In our last episode on universal basic income, or UBI, a conversation between UC Berkeley MPP ‘20 student Sarah Edwards and Economics and Public Policy Professor Hilary Hoynes revealed that the landscape for UBI proposals and experiments is ripe.

In this episode, Goldman School student Sarah Edwards interviews Lori Ospina, about Stockton’s guaranteed income program, Stockton Economic Empowerment Demonstration (or SEED for short). With a $1 million grant, SEED will distribute cash to 100 residents falling below the area’s $64,000 area median income. Although modest in scale, SEED’s potential to ignite other policy conversations on UBI on the local and state level is much greater in magnitude.

With growing acknowledgment of a wealth gap in the U.S., Stockton’s program could be dually meaningful -- for the residents of this Central Valley city and for future conversations on social safety nets.

Transcript

Sarah Edwards [00:00:00] One of the most interesting on the ground policy trials in the US is happening not in Washington in DC or in New York or in L.A. but in Stockton, California.

 [00:00:19] Stockton is embarking on a trial of a guaranteed income program. The project has eyes on it throughout the country, and today we get to talk to the person who's in charge.

Lori Ospina [00:00:30] I knew that amongst policy circles it was a really exciting project and that it was a really big deal. I thought it was a really big deal. I never anticipated the way that people all over the country and really all over the world would think it was such a big deal too.

Sarah Edwards [00:00:48] Stockton Economic Empowerment Demonstration, SEED seat for short, has received a significant amount of attention as one of the first universal basic income trials in the country. People are excited because it's a chance for researchers and policy makers to see what really happens when people receive a guaranteed income. Will this be enough to show that a UBI is a viable policy option? Will it translate to long term changes in the U.S. social safety net? Will Stockton be able to show the naysayers that UBI actually can have a positive impact?

 [00:01:34] I'm Sarah Edwards and this is Talk Policy to Me. Today I speak with Lori Ospina, the director of SEED and Goldman School of Public Policy alumn. In case you're just jumping in here, this is part two of our three part series examining UBL. We started last episode with the theory. Goldman School Professor Hilary Hoynes walked us through what we know and what we don't know about guaranteed income programs and how those programs fit into the broader conversation around the social safety net. Today we dig into the practical side of UBI. What do people do with just a bit more income? In what ways does it benefit them, and to what extent can it actually help lift the poorest in our society out of poverty? What lessons can we learn from small scale trials? Let's talk universal basic income in the real world.

 [00:02:38] [Intro Music]

Sarah Edwards [00:02:54] We're meeting with you to talk about the Stockton Economic Empowerment Demonstration. But while we in Berkeley are very close to Stockto,n it's somewhere that our listeners might be a little bit unfamiliar with. Can you help paint us a picture of Stockton, sort of the challenges that it's faced and the strengths that has.

Lori Ospina [00:03:13] Yeah. Stockton is a city of about 318,000 residents located in the Central Valley. It's about 75 miles from Oakland about 85 miles from San Francisco. And while it's relatively close we often say that it can feel like it's a world apart. Stockton has had a history of a lot of challenges as a city. Around 2008, 2009 they experienced some of the height of the foreclosure crisis in their city. A lot of residents lost their homes and a lot of them lost their hope. In 2012 the city declared bankruptcy making it one of the largest cities to declare bankruptcy and it's been bouncing back from that rough patch. But it's a city that's got a lot of promise. It's residents are proud of where they're from and right now it feels like there's a lot of momentum and excitement as the city kind of transitions back and starts reimagining their future.

Sarah Edwards [00:04:18] So what exactly is the Stockton Economic Empowerment Demonstration?

Lori Ospina [00:04:24] SEED is basically the first time that a public official who represents a U.S. city has decided to test out the concept of a guaranteed income or a basic income. We received a grant for one million dollars from the economic security project to kind of, for lack of a better phrase, plant the seed of this idea of guaranteed income or basic income. So with the funds we will basically invest in about 100 Stocktonians, local Stockton residents, and test out to see what happens when you give people access to cash.

Sarah Edwards [00:05:05] In our conversation with Hilary Hoynes we came up with a metric of what exactly a universal basic income is and what it isn't. We talked a lot about how those three components -- universal, basic, and income, really led to some understanding if something was true UBI or something that we considered as a UBI-lite. So how does seed fall within that spectrum?

Lori Ospina [00:05:36] Generally, how you design the initiative really impacts what you can or cannot call it. The biggest version I guess is universal basic income and those words have a lot of implicit meaning. So universal really would suggest that everyone in a given location or geography would be benefiting from this program or this benefit receiving this additional income. And the word basic often tends to suggest that all of one's basic needs would be met. So in Stockton we've taken to calling it more a guaranteed income because we're just getting started and we're just testing out the idea. So we'll be doing it with a smaller sample of recipients we'll be providing the guaranteed income to about 100 folks initially and then basic, unfortunately, we also don't use because we know that five hundred dollars a month, which would be the amount we would be giving them, is a little bit less than what they would need to meet all of their basic needs. So guaranteed income felt like the most appropriate terminology for what we're actually testing here in Stockton right now.

