Anyone who wants to visit former entrepreneur Kathleen O’Neill in her new home drives 90 minutes inland from San Francisco – and enters a different world. The highway becomes first four, then three, then two lanes; the green hills first turn yellow, then brown. In between, there are silos, warehouses, and fast-food chains. Eleven exits lead to Stockton; the town lies flat and stretched out, like the Central Valley itself.
Under one of the interchanges, Kathleen O’Neill lives – it’s an address she doesn’t like to give. Here, tents line the road, and boards and blankets shelter from wind and prying eyes. Smoke rises, and an old woman boils water on an open flame. Next to the camp is an overcrowded homeless shelter.
“Years ago, I would have thought, ‘Homeless people? Those are the drug addicts who let themselves go. Can’t happen to me.'” O’Neill sits on a bench, trucks filled with vegetables and commuters speeding above her toward the Bay Area and vans full of tourists heading in the opposite direction, toward Yosemite National Park. If you don’t have to take the exit toward Stockton, you don’t take it. O’Neill, however, had no choice.
The 49-year-old wouldn’t stand out in a tourist van, nor in a German supermarket. Here she does. Her blond hair slicked back in sunglasses, she looks alert and unspent. “Everyone is seven steps away from homelessness,” O’Neill says – a phrase heard often in Stockton. “My nine-year-old son and I were one food stamp away from hunger for a long time, one month’s rent away from homelessness. And yet, I was shocked and ashamed when we found ourselves on the doorstep here in August.” O’Neill grew up in the coastal city of Santa Cruz; her parents were upper middle class, she says. Her first husband was a concert pianist, and she ran a trucking company with her second.
“I always worked hard and believed it would pay off,” O’Neill says. While trying to help a patient in her job as a nurse, she suffered a severe spinal injury. Kathleen O’Neill lost her job. Her son and herself were left with food stamps and $535 a month in welfare – far too little to pay the rent in Stockton. The landlady gave them notice, and they ended up here: in Northern California’s largest homeless shelter, which is growing larger by the day.
“More and more people like Kathleen are arriving here,” says staff member Kimberly Maxwell. “Our 400 bunk beds have long been filled.” Hundreds more people sleep shoulder-to-shoulder on the floor of the day rooms. Many of the homeless, Maxwell says, leave the shelter for work in the morning, “where they no longer make enough to pay the rents in Stockton.”
Proximity to Silicon Valley hurts
Some residents call Stockton the “Far Far East Bay” – as if hoping the fame and wealth of the San Francisco Bay Area might rub off on the city. But it’s the other way around: proximity to Silicon Valley is hurting Stockton. Young IT engineers with annual incomes beyond $100,000 are driving up rents in the San Francisco Bay Area. Families and non-techies are being displaced and moving to the Central Valley – to Stockton, for example, where their commuter salaries are triggering a second wave of gentrification. Rents in Stockton are rising ten percent every year, faster than in almost any other city in the US.
Locals are ill-prepared for this: On average, everyone here earns $23,000 a year, not even half as much as the average San Francisco resident. One in six is unemployed, and one in four lives below the poverty line. Many Stocktonians, as they call themselves, still carry their debts from the financial crisis.
“Most miserable place in the U.S.”
A mile from the interchange, Mayor Michael Tubbs swings into a mahogany chair. “We don’t want to be cut off from success any longer,” he says. “For all our love of technology and efficiency, Silicon Valley shouldn’t be creating new problems.” When Tubbs was still in high school, Forbes magazine first named his hometown of Stockton the “most miserable place in the U.S.” That was 2008; the housing bubble had just burst and many homes were in foreclosure; the city’s insolvency was imminent. A decade later, Tubbs is the mayor of Stockton: the first African American on the scene and the youngest mayor of a major U.S. city. And Forbes – the magazine with the misery list – names the 27-year-old one of the 30 hopefuls under 30 in the United States.
“If someone had told me then that I would come back – and even as mayor – I would have laughed at them,” Tubbs says. “I loved my city, but I didn’t mind a long-distance relationship.” He grew up in the working-class Nightingale neighborhood; his mother was a teenager when he was young; his father was in prison.
One in 315,000
Tubbs’ story reminds people in Stockton that the American Dream still exists. Not for them, but for one of them, one in 315,000. He succeeded where few here can: Tubbs earned his master’s degree at the elite Stanford University, he interned at Google, and one at the White House under Barack Obama.
But one day in Washington, D.C., he got a call from the old country: his cousin had been killed at a party in Stockton. “When I came back for the funeral, I realized that every year, 50 other families in Stockton feel the same way we did.” Dozens of people have been murdered in Stockton every year since the 1980s, mostly young African Americans on the city’s south side. “Suddenly I realized that I should use my good fortune not just for my own career, but for something bigger.” Michael Tubbs stayed.
His ideas are as unusual as his life story. With private funding, Michael Tubbs wants to pay one hundred randomly selected families in Stockton an unconditional basic income of $500 per month starting in the fall of 2018, for three years – regardless of whether they have a job or receive welfare. His dream would be for those selected to start their own businesses in Stockton, resulting in an economic boom. Unlike social welfare in the U.S., this basic income would not be tied to certain restrictions. Anyone who wants to earn extra money would be allowed to do so without restriction.
The guilty conscience of Silicon Valley
The mayor is getting support for his idea from Silicon Valley, which is partly responsible for Stockton’s problems. “If twenty-year-olds here are making millions while people there have to go into debt despite working their whole lives, there’s something wrong with our system,” says Taylor Jo Isenberg. She is executive director of the San Francisco-based Economic Security Project, an initiative of Facebook co-founder Chris Hughes. The 34-year-old is one of the richest entrepreneurs in the U.S., with a net worth of $430 million, according to Forbes. With a small portion of his money, as well as donations from other patrons, Hughes supports a total of 35 basic income projects with a total of $10 million – he gave $1 million for the project in Stockton.
