You may qualify for $500 a month basic income if you live in this U.S. city

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The city of Stockton, California, has plans to give several dozen families a monthly stipend of $500 in an effort to study the economic and social ramifications of a universal basic income.

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What would you do with $500 in basic income each month?

Mayor Michael Tubbs is a proponent of the Stockton Economic Empowerment Demonstration (SEED), which is an experiment that’s being funded by the Economic Security Project.

The ESF, which is co-led by Facebook co-founder Chris Hughes, will contribute $1 million to Stockton’s yearlong research project.

The goal of SEED is to track how residents spend or save the money, and how it impacts their self-esteem and identity, according to reports.

Stockton is a city that’s been beset by economic woes — stagnant wages, high housing prices, the disappearance of middle-class jobs and the nascent threat of automation.

Forbes reports that median household income in Stockton is $44,797, well below the Golden State’s median household income of $61,818. Meanwhile, unemployment is at 7.3%, which is about double the national average.

The city’s hard times, coupled with overspending on prior development projects, drove Stockton into bankruptcy in 2012.

But this California city isn’t alone in experimenting with the idea of a universal basic income.

In nearby Oakland, startup accelerator Y Combinator piloted a universal basic income program last year with an eye toward eventually rolling out a larger scale program. Y Combinator’s particular program is providing 1,000 people with $1,000 a month through 2022.

While the idea of a basic income is controversial among some and popular among others, it’s actually nothing new.

The idea was first proposed by President Richard Nixon in 1969, though he called it a negative income tax. His idea was that every American would start with an allowance that could cover many of life’s basic necessities.

Ultimately, Nixon’s idea was shot down in Congress and it never came to pass.

Meanwhile, you might be wondering what money expert Clark Howard thinks about a universal basic income.

“My belief is that a basic income used to encourage work is fine,” Clark says, “but one just for breathing takes away the incentive to be productive.”

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the New York Times #1 bestseller Living Large in Lean Times. As a single widowed parent of two young children, he strives to bring savings tips to that unique subset of individuals. He can be reached at theo@clark.com.
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