The economy under President Trump is roaring after 223,000 jobs were added in May and the national unemployment rate dropped to the lowest it has been in 18 years. But one young Democratic mayor believes that jobs aren’t enough to lift people out of poverty. He thinks it’s up to the government to do that by giving people $500 of free money a month.
Michael Tubbs made history at age 26 by becoming the youngest person to get elected mayor of Stockton, California, a city of 300,000 south of Sacramento. Leading a city that had recently gotten out of bankruptcy after being the biggest U.S. city to ever declare bankruptcy, Tubbs is desperate to lift up people in a metropolis where one out of every four residents lives below the poverty line.
The city manager at the time said it was over-spending that put the city hundreds of millions of dollars in debt, Reuters reported. But spending more is what Tubbs wants to do in order to give poor residents free money with “no strings” attached.
According to the New York Times, Tubbs will give $500 a month to 100 select families to see how the experiment works in hopes that the program can be expanded in the future.
Where is the money coming from? According to Reuters, it’s coming from a philanthropic network run, in part, by Chris Hughes, who is pushing for the U.S. government to fund a similar project for any American who earns less than $50,000 a year.
Where would the money come from to give $500 a month to that many Americans? Hughes wants a 50 percent tax rate on anyone earning more than $250,000 a year.
Tubbs jumped at the idea of someone giving his city free money. The “guaranteed income” concept is based off a similar program in Finland and the Alaska Permanent Fund.
The Finnish government is ending the program this year, though. And the Alaska fund comes from massive revenues from the mining of natural resources, which Stockton doesn’t have.
Critics point out two major issues with giving Stockton residents a free “guaranteed income” long-term, though. One, there’s no viable way to fund such a program. Two, it could encourage people to not work harder and get out of their impoverished circumstances.