Direct checks caught support on a national stage. Can cities use them to abolish poverty?

How do you end poverty and rebalance the structural economic inequality that resulted from decades of racist policies?

It’s a big question, but in recent years there has been more interest in a solution that doesn’t take many words to explain: Provide regular, direct cash payments to residents. No strings attached.

The idea has surfaced on the national stage in recent years. But as with many policy plans, it may be the local level that proves it out. One sign of that was evident in Baltimore this week, when Mayor Brandon Scott announced that he was joining Mayors for a Guaranteed Income.

With this, Scott said Baltimore will pursue a pilot for direct-cash payments in the fall, following on similar moves in 11 other cities. Details are still being worked out, as a steering committee led by OSI-Baltimore Director Danielle Torain and Center for Urban Families CEO Joe Jones is guiding the program’s development. And it seems likely to be a small group for learning, as those other cities have provided payments to 100 to 200 households and raised philanthropic funds.

Yet, as any entrepreneur can tell you, such small tests are what can lead to something taking hold at scale.

The local approach might also help to ground a policy idea that has had a variety of origins on the national stage. Universal basic income, or “UBI,” gained favor among venture capitalists and startup leaders in Silicon Valley over the latter half of the last decade. In the 2020 Democratic presidential primary, then-candidate Andrew Yang brought it to the forefront of national politics with the idea of a $1,000-a-month “tech check” that could help to offset the effects of the coming wave of automation.

The mayors’ push — which uses the verbiage of “guaranteed” income rather than UBI — goes back decades. The guaranteed income was supported by Dr. Martin Luther King, Jr., who wrote in 1967 that when it comes to abolishing poverty, “the simplest approach will prove to be the most effective.”

It's cities where the plans can be put to tests and data can be collected to see whether they were effective.

King’s advocacy is a direct link to the push from Mayors for a Guaranteed Income, which cites his statement prominently on its website. It frames the debate as not just about economics, but also in drawing a line to provide support for the most likely groups to live in poverty: women and people of color.

“Baltimore is the birthplace of redlining and residential segregation. That legacy shows up in the stark inequalities of our city today, which have been exacerbated by this pandemic,” Scott said in a statement announcing the move. “To ensure the economic security and dignity of our residents, we must be willing to invest in bold solutions.”

When it comes to societal shifts that paved the way for these signs of acceptance, the pandemic is also a prime reason. When March 2020 shutdowns meant to stop the spread of COVID-19 left millions out of work, the idea of a government providing direct payments to its citizenry was not only mainstreamed in a matter of days, but enacted. The CARES Act included $1,200 direct payments, and they’ve been a part of every aid bill since. These are one-time payments, but growing calls for bigger and more frequent checks signify more recent political staying power for direct checks than there was pre-COVID.

Convincing a wider base of national policymakers and economists, however, still seems likely to take time. The relief bills in Congress have been met with opposition to spending, and rhetoric that demands policy that ties a paycheck to work. It echoes the welfare reform debate of the 1990s.

This will play out on the local stage as well. This was evident in a piece from local TV news outlet Fox45, which got reaction to Scott’s announcement from the conservative Heritage Foundation and the National Taxpayers Union. Heritage’s Joel Griffith told the station that “starting another welfare program and giving funds to people simply for existing, is not going to help them with their self-worth or propel them out of poverty.”

Yet it’s also in cities where the plans can be put to tests and data can be collected to see whether they were effective. And while the idea of “universal” was a hallmark of the national debate, the path to bringing it to fruition appears to lie in starting with those who are in the deepest poverty. The mayors’ group wants to take up this work. But it doesn’t hide the idea that this is all toward influencing national policy, as well.

“I look forward to measuring the impact of this pilot program in Baltimore and joining other cities to build the case for federal policies that put more money into low-income households through guaranteed income,” Scott said.

For more evidence, just look at Yang. Once a presidential candidate, now he is making basic income the centerpiece of his campaign for New York City mayor.