Andrew Yang, who is the youngest Democratic presidential candidate, is giving $1,000 a month to two families as a way to show that a universal basic income, a government-funded policy for all American adults with no strings attached, has a positive outcome on the economy.
CBS News reports that the 44-year-old New York City entrepreneur distributes $1,000 of his personal fortune to one family in Iowa and one in New Hampshire — the first two states on the presidential caucus and primary calendar — every month this year to prove the efficacy of his so-called Freedom Dividend.
“This would enable all Americans to pay their bills, educate themselves, start businesses, be more creative, stay healthy, relocate for work, spend time with their children, take care of loved ones, and have a real stake in the future,” Yang says on his campaign website.
According to CBS, India, Canada, and most recently, Finland, have attempted implementing some type of a universal basic income (UBI), which some studies show that the policy helps boost the economy while allowing workers to find better jobs.
However, preliminary results from Finland’s nationwide test show that it did not lead to gains in employment, but did improve beneficiaries’ health and well being.
“On the basis of an analysis of register data on an annual level, we can say that during the first year of the experiment the recipients of a basic income were no better or worse than the control group at finding employment in the open labor market,” said Ohto Kanninen, Research Coordinator at the Labour Institute for Economic Research.
But the handout reduced recipients’ stress levels.
“The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group. They were also more confident in their future and in their ability to influence societal issues,” said Minna Ylikanno, Lead Researcher at social services agency Kela.
In the U.S., the Stockton Economic Empowerment Demonstration, or SEED, this month will begin testing a program in Stockton, California, that distributes $500 a month to approximately 100 residents — making it the first American city to experiment with free money, CBS reports.