Sarah Edwards [00:06:53] So it sounds like there's a lot of different pieces to this and I'm really excited for us to dive into that. But first off what really was the primary goal behind this project?

Lori Ospina [00:07:04] Yeah. So the primary goal at a high level was really just to show the country and really the world what it could look like if we introduced a policy like basic income or guaranteed income in the United States. For a long time now there's been a different series of kind of programs, initiatives in other states, other cities, or other countries where this concept of unconditional cash, no strings attached cash, has been tested out, but most of those experiments or programs have kind of lived in white papers on shelves in academia and haven't really been super duper accessible to everyday citizens. So at its core SEED was really an attempt to demonstrate what it would look like if we actually tested this out in a U.S. city in the year 2018 and try to kind of humanize that experience a little bit, both of the recipients but also folks who are just simply experiencing financial insecurity and put a face to it so that people can really start to imagine it.

Sarah Edwards [00:08:07] And so you've painted the background for us. So what stage is the project in right now?

Lori Ospina [00:08:13] Yeah. So we're still working on getting things up and running. Mayor Tubbs officially announced the launch of the program last October and committed to a nine month design phase during which we would attempt to kind of get the whole program set up and structured. You know we've now kind of come out of that nine month phase a month and a half ago or so and now generally pretty much know how we are going to implement this but just kind of doing some of the final prep work in order to be able to do so. I've been heard saying this before, but it's pretty easy to hand out money, it's a lot more complicated to do it in a thoughtful way that we can measure it and learn from it in the long run. And so we're working on a lot of our finishing touches both for how we will distribute the income and choose recipients but also how we will measure and evaluate it. We'll hope to have a finalized cohort by January of next year and then ideally begin disbursements in February of 2019.

Sarah Edwards [00:09:16] How have you started to make the decisions around who gets the money? We've talked about how something could be universal if we give it to everyone, but perhaps it will actually have a bigger impact if we limit who gets it to those who need it most. What approach are you taking here?

Lori Ospina [00:09:34] We always say money touches all aspects of every person's life. And so with a project like this there's a million different ways we can take it. So some of the major decisions that we ultimately had to make was how will we measure and evaluate this. And so that meant bringing on a team of independent researchers and going through a process to select folks who we thought would be well suited for this particular project. Embedded in that decision around how will you pick recipients though are a lot of other questions around kind of what do we want to be able to say at the end. You know what kind of project do we want. Where do we want to center our impact and what not. And so what we heard from community stakeholders and members of the community was that ultimately everyone really could benefit from some additional help like this, the majority of Stockton residents that we've spoken to feel like this would be helpful, but everyone also really wanted to make sure that the process was really fair and inclusive and representative of the city. And so after conversations we really realized that there wasn't a single group that people wanted to see benefit, or there wasn't a certain part of the neighborhood. There was this real spirit of wanting this to be as universal in theory as possible. So even though you know we can only choose about 100 recipients, how could we make that group look and feel universal or representative of Stockton and all of its people? And so what we ultimately landed on was a selection process where we will randomly select neighborhoods where the area median income is at or below $46,000 which is the area median income for the city of Stockton, and any neighborhood, or census tract to be more specific, that meets that kind of threshold is included into our potential sample. And from there we'll randomly send out mailers or letters to about 1000 addresses across the city in each one of those census tracks. And from that we'll see who we hear back from anyone we hear back from we'll be put into a secondary lottery where we randomly select 100 recipients and anyone who we heard back from who was not selected to be a recipient will invite to participate in our control group for a small modest compensation.

Sarah Edwards [00:11:50] And about you know how people actually receive the money -- are they getting it in cash, or is it going on to like a debit card.

Lori Ospina [00:11:57] We're getting pretty close to finalizing that actually. It's just funny you know several people in Stockton were like "you can't just hand out cash you know" and I was like I know. We talk about it as cash a lot but what we will actually end up doing is using a prepaid debit card.

Sarah Edwards [00:12:13] So folks will basically receive a card at the beginning of the program and then every month we'll refill it. Something that I found really interesting is that one of the conversations we're having right now is around what day of the month will we actually begin disbursements. I think everyone intuitively just assumed first of the month, but it's some led to some really interesting conversations with my research and evaluation partners. Just thinking about how the start of the month might not be the most helpful time actually so we've been exploring and playing with different dates where we might actually distribute income. We haven't set up anything final yet though.

