In 2021, California became the first in the nation to provide state government funds to help finance guaranteed income pilots, dedicating $35 million to be distributed by local municipalities. Key to the achievement was the former mayor of Stockton, Michael Tubbs, who is Governor Gavin Newsom’s economic mobility and opportunity advisor and a champion of guaranteed income as a means to eliminate poverty.
Tubbs’s next project will be as founder of End Poverty in California (EPIC), a new nonprofit launched today to battle generations-long wealth inequities. To do so, the new organization will need the support of elected leaders, to whom it hopes to present policy recommendations based on academic research on redistributing wealth, through policies like guaranteed income and baby bonds, and how to overhaul state systems, like the housing market and social-safety nets. The nonprofit also aims to shift harmful narratives about the roots of poverty, with hopes that, if it can close wealth gaps and lower poverty within America’s largest economy, it could form a model for other states to follow.
While serving a single term as mayor of Stockton, Tubbs instituted a first-of-its-kind guaranteed income pilot; after its success, he launched Mayors for a Guaranteed Income, a coalition of now more than 50 mayors implementing pilots in their cities. While he’s still working to transform those pilots into federal programs, he also felt his home state calling. The largest economy in the U.S. (and fifth-largest in the world were it a sovereign nation), California also has stark disparities, including the nation’s highest poverty rate and homelessness rate.“You can’t really solve poverty for this country if you don’t solve it in California,” he says.
It’s an ambitious goal, not least of all because the institutions that have caused poverty—from the labor market to the housing market to the criminal justice system—have existed and functioned in a certain way for decades. That’s why the reform of these “incredibly racist, horrifying institutions that generated these wealth gaps” should be EPIC’s starting point, says David Grusky, director of Stanford’s Center on Poverty and Inequality, who Tubbs enlisted to write a white paper as a blueprint for the nonprofit’s approach.
Grusky suggests a two-prong approach to ending poverty in California: First, overhaul those institutions. This redesign, which Grusky calls the “predistributional” stage, is essentially “mopping up all the failures” that have long pervaded. What may be attractive to lawmakers is that there are no direct costs involved, he says. “It’s just about changing the rules of the game.” It would consist of actions like empowering and protecting workers by increasing policies around leave, enacting penalties for wage theft, and empowering the right to organize; enforcing affordable housing targets by reforming zoning laws and speeding up permitting for housing developments; and regulating predatory financial services through stronger consumer protection laws and better direct access to banking services.
But that alone won’t get the job done because the institutions have favored the privileged for so long. So, in addition, he recommends a “redistributional” stage, which leverages newly created funds specifically for populations who’ve been left out of wealth generation. It could be thought of as an automatic stabilizer, especially at times of crisis—like pandemics—when institutions don’t naturally work so well. “We’ve got to administer direct relief to those deeply being harmed by our institutions,” he says.
Two solutions for wealth redistribution stand out. One is Tubbs’s forte, guaranteed income, to help close wage gaps and power imbalances between workers and employers. To Tubbs, guaranteed income on a large scale should be a federal responsibility, but because the U.S. can deficit spend, he says, the state can continue to increase eligibility and decrease requirements for earned income tax credits, which the governor has done with each budget round. It wouldn’t require the creation of new structures, but rather ensure that the right people are getting the money from existing ones.
The other supplemental mechanism could be baby bonds, where a child, upon birth, receives a sum of money placed in a savings fund managed by the state, which is then topped up every year and increases in value with interest. They claim it only when they turn 16 or 18, when “they graduate with not just a diploma, but a foundation to stand upon,” Tubbs says. While guaranteed income tackles income disparities, baby bonds address wealth disparities, leveling the playing field for people who weren’t born into opportunity. In L.A. alone, the net worth of Black households is slightly more than 1% that of white households. “There’s no way you can participate equally when some have had such a head start,” Grusky says.
While the white paper will likely form the road map for the nonprofit’s strategy, Tubbs is also keen to fill in any gaps with ideas from the community: “Talking to people who may not be professors at Stanford, but are the experts of their lives.” On an ongoing listening tour, he’s so far visited cities, including Fresno, Compton, and South L.A., where he says people got “granular” about the issues they face and how local governments could help. In addition, he wants to work with influencers and creatives to help challenge deeply held cultural myths of meritocracy, including that poverty is due to an individual’s failures, and shift those perceptions to an accurate narrative about systemic failures.
Then, of course, they’ll need the plans to actually pass, so will be rallying the support of politicians. California has the relative luxury of rather progressive leaders who, like Newsom, may be sympathetic and willing to act. “You have a lot of pieces here that make it the prime location for something as audacious as ending poverty,” Tubbs says. But he wants any success to form a model that the country rest of the country can follow, and he’s confident of his state’s influence. “When California moves,” he says, “the rest of the nation has to pay attention.”