Newsom UBI Plan: Expanding Government Dependency Without Increasing Economic Empowerment

Newsom UBI Plan: Expanding Government Dependency Without Increasing Economic Empowerment

By Wayne Winegarden and Tim Anaya

After hiring defeated Stockton Mayor Michael Tubbs as a special advisor and flush with a $75.7 billion budget surplus, it was probably inevitable that universal basic income would be included in Gov. Newsom’s massive billion May Revise budget proposal.

True to form, Newsom’s budget includes $35 million to help cities and counties fund their own basic income pilot programs.  Local governments would have to chip in, either through private donations or government funds from their budgets.

Of his plan, Newsom said that, “our purpose is to support those efforts, take that data, take that knowledge and make a case for expansion, contraction, or exploration.”

If the Governor read Right by the Bay, he wouldn’t need to spend $35 million to learn that basic income programs as envisioned by Tubbs simply don’t provide economic empowerment.  He’d already know that the report released earlier this year championing the “success” of Tubbs’ effort is seriously flawed.

The reality is that their approach will only leave the poorest Californians they say they wish to help stuck in poverty and more dependent on government assistance.

The plan’s goal, according to the Associated Press, “is to give poor people money each month to help ease the stresses of poverty that can make it harder to find full-time jobs and stay healthy.”

If that’s the case, Newsom should start by removing some of the restrictions that his administration has imposed on people’s ability to earn a living as they choose and climb the economic ladder.

As documented in PRI’s Breaking Down Barriers to Opportunity series, misguided laws like California’s AB 5 restrictions on gig entrepreneurship – along with occupational licensing requirements and other burdensome regulations that drive up the cost of starting and running a small business – make it difficult for many Californians to be their own boss, provide for their families, and lift themselves out of poverty.

Speaking about the plan, Tubbs told the Sacramento Bee that, “Governor Newsom is making the biggest government investment into a solution that is necessary.”

And that’s the rub.  While there may be some private investment in these pilot programs, their effort is ultimately about expanding government assistance programs rather than really helping people grow their family incomes.

Consider that families in need of income support in California already have access to cash aid and services from, among other programs, CalWORKs, Cal-Learn, LIHEAP (low-income home energy assistance program), Supplemental Security Income, and the Emergency Food Assistance Program that include:

  • Cash income
  • Childcare services
  • Food stamps
  • Free energy efficiency upgrades
  • One-time financial assistance to pay a family’s energy bill
  • Affordable housing and rental assistance programs
  • Job search services
  • Subsidized employment
  • Vocational training
  • On the job training
  • Adult basic education
  • A nonpaid welfare-to-work activity to gain work experience
  • Programs to help pregnant and parenting teens obtain a high school diploma
  • In home supportive services for the developmentally disabled (if required) that include may include housecleaning, shopping, cooking, laundry, and personal care
  • Additional income for aged, blind, or disabled persons

Proponents of the UBI are essentially saying that all these cash and in-kind services are nearly sufficient to ease the stress of poverty, all that is needed is another $500 a month. Expanding the Rube Goldberg that is California’s income support system is no way to help families obtain financial security.

As we have argued, an income-based cash system that replaces the current dysfunctional system is a beneficial reform. But that is not Tubbs’ and Newsom’s goal. Instead, their goal is to expand the government’s scope and increase people’s dependency on the government.

If pursued, the Tubbs and Newsom agenda is a path to economic stagnation and financial bankruptcy.

Dr. Wayne Winegarden is a senior fellow in business and economics at the Pacific Research Institute and director of PRI’s Center for Medical Economics and Innovation.  Tim Anaya is PRI’s senior director of communications and the director of PRI’s Sacramento office.

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