Sarah Edwards [00:12:48] Definitely I imagine how people use it might be different if it comes in a moment where they're waiting for a paycheck rather than the same time as a paycheck.

Lori Ospina [00:12:56] Yeah we just hear from a lot of people all the time that that third and fourth week are amongst the most difficult in a lot of the households. So it might be an interesting moment to intervene.

Sarah Edwards [00:13:08] I imagine some of some of these residents might be receiving SNAP benefits or other general forms of assistance, what might happen to those other benefits?

Lori Ospina [00:13:19] Yeah, that's been quite a learning journey as well. I was just talking about that with someone this afternoon. Ultimately we've had to kind of navigate that system and try to understand how it works to see how it'll impact our recipients and what we found is that there's not a lot of room to influence there right now as the current public benefits system is structured. Anything that comes into the household that is recurring and reasonably anticipated even if it's given as a gift is perceived by public benefits as beingreportable income. And so we've basically landed in a situation where we are not going to try to overly control that environment or intervene in that environment. That's kind of how the system is set up this way. So we're interested in understanding some of the decisions people make as they're operating in that environment. What we'll do essentially -- two things. One is that ultimately we are trying to create a representative sample and if we do that successfully not everyone who receives the basic income or the guaranteed income will be on public benefits. We actually anticipate it will be a reasonably small portion of the group. That said, for that segment of the population if someone is currently receiving benefits and wants to understand kind of how it might impact them, we'll set up kind of an access to some benefits. I hesitate to use the word "counselling" but advice, where experts on the sign up process and the qualifications for public benefits will be available to help provide any guidance to anyone if they're unsure about whether accepting the additional income is in their households best interest or not. I think there will be some people who ultimately decide that the benefits they're receiving currently outweigh the benefit of an extra five hundred dollars a month. I think there's some people who will decide that getting an extra five hundred dollars a month over which they have complete and total agency and decision making power might actually be more beneficial than continuing to receive existing public benefits. At the end of the day though we will essentially make sure people have all of the information and make a fully informed decision, know when he risks that they might be facing, and then leave the decision to each one of them.

Sarah Edwards [00:15:42] Next up we're going to be talking about how the attention that the project has gained might actually be impacting how it's translating in the work.

Lori Ospina [00:15:51] There's a lot of recognition that this project has put Stockton in a really exciting spotlight and is really changing the image of Stockton. To see the way that the narrative around the city is changing is really exciting and I think people can appreciate that.

Sarah Edwards (Ad) [00:16:17] Talk policy to me is a project of the Berkeley Institute for the future of young Americans. BIFYA is interested in creating a policy agenda that invests in the next generation of Californians. By promoting bold leadership among millennials BIFYA it ensures that young people play a central role in promoting their generation's long term security and success. You can find out more about BIFYA's current research projects on our show notes page.

Sarah Edwards [00:17:00] Welcome back. We're speaking with Lori Ospina, the director of the Stockton Economic Empowerment Demonstration. We've discussed the shape of this guaranteed income trial and how it will be providing 500 dollars per month to 100 Stockton residents over the course of 18 months.

 [00:17:19] So now that the study design has been finalized and the media is increasingly gaining interest, how have the people of Stockton been responding?

Lori Ospina [00:17:30] I certainly don't want to sugarcoat it. There are people in Stockton who are concerned about the projector didn't immediately migrate to it as staunch supporters who have taken a little while to understand it better before they've come around possibly. But overall despite acknowledging that there certainly are some people who aren't wildly enthusiastic about it, overall the overwhelming majority of people in Stockton really are excited about it. Most of them are pretty realistic and realize that odds are not necessarily in their favor that they'll benefit directly. But there's a lot of recognition that this project has put Stockton in a really exciting spotlight and is really changing the image of Stockton publicly. It wasn't too many years ago that if you Googled Stockton two things came up: bankruptcy and homicide rates. And so to see the way that the narrative around the city is changing is really exciting and I think people can appreciate that. I heard someone say this the other day and I thought it was so poignant. People are far more inclined to invest in themselves and their futures if they believe that their community wants to invest in them or is willing to invest in them. And so that's really my hope that through the project these 100 recipients will realize that you know someone is investing in them and I think they're going to do pretty awesome things.

Sarah Edwards [00:19:02] What will you see as success for this project?

