Compton, with a population of 95,000, has upwards of 1 in 5 residents living in poverty, double the nationwide average, city officials said. Local housing assistance in the city is at capacity, and 46% of its residents are renters. Since the outset of the pandemic, city officials say its unemployment rates have skyrocketed to 21.9%, and a growing segment of its population are relying on food pantries.

“People in our community are going through tough times, and I know that guaranteed income could give people a moment to navigate their situation, and have some breathing room to go back to school, explore a new career path, spend time with their children, or improve their mental and emotional wellbeing.”

A number of cities across the country are expressing more willingness to consider universal basic income, and the concept was the basis of tech entrepreneur Andrew Yang’s presidential run. The California city of Stockton launched their program last year, and Los Angeles and Long Beach exploring their own pilot programs.

Eoin Treacy's view

Many people associate Compton with movies like Boys from the Hood or Straight Out of Compton which highlighted the city’s gang culture. Today 70% of the population is Latino and many of those people are illegal immigrants.

The $600 in additional unemployment checks benefitted citizens. Today’s strong results from Kering were on the back of a boom in sales of $600 loafers. That’s not to say that the money was all spent on extravagances but the national saving rate has surged. By contrast the millions of illegal immigrants in Los Angeles received no unemployment benefits. Businesses relying on their spending have crashed.

The universal basic income experiment is therefore aimed at providing assistance to this underserved portion of society while also attempting to improve living standards for poor people.

Arguably, the additional $600 a week in unemployment benefits has already been the largest ever experiment in universal basic income. It lasted for months and massively increased the income base for millions of people. Many people earned more from unemployment than from working. That’s universal basic income on steroids.

The big question no one has a ready answer for is what are people left behind by digitization supposed to do? The higher paying jobs in manufacturing and mining have all been outsourced or become obsolete. The technology sector has driving as a profession in its sights. That represents 3% of the total workforce but about 8% in port cities.

Just like miners did not suddenly become customer service people, the providers of low-end service work will find it hard to adjust. That suggests universal basic income is likely to remain a growing trend.

The biggest upshots of that trend are higher personal taxes which are likely to exceed 50% of income for wealthier people, closing of loopholes to avoid taxation and greater pressure on corporations. Before this occurs, we are likely to see substantially higher fiscal deficits.