Income experiment advances

A new study from the National Bureau of Economic Research takes a different approach to evaluating universal basic income (UBI). The economists reviewed lottery winners over a five-year period. Lottery winners are a good test for UBI because lottery winnings are large enough that the income they generate can be life-changing. Courtesy of Tribune News Service

HUDSON — In the wake of a successful first experiment with universal basic income, HudsonUP is expanding and offering $500 of unrestricted cash per month to 50 additional Hudson residents.

Residents who apply are entered into a weighted lottery and the winners are notified the first week of October. The lottery process is weighted for equity of race and gender, and residents 18 and older can enter if they earn less than the annual median income of $39,346.

The first cohort consisted of 25 residents, and the addition of the second group brings the total number of selected residents to more than 1% of the city’s population, according to a statement from the city. The lottery is open until Sept. 30.

The lottery is run by an independent research team at Washington University in St. Louis.

Hudson Mayor Kamal Johnson serves as a member of the pilot program’s Community Advisory Board.

“The HudsonUP Pilot was launched as an investment in the community,” Johnson said. “I’m extremely excited that this investment will benefit more of our community at a time when people really need a helping hand.”

HudsonUP is a basic income pilot created by The Spark of Hudson and Humanity Forward, and by providing unconditional, regular payments to selected residents, the pilot will provide research and insight into the effects of a universal basic income, according to HudsonUP’s website.

According to the pilot’s website, the concept of a universal basic income was created in response to technology.

“The existing social system was created in the industrial age, which was built on the need for lots of human labor. Thanks to digital technology, we now have intelligent machines, which make it possible for humans to have more time for activities that let us be truly human, such as creating art and music, conducting scientific research, spending time with friends and family, enjoying and taking care of nature, and so much more. UBI frees people to decide what they want to work on (that, of course, includes making more money if they want to),” according to the website.

HudsonUP pilot director Joan Hunt said the early findings of the first cohort indicated a positive impact.

“Some of the early findings that we’ve discovered through our very qualitative research process is that folks are just feeling an immense relief of stress and worry, as it pertains to making bills month to month and being able to afford little luxuries or gifts for their children or just little things that folks before had to kind of prioritize in a really devastating ways,” Hunt said.

As each cohort is a five-year program, Hunt said in the future the program hopes to see more financial planning and saving from participants.

“Folks just feeling more optimistic about whether it’s saving or paying off debt, or going back to school, starting a business, those have come up as well,” Hunt said. “And I think as folks kind of settle in more and are able to maybe pay down some of their debt or get a better job because they’re less worried about maybe missing a day at work and getting fired because they’re trying to pursue a better opportunity,” she said.

Data from participants are collected on a voluntary basis, Hunt said. Fifteen of the 25 selected cohort members voluntarily and anonymously provide information for the research.

For reporting from the second cohort, participants will have three options: anonymous reporting, telling their story about their experience in the program or not reporting, Hunt said.

Those entering must be residents of Hudson and people who applied for the first cohort but were not selected are welcome to apply to the second, she said. The first group was funded by the Humanity Forward Foundation — former presidential candidate Andrew Yang’s organization — and the Utopia Foundation, while the second is funded by Utopia.

“Receiving a form of UBI allows you to begin making meaningful, long-term plans. It allows one to think beyond next month’s bills; through the HudsonUP project, we’re going to see families benefit enormously from receiving $500 a month for five years,” Yang said in a statement.

In the future, Hunt said she hopes research in the smaller community of Hudson could lead to a national form of universal basic income. Hunt, who said she has been working in nonprofits since 2006, called the program unique.

“I’ve never seen something that is just so directly meeting the needs of people that are struggling and struggling is all relative, right? We’re not only talking about people here in abject poverty, we’re talking below the median income, right?” Hunt said. “I think what we’re hoping to do here with this, and to show was that everyone’s kind of struggling differently.”

Hudson residents interested in entering may apply at www.hudsonup.org/thepilot.

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