Lori Ospina [00:19:06] I'm channeling the Mayor. Mayor Tubbs a little bit, but he's always very reassuring to me that simply having evidence is going to be really exciting. Sometimes when I'm overly stressed out or worrying about some small detail, he'll remind me that the sheer fact that we are even going to be able to say anything at all about this topic, that this will have happened even, is pretty awesome and that we shouldn't underestimate how much that is a success in and of itself. You know I think for me part of it is also like while I'm really excited to see what the treatment group does and what the actual recipient group does with the funds, I'm also really excited to hear from our control group and hear from just everyday residents of Stockton about what their experiences are and the challenges that they face, the barriers that they face to economic security. So you know on the one hand I think this is gonna be a project that humanizes the experience of receiving a guaranteed income. But I also think it's hopefully going to be a program that humanizes the experience of financial insecurity and just kind of allows us to illustrate what are some of the hurdles people face that are not their own fault, that they encounter systemically out in the world that kind of keep them from achieving financial stability. And you know people are always like well, with the results you want to get the right results and kind of try to tie that to success, and I think I've been trying to decouple what our results say from success because at the end of the day also I think that even if people use the five hundred dollars in a way that maybe wouldn't have been my ideal scenario, I think we're going to learn from that as well. And so it's similar, as the control group and non-recipients, what got in their way, what held them back, what obstacle did they face that led them to make this decision instead of that. And I think all of that will just help and form a healthier conversation around poverty and inequality moving forward.

Sarah Edwards [00:21:16] Absolutely. So if this project goes well, whether that means the tangible results or more just like success on that community level that you're talking about, what would be the ideal world next steps?

Lori Ospina [00:21:33] So I mean ideal world next step is that some policymaker and or ideally several policymakers at the state and even at the national level would take note and really rise up to try to lead in some way, to kind of bring something like this to the table. We're very cognizant of the fact that at this moment in time funding this in a long term capacity at the city level will be hard, so generating some enthusiasm at the state and national level, and to some regard I think that's already happening but continuing to do that and getting people who sit in seats at the state and national level on board and wanting to support some sort of enhanced safety net.

Sarah Edwards [00:22:24] That gives a lot of room for different positive outcomes. But what are the challenges that you've been facing?

Lori Ospina [00:22:32] Well I always say one of the biggest challenges is just the limits of the number of people we actually can serve. We are doing everything we can to make sure people really understand the reality of the project and are trying to calibrate expectations around the city. But obviously that's something really hard. We've heard from a lot of people, well beyond 100, who share really difficult stories about how a little extra cash could help them and in profound ways and it's sad to realize that we won't be able to serve all of those people. Other challenges will be maintaining the privacy and the security and the well-being of the recipients. That's something we're all tremendously committed to and want to be cautious about. So we're still fine tuning some of those logistics and they will work exactly. I don't really anticipate any problems but it's an area where we want to over plan and make sure we have all of the precautions in place.

Sarah Edwards [00:23:36] Especially as this has gained so much attention, that really makes sense. One of the things that makes me really excited about this project in Stockton is that it doesn't stand in isolation with Professor Hilary Hoynes we talked about how any kind of a UBI or a UBI-lite doesn't solve all the problems by itself. It just can't do that. Under Mayor Tubbs Stockton is bringing in a whole range of out of the box approaches to create change. This includes a college scholarship program and a gun reduction strategy in addition to SEED.

 [00:24:13] I actually think some of those other programs are like, I'm sometimes a critic and I'm quick to say that in some ways those programs even excite me more. I think there's so much potential there and the way that the mayor is really stringing them altogether and pushing the different programs to interact towards this collective impact is really exciting and part of what personally drew me towards the city and the work happening in Stockton. But you know they're all really centered around this idea of what the mayor always says, the best investment we can make is in our people. And so he's basically willing to test new ideas try out new approaches and really just put his money where his mouth is on this idea that if you invest in people they will rise up to the opportunity that you give them and really push forward to make their lives and the lives of their neighbors and their community better.

Sarah Edwards [00:25:16] So there's this push and pull that comes in the conversation around UBI. One of the things that's actually brought in a lot more popularity in recent years is seeing it as a solution to the jobs that we already are and will continue to be losing through rapidly advancing technology and automation.

Lori Ospina [00:25:36] I think on the ground in Stockton a lot of us who are working on this don't have to look around very hard to realize that we don't have the luxury of waiting for the robots to come. There's people who are struggling today and right now. I think a lot of us especially on the ground in Stockton are very much driven by the poverty lens and just realizing that people are working really hard all day and still struggling to make ends meet. We don't have to wait for the impending problem. The problem is real and already here.

Sarah Edwards [00:26:25] So is SEED a true UBI? No. Does it seem like it will be able to answer key questions for researchers around the long term, generational impact of additional wealth? Probably not. But will this seed project potentially improve the lives of people living in Stockton? We think so. And will it teach us something more about how we can better support those living under the poverty line with some out-of-the-box thinking? We don't know the answer yet, but we'll be watching closely to find out. For show notes. Visit us at talkpolicytome.org. Music heard on today's episode is by Pat Mesiti-Miller and Michael Quiroz. Talk Policy to Me's executive producers are Bora Lee Reed and Sarah Swanbeck. Michael Quiroz is our engineer. I'm Sarah Edwards. See you next time.