The first major basic income trial in the US just announced how it plans to give away free money

Stockton Mayor Michael Tubbs

Stockton, California, will begin an 18-month basic income trial in February 2019.
100 residents will receive $500 each month, with no restrictions on how the money can be spent.
Researchers will check in with the recipients throughout the trial to figure out how basic income affects people's health and financial security.
This will be the first major basic income trial in the United States. The pilot follows the recent cancellation of a three-year basic income experiment in Ontario, Canada.

Stockton, California — which announced plans last year to start the first major basic income pilot in the United States — will kick off its 18-month trial period in February 2019, Mayor Michael Tubbs announced Monday.

The program, named the Stockton Economic Empowerment Demonstration (SEED), will provide 100 residents with $500 a month for the duration of the trial. Recipients do not need to be working during the trial, and there are no restrictions on how the money can be used.

Stockton residents can qualify for the trial if they are at least 18 years old and reside in a neighborhood with a median income of $46,033 or less. Individuals who earn more than $46,033 can still be eligible as long as their neighborhood fits the criteria.

SEED organizers will randomly select 1,000 initial residences across the eligible neighborhoods, and each one will receive a notice in the mail asking about interest in participating. From those who choose to fill out a form with demographic questions, organizers will select 100 people (also randomly) to begin receiving basic income.

Researchers will regularly check in with the recipients to determine how basic income affects their health, financial security, and civic engagement. The researchers will also monitor a control group.

The city's basic income pilot is fully funded by private donations, not tax dollars, according to a SEED report released Monday. Donors include Facebook co-founder Andrew McCollum and sociologist Gretchen Sisson, who is McCollum's wife. The Economic Security Project — co-chaired by Facebook co-founder Chris Hughes, Center for Community Change Action president Dorian Warren, and Peers.org co-founder Natalie Foster — is a major donor as well.

"We hope to challenge the entrenched stereotypes and assumptions about the poor, and the working poor, that paralyze our pursuit of more aggressive solutions," SEED wrote in its report. "We aim to illustrate how widespread and episodic poverty is."

While Tubbs' basic income initiative garnered national attention, some Stockton residents criticized the mayor for unrelated actions and launched a petition in January to remove him from office. The petition, which alleged wasteful spending and disregard for the community, failed to gather the necessary votes.

Stockton was the largest city before Detroit to declare bankruptcy, but its economy has improved in the past several years as the population grew and crime rates fell. However, the city's median household income of $46,033 remains below California's median of $61,818. The unemployment rate in Stockton is about 7%, which is significantly higher than the state average.

Tubbs previously told Business Insider that the basic income pilot could give people more opportunity to find fulfillment in their lives.

"In our economic structure, the people who work the hardest oftentimes make the least," Tubbs said. "I know migrant farm workers who do back-breaking labor every day, or Uber drivers and Lyft drivers who drive 10 to 12 hours a day in traffic. You can't be lazy doing that kind of work."

The Stockton experiment is starting shortly after other highly-publicized basic income pilots either ended abruptly or were not renewed.

Most recently, the provincial government in Ontario, Canada, killed a three-year pilot after only one year. About 4,000 people were receiving a monthly stipend through the program, and many recipients expressed shock and outrage after Premier Doug Ford broke his promise to continue the program.

Earlier this year, officials in Finland announced that a two-year pilot program giving basic income to 2,000 people will end in January 2019. Four months into the pilot, some of the people receiving $600 a month had reported lower stress levels.

Finland's program will run for the intended two years, but the government denied a request for additional funding from Kela, the country's social security agency, and said it is looking at different social welfare projects instead.

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