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Economy & Business

Newark to Test Universal-Basic-Income Program

Mayor of Newark Ras Baraka speaks in New York City, N.Y., April 8, 2015. (Mike Segar/REUTERS)

Newark mayor Ras Baraka announced last week that the city will pursue a universal-basic-income pilot program that would provide residents with monthly income regardless of their employment status.

“We believe in universal basic income, especially in a time where studies have shown that families that have a crisis of just $400 a month may experience a setback that may be difficult, even impossible to recover from,” Baraka said during his State of the City address on Tuesday, noting that one-third of Newark residents live in poverty.

Baraka did not explain what portion of Newark’s 285,000 residents would benefit from the program or exactly how much each beneficiary would receive, saying only that his administration would create a task force to study the matter.

The announcement comes one month after Stockton, Calif. became the first U.S. city to implement universal basic income, providing $500 prepaid debit cards to 130 adults living in the city’s lower-income neighborhoods, according to the Sacramento Bee.

Finland also implemented the program on a national scale in 2017, giving 560 Euros per month to 2,000 unemployed Fins before ending the program in 2019. Ontario, Canada began a similar program in October 2017, but a newly elected conservative government discontinued it last summer after finding it was “not sustainable.”

The notion of providing citizens with no-strings-attached income remains popular in progressive circles in the U.S. despite its international failures, and a number of Democratically controlled city government are expressing a willingness to at least study the issue.

Outgoing Chicago mayor Rahm Emmanuel established a task force last year to study the possibility of implementing universal basic income in the city and there is legislation currently pending before the city council that would provide 1,000 families with a $500 monthly stipend.

Upstart Democratic presidential hopeful Andrew Yang has further popularized the idea, making its implementation on the federal level a central tenet of his 2020 platform. Under his proposal, every American would receive $12,000 annually to help offset the effects of automation, which Yang argues has already dramatically destabilized the economy.

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