A Five-Year Basic Income Experiment Is Happening in the U.S.

A thousand people will receive $1,000 a month for up to five years.

Unsplash / Brandon Jacoby

Y Combinator, the Silicon Valley technology startup incubator that’s that offered early funding for Airbnb, Reddit, Genius, Twitch, and Dropbox, among others, has its eyes on backing an even bigger potential disruption: basic income.

This week, the company announced that its year-long feasibility study on basic income, using a few dozen people in Oakland, California, has come to an end. Its next logical step is altogether more ambitious: a randomized, controlled trial, with participants spread across two as-yet-unannounced U.S. states.

In the upcoming study, 3,000 people whose median household income is below the average income in that county will be selected from the two states to receive a fixed monthly sum. These people, aged between 21 and 40, will be chosen to represent a variety of demographics and income levels. While 1,000 of these people will receive $1,000 per month for up to five years, the other 2,000 will receive just $50 per month as a way for the researchers to compare.

“A randomized trial is considered one of the best ways to evaluate the impact of a proposed social policy,” writes Elizabeth Rhodes, who holds the enviable title of basic income research director at Y Combinator. “By comparing a group of people who receive a basic income to an otherwise identical group of people who do not, we can isolate and quantify the effects of a basic income.”

Basic income is the idea that every person should receive a regular stipend from an organization — ideally a level of government so there’s a shared burden or possibly private organizations like Y Combinator — as a method to supplement their income. Its advocates say it would create a safety net or cushion for people to become more entrepreneurial or take innovative risks. Supporters have a variety of reasons for the idea. Facebook founder Mark Zuckerberg made the “cushion” argument in a commencement address at Harvard earlier this year. SpaceX and Tesla founder Elon Musk, heavily involved in automation and artificial intelligence, has said basic income is an inevitability as more jobs that are done by humans today will be taken on by A.I. or robots in the future.

Robots assembling a Tesla Model S at the automaker's plant in California. As automation of tasks continues, many business leaders at the forefront of technology are calling for basic income. They forecast a massive economic disruption as people lose their jobs to machines.

Flickr / jurvetson

For his part, Sam Altman, the 32-year-old president of Y Combinator, said in an interview with CNBC that eliminating poverty was a “moral imperative,” and explained how basic income could help remove this “emotional and physical toll.”

At its core, basic income is a matter of equality, Altman argued on his Twitter account in 2016.

In a world where technology eliminates jobs, it will mean that the cost of having a great life goes down a lot. We’ll be able to afford to eliminate poverty in that world. But without something like basic income, I don’t think we can really have equality of opportunity. And I think we need something like basic income to have a cushion and a smooth transition to the jobs of the future.

The San Francisco–Oakland Bay Bridge

Unsplash / Josh Bean

The Oakland experiment saw between 30 to 50 resident receive around $1,500 to $2,000 per month. This, by the incubator’s own admission, was too small a sample size to come to any real conclusions. Instead, the test was aimed at understanding the challenges the team would face with a larger trial.

What’s Next

The research team at Y Combinator will work with government agencies to access administrative data while taking surveys at the start and end of the project. This data will help build a picture of how people spend money, the decisions they face, and solutions that could help alleviate some daily concerns, even if those solutions are something other than a basic income.

“We look forward to sharing more news about our progress in the coming months,” Rhodes writes.

The results of the trial could prove fascinating. Participants may choose to take a job they enjoy more without worrying as much about salary or use the extra money to improve their well-being or change their financial decision-making without the burden of scarcity.

“Of course, no single study can answer all questions about basic income, and every program has an array of positive and negative effects,” Rhodes writes. “Nonetheless, we view this experiment as a strong foundation for a broad research agenda on basic income.”

If you liked this article, check out this video on how we’re going to need basic income, thanks to robots.

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