Hughes’ basic idea: Automation and globalization will lead to mass unemployment, and innovations in the field of artificial intelligence such as self-driving cars will exacerbate the development. A basic income could dampen the consequences. The project in Stockton, among others, will show whether and how it can be implemented on a larger scale.
Does a basic income make you wise or lazy?
But in the long run, can we rely on the guilty conscience of tech entrepreneurs – that they will voluntarily mitigate the consequences of their disruptive technologies? Or should IT companies be required to pay levies, Ms. Isenberg? “Sorry, we don’t have an official opinion on that.”
Not all basic incomes are the same. Proponents represent a wide variety of ideologies – from conservatives and libertarians who want to replace the existing welfare system to the left-wing spectrum that wants to finance basic income solely through additional tax revenues. Chris Hughes is among the latter. He endorses Bill Gates’ call for a robot tax; through it, companies that replace workers with robots would pay compensation to the state for the lost jobs. However, this approach is also controversial: Critics argue that social inequality could be combated more effectively if the money were put into expanding the existing social system to reach the needy in a targeted way and avoid inflation.
But what does $500 really matter in the lives of those in need? Do they know what’s best for them or do they need rules and guidance? And does the money really lead to more entrepreneurship, or are the lucky ones lying down?
Benjamin Saffold, who worked for years at Kathleen O’Neill’s homeless shelter under the interchange, is skeptical: “For many residents there, an unconditional basic income without counseling would be a bad idea. Those who are addicted to drugs will spend it on more drugs. Others simply haven’t learned to manage money properly.” Mayor Tubbs counters, “Our project is designed to show that most people make wise choices when given a chance.”
Stocktonians aren’t prone to complaining
In Stockton, experts on these issues live where Mayor Michael Tubbs grew up: driving down Dr. Martin Luther King Boulevard and turning onto Mariposa Road, you enter the working-class neighborhood of Nightingale. The farther north and west you go, the richer and whiter Stockton becomes – Nightingale is at the opposite end of town, all the way to the southeast. Construction fences screen off every shack, no matter how small. The radio plays ads for agencies that improve credit lines or paychecks before they are issued – services for the desperate, at horrendous fees. The streets are empty, with only the occasional person coming out of the laundromat and the Family Dollar store.
“Five hundred dollars? Every month? For three years? Woaaah!” Charles George pushes his bike down the sidewalk. He seems glad to have found someone to talk to in the urban wasteland. “Then I’d have to do some serious scouting to see who needed the money the most. Like Santa Claus, I’d show up at their house and be a blessing to them.”
– “Charles, the Silicon Valley sponsors think they’ve already found the people who need the money most: all of you here in Stockton. What would you do with the money yourself?”
– “Pfff, I’m surviving.”
Yet George could use the money: The 62-year-old lives on welfare and barely gets by. A neighbor and her nephew walk past him: what would they do with $500? She would buy shoes for her nieces and nephews, says the neighbor. The boy would like “furniture so I can sit down at home.”
And the other 314,900 residents?
“So much fuss about a project that supports 100 people in a city of 315,000,” says Benjamin Saffold. The 52-year-old considers himself an activist who monitors local politics and demands accountability. Mayor Tubbs’ basic income is “like trying to quench the thirst of a thousand people in the desert with half a glass of water,” he says. But it doesn’t change the big problems in Stockton, poor pay, high rents, drug addiction, and gun violence, he says.
He likes Michael Tubbs a lot, Saffold hurries to say as he saunters toward City Hall. He is a member of the same church congregation as his family, he says and has known him since he was a child. But he worries that Tubbs merely wants to use the three-year project as a poster child for himself to continue his career. “At the end of his tenure, Stockton will be left high and dry, with no follow-up project or lasting benefit.”
Saffold is not alone in his criticism. The former vice mayor, Councilwoman Christina Fugazi, laments the mayor’s high spending while also keeping a library closed in the city’s poor east side to cut costs and cutting a support program for disadvantaged youth.
Anyone with a job is already considered “middle class”
But Stocktonians are not inclined to lament. Anyone who has a job (however modest) and a roof over their head (however small) already considers herself middle class. Yet many of the workers are desperately poor. “One of the main problems is the big boxes,” says Serena Williams. That’s what she calls the fast-food and chain stores that employ workers at the local minimum wage of $10.50 (8.90 euros) – almost exclusively part-time and with shifts so irregular and scheduled at short notice that they are difficult to reconcile with a second job or family life.
For someone like Williams, who used to work 25 hours a week, that brings her gross to just over $1,000; even the rent for her one-bedroom apartment costs more. At 36, Williams therefore still has to be supported by her mother, with whom her two children also live, because her apartment is so tiny.
Williams would use the basic income to finish her studies, which she dropped out of for lack of money, and to start an art center for young people. But money alone won’t fix poverty, she believes: it’s passed down through generations. It grieves Williams that there’s so much she can’t offer her children, either – no father, little time, and no home together. When her daughter was 14, she belted out to her, “I never want to be like you!” Serena Williams just smiled tiredly. “Good, at least I’ll have accomplished something.”
Kathleen O’Neill also hopes to one day be able to offer her son a home again – whether through a more generous welfare system, a higher minimum wage, lower rents, or a basic income. But she realizes that her chances of being selected for the mayor’s project are little better than winning the lottery.