.”
The 1970s saw a similar wave of apparent momentum for guaranteed payments, with a blitz of negative income tax policies in cities like Seattle and Denver at the end of the Nixon administration. But to gauge the effectiveness of such policies, there’s “nothing as valuable as near-term data that shows how it works in the current political and economic environment that could push the conversation,” said Brooks Rainwater, a senior executive for the National League of Cities and director of the organization’s Center for City Solutions. “Being able to look at it for what it does for a couple hundred people versus what it can do for half a million people is going to tell us something different.”
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