Finnish basic income
© Kimmo Brandt/EPAClients in an office of Finnish social security agency Kela, early 2017, just after the start of the nation’s now-ended basic income experiment.
Cities around the world are experimenting with basic income schemes. The benefits for residents seem obvious - but what's in it for the cities?

For the first time in many years, Lance Dingman has food in his freezer.

Dingman, from Hamilton in Ontario, Canada, lost one of his legs in 1988 as a result of a bone infection and now has a prosthetic; he has also struggled with his mental health. He used to receive a disability benefit, but the amount was so low as to leave him no way out of poverty. Today Dingman, 56, is paid C$1,900 (£1,080) per month under the city's basic income pilot project - and he says the difference is life-changing.

"I've been able to plan ahead, especially for food," he says. "My overall health has improved because my diet is better. I can also afford hygiene products - which was very difficult before."

Most significant of all is the impact on his confidence. "Basic income has given me freedom to live with some dignity with a little extra money to buy the essentials in life," says Dingman. "I want to make the most of this opportunity and work up to a full-time job eventually ... I feel much more in control of my own life."

Hamilton, a city of about 551,000 people, is now a third of the way through its three-year experiment with a universal basic income (UBI) scheme. Funded by the provincial government, the pilot is testing whether a basic income of up to C$17,000 for all 1,000 participating individuals - plus a C$6,000 supplement for those with a disability - is more effective in reducing poverty than its existing social security system.

Hamilton Ontario Canada
© Alamy Stock PhotoHamilton, Ontario, Canada
The basic income model offers double the amount that is standard for welfare in Ontario, and Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, says it has already started to yield positive results, with the most important being a "restoration of dignity".

"People who are participating in the basic income pilot seem to have a renewed sense of hope and are beginning to dream about their futures," he says. "Personally, I believe basic income will become the preeminent social policy imperative of the 21st century."

Cities the world over are experimenting with basic income, with supporters arguing that it would help to alleviate inequality in society and give people a social financial foundation in an uncertain future. "Universal income will be necessary over time if AI takes over most human jobs," Elon Musk tweeted two weeks ago. Jeremy Corbyn, Bernie Sanders, Mark Zuckerberg and the Nobel prize-winning economist Angus Deaton are also in favour.

The benefits of money for nothing for residents seem obvious - but what are the benefits for cities?

The first such scheme to be tested by an urban authority in Europe is Barcelona's B-Mincome. Launched in October 2017, it is funded by the city council and a grant provided by the European Commission programme Urban Innovative Actions. The two-year pilot guarantees 1,000 households in the district of Besos, the city's poorest area, income supplements of between €100 (£88) and €1,676 per month.

Around 900 of the families are also participating in "social economy" projects relating to employment, housing and community action to inform analysis of the neighbourhoods and their openness to creative solutions to poverty, such as time banks in which participants trade their abilities and time instead of money.

Barcelona Spain
© Rocky89/Getty ImagesBarcelona, which launched its B-Mincome scheme in October 2017.
"We need to look at how we can better mobilise the community to help tackle poverty in cities, because public policies in the traditional way of the welfare state are not working," says Fernando Barreiro, project manager for B-Mincome.

One of the criticisms often heard of "free money" schemes is that they create a dependency class. The Hamilton pilot will evaluate whether participants' physical and mental health improve with income security, and if they are able to maintain housing and stay engaged in work.

However, Jim Pugh, co-founder of the Universal Income Project, says many studies have shown that very few people receiving basic income drop out of the workforce.

"Some experiments have even found that basic income increases entrepreneurship, which would ultimately lead to more employment down the road," says Pugh. "The truth is that most people want to contribute to society. If we can provide them with basic financial security, they'll find a way to do it."

Stockton California
© Justin Sullivan/Getty ImagesStockton, California will use philanthropic donations to fund a basic income of $500 a month for about 100 families.
Next year Stockton in California will become the first US city to guarantee a basic income for some of its poorest residents, with about 100 families to receive US$500 (£377) a month - funded by philanthropic donors - for a 12- to 18-month period.

"When nearly half of Americans can't come up with $400 in case of an emergency, I think it's likely this scheme will have a significant impact on recipients," says Lori Ospina, the scheme's director. "We think the current economic situation requires effective and innovative solutions and hope other city leaders will pursue measures that go beyond the status quo. This is hopefully just the start of a much larger national conversation."

Macau is ahead of the trend, having provided all residents with a small annual basic income since 2008. Permanent residents receive 9,000 patacas (£840), funded by huge profits from the city's casino taxes. Nonpermanent residents receive about half that amount.

This year Macau's government has announced it will spend a total of $1.61bn on public subsidies. But views on the so-called wealth partaking scheme are not as positive as you might expect, with critics saying that the payout would need to be larger and more frequent for it to have any real chance of lifting residents out of poverty.

For resident Stephanie Chan, 31, the payout is "just a little bit of extra cash" she might spend on travel or shopping: "For some poorer residents, they might find the money helps towards their rent. "Generally though, I think most residents would prefer the government to spend the money in more useful ways, like building more hospitals and housing or improving the city's infrastructure - rather than just giving us the money."

© Kimmo Brandt/EPAFinland ended its UBI trial after two years, which supports said was too short a period from which to draw extensive conclusions.
Bruce Kam-Kwan Kwong, assistant professor of public administration at the University of Macau, doubts that the scheme exists simply to share the fruits of economic growth. "The major aim is to pacify people's grievances towards the government's ill administration. It was a [painkiller for] the community after a series of anti-government demonstrations."

Kwong says it served to boost positive sentiment for its first two years but became less effective from 2010. Now he and other critics of the policy believe the government dares not give up the policy for fear of protests.

Even those who support the good intentions and bold design of UBI schemes have questioned their sustainability in the long term. In April Finland made headlines for concluding its basic income trial after two years, though this was influenced by a looming national election in early 2019.

But the criticism that basic income would dismantle the welfare state is "rubbish", says Guy Standing, founder and co-president of the Basic Income Earth Network. He is in favour of maintaining benefits for the most vulnerable people in society even with basic income, and has no doubt that it is affordable.

"There is no reason why a city or country could not afford to have a basic income for everybody," says Standing. "In Britain, tax reliefs for the wealthy and corporations come to about £400bn a year - this by itself could be used to pay for a basic income for everybody.

"It's not something that is unaffordable - it's a matter of priorities."