Mo' Money: A Dave Fairbank Joint

A little bit about money and inequality. I’ll keep it brief, since what I don’t understand about money and finance fills libraries. One of the few things I know about money is that having it is beneficial, while not having it is troublesome. 

The pandemic drove that home. 

The well-heeled and the wealthy are getting weller-heeled and wealthier. [Note: I appreciate that we've convinced our most-accomplished professional scribe to adopt the informality of our tenuous relationship with the language.] America’s billionaires increased in both numbers and wealth – from 610 at the start of the pandemic to 745 as of October 2021; from totaling just shy of $3 trillion in combined wealth to more than $5 trillion, according to Forbes and Inequality.org. In just the first three quarters of 2021, the wealthiest one percent saw their collective fortunes increase by $13 trillion, to $43.94 trillion, and they controlled nearly one-third (32 percent) of the country’s wealth, according to numbers from the Federal Reserve. 

Meanwhile, those at the lower end of the economic spectrum mostly feel the heel pressing on their sternum. They’re more susceptible to disease and unemployment and hardship. Though job creation numbers are trending up and unemployment numbers down, as of last November there were still 3.5 million fewer workers in the labor force than before the pandemic. A survey of several thousand people by Capital One Insights Center found that 40 percent of low-wage earners in two-paycheck households reported that at least one person lost their job or had to leave their job during the pandemic. 

Whatever gains from changing jobs or holding out for higher pay are now being eaten up by inflation. Consider that the bottom 50 percent of the U.S. population (165 million people) possess 2.5 percent of the nation’s wealth, according to the Fed. Our march down this plutocratic path has sparked discussion. Is protecting citizens of the planet’s wealthiest nation limited to weaponry and defense? Should it include affordable, accessible health care? Infrastructure that doesn’t crumble beneath our feet? Clean air and water? Climate change mitigation efforts? Living wages? 

Among measures discussed are Universal Basic Income and Guaranteed Income. UBI is a payout from the government to everyone, and it was a cornerstone of fringe presidential candidate and New York City mayoral candidate Andrew Yang's policy framework. UBI is likely DOA in state and national circles, as nothing gets tagged “socialist” faster than governments giving money to individuals – though notorious “lefty” Richard Nixon seriously considered implementing a nationwide UBI as part of the War on Poverty before he was dissuaded. Guaranteed Income, on the other hand, is payouts to specific groups, and programs have sprouted up in recent years. 

According to Business Insider, there are at least 33 programs around the country amid or recently concluded providing a guaranteed income to groups of people, nearly all at or below the poverty level. In Alexandria, Va., a D.C. suburb, officials allocated $3 million from the American Rescue Plan Act and will pay 150 households $500 a month for two years, no strings attached. St. Paul, Minn., launched a program that will pay 150 families affected by COVID $500 a month for 18 months. In Tacoma, Wash., a tech company geared toward worker empowerment co-founded by Shaquille O’Neal is footing the bill for 110 people to receive $500 a month for a year. In Shreveport, La., 110 families will receive $660 a month for 12 months. Richmond, Va., will use funding from the Federal CARES Act and the Robins Foundation to pay 18 working families that do not qualify for benefits but still don’t earn a living wage $500 a month for 24 months. 

One program in Gainesville, Fla., will target formerly jailed people, with an aim toward breaking the cycle of poverty and incarceration. It will pay them $1,000 the first month and $600 per month for 11 months afterward and track their spending and behavior. Organizers point out that the U.S. spends $182 billion per year jailing people and has 25 percent of the world’s prisoners. Florida’s incarceration rate is even higher than the national average, with almost two of every 100 Floridians (391,000 people) either jailed or under criminal justice supervision. Because of the costs of incarceration and supervised release to prisoners and their families, they coined a phrase: too poor to be free. 

Several programs cite former Stockton, Calif., mayor Michael Tubbs and the program he launched in 2019 that gave 125 residents $500 per month for two years. The program, mentioned in this space, helped stabilize recipients’ lives and did not result in a spike in the purchase of so-called “temptation goods” (alcohol, drugs, tobacco). Nor did it disincentivize people from working, as critics of government payout programs often claim. Tubbs lost his bid for re-election and relocated to Los Angeles, where he serves as an advisor to Gov. Gavin Newsome and recently launched a non-profit aimed at broadening the state’s safety net and addressing inequities in housing, wages and spending. 

Tubbs’ fingerprints also are all over the Mayors for a Guaranteed Income coalition, a group of dozens of mayors around the country already overseeing GI programs or exploring implementation. One of MGI’s mantras is: Everyone deserves an income floor through a guaranteed income. Tubbs himself was quoted about his non-profit: “I would argue that the government has a responsibility not to give everything to everybody, but to make sure the rules and the laws and regulations are just — so that the outcomes are just.”