News for the East Bay's diverse, working-class majority.

Brought to you by the Democratic Socialists of America, East Bay chapter.

East Bay DSA

March 31, 2021

Libby and her billionaire friends are the problem, not the solution

By Nick French

On Tuesday, March 23, Oakland Mayor Libby Schaaf announced that the city would be piloting a guaranteed income program. Oakland will randomly select 600 low-income residents who are Black, Indigenous, or people of color to receive $500 a month, for at least 18 months, and recipients can use the money however they want without oversight. Schaaf is pitching the program as a “transformative policy” that will close the city’s racial wealth gap.

Unconditional cash transfers to low-income people? Tackling racial inequality? What’s not to love?

But a closer look shows that Libby’s proposal is not worth celebrating. In fact, the program is just the latest attempt by billionaires to privatize government services and destroy the welfare state — and it’s funded by many of the ultrarich bosses who have driven millions into poverty in Oakland and across the country.

Billionaires against poverty?

The cash transfer program is being funded by private donations, in partnership with the Family Independence Initiative (FII) and Mayors for a Guaranteed Income. 

FII is an Oakland-based nonprofit that says that it is “championing a community-led revolution to boost and sustain economic and social mobility for the millions of Americans who live at or below the poverty line.” Oddly, the organization boosting this “community-led revolution” is funded by rightwing billionaires and rapacious tech firms. Last spring, FII raised $38.7 million for its Covid-19 relief fund from sources like the Koch family (yes, that Koch family), Google’s philanthropic arm, the Schultz Family Foundation, and the DeVos Family Foundation (yes, that DeVos family).

The millions they gave to the Covid relief fund is pocket change compared to the billions they’re sitting on, and to the billions they’ve spent on projects to redistribute power and resources from the working class to themselves and their friends. 

The Kochs (especially Charles and his late brother David) have spent obscene amounts of cash to stop people from getting healthcare, battling workplace safety and environmental regulations, and spreading climate change denialism. And that’s only to scratch the surface of their greatest hits, which also includes a decades-long war on labor unions

The DeVoses have also been huge financial backers of right-wing causes. They have a particular interest in education: the DeVos Family Foundation has spent tens of millions of dollars promoting charter schools and school voucher programs in an effort to privatize public schools, a vision that Betsy DeVos dutifully carried on as Trump’s Secretary of Education. DeVos’ involvement in the guaranteed income program is especially ironic, given that Oakland families have been among those most harmed by the charter-ification and closures of public schools which destroy working-class neighborhoods and lead to worse outcomes for students.

Meanwhile, the organization Mayors for a Guaranteed Income received a $15 million grant from Twitter CEO Jack Dorsey. Dorsey has consistently fought paying his fair share in taxes to the city of San Francisco, even as the tech boom which has made him billions has driven up rents and the cost of living and exacerbated the city’s crisis of houselessness.

We could go on, but you get the idea: many of the folks backing FII and MGI are directly responsible for the widespread immiseration that makes people need cash assistance in the first place.

The philanthropy racket

According to the Economic Policy Institute, between 1979 and 2017, worker productivity (the value of the goods and services workers produce per hour) jumped 69.6% while the hourly wages workers received for this work increased by just 11.6%.

So who is gaining from this massive increase in productivity? The Kochs, the DeVoses, and all their super-rich friends. Since 1979, the top 1% of income earners have doubled their share of overall income, returning the US to levels of inequality not seen since the Gilded Age. This huge transfer of wealth from working people to billionaires has gone hand-in-hand with assaults on labor unions, the cutting of aid and opportunities for the poor, and the slashing of taxes on the rich.

So what should we make of the newfound generosity of the wealthy FII backers? Are they turning over a new leaf, deciding it’s finally time to help the people they’ve spent their lives pushing into poverty?

FII presents itself as “disrupting” traditional antipoverty nonprofits. The truth is that, like a lot of billionaire-funded “charity,” the cash transfer program is meant to undermine and replace public assistance programs. Public welfare programs are funded by taxes on the corporations and the rich, and they are democratically accountable to the public. Strong welfare programs empower working people, by letting them know they’ll still have a house, healthcare, and money for bills if they want to leave bad jobs or bad relationships. This sucks for billionaires for two reasons: the welfare programs make it harder for billionaires to squeeze their workers, and (to add insult to injury) they have to foot the bill for the programs through taxes.

The Kochs and their friends don’t want to pay taxes, and they want to make sure they control who gets assistance and how much of it. This plan is just part of their bigger agenda of destroying the welfare state and taking control of public functions (like education, utilities, and public transit). The end goal is lowering their taxes and taking power and resources away from workers, all while looking like generous philanthropists.

Building solidarity — or sparking resentment?

It’s also worth noting that Libby’s income proposal gives checks only to families of color who have at least one child under 18, and who make the area’s median income or less (about $59,000 per year).

On its face, targeting payments in this way seems fair — aid should go to people who have been most socially and economically disadvantaged in our society, who are more likely to be people of color. For example, the legacy of slavery, redlining, Jim Crow, and mass incarceration have disproportionately impoverished generations of black people, and this disparity must be addressed as part of any real platform for economic justice.

But in practice, welfare programs which are targeted to specific groups tend to increase stigma toward beneficiaries, and inspire apathy at best and resentment at worst among people who are left out. That means when benefits go on the chopping block, or philanthropists move on to their next big idea, there won’t be widespread mobilization to defend the benefits. 

And because of the red tape that potential recipients must navigate to prove they qualify, many people who are eligible don’t end up receiving benefits. According to Matt Bruenig of the People’s Policy Project, about one in five eligible recipients don’t get benefits they are owed by the state. For all of these reasons, these “means-tested” welfare policies make easy targets for conservative politicians to cut or scrap entirely.

By contrast, universal welfare programs that include everyone are strong in all the ways that means-tested programs are weak. These programs, like Social Security in the US, make benefits far easier to access, and they create bonds of shared interests and a sense of the common good among those who benefit. Social scientists have even found that universal programs increase recipients’ involvement in political and social life (while means-tested programs do the opposite).

The result is that these programs are much more popular and harder to cut. Just look at Social Security and Medicare, two universal programs which have been extremely popular and hard for right-wing politicians to attack. Federal assistance targeted to low-income people, on the other hand, is stigmatized and has faced severe cuts.

Universal programs like tuition-free college and Medicare for All would benefit millions and be funded by taxes on the same billionaires trying to buy goodwill with a handful of $500 payments. Unlike this “pilot program,” they could not be halted at the whim of a few rich people; they would end poverty and close racial wealth gaps for generations to come. 

Worker power, not billionaires’ crumbs

With the pandemic squeezing working people harder than ever, any kind of direct cash relief is welcome. We should have been paying everyone $2000 a month, as Bernie Sanders (and even Kamala Harris!) proposed at the beginning of the pandemic. But we should see Libby’s scheme for what it is: an attempt to let the ultrarich off the hook for the misery they’ve created, and to give them even greater power over our lives.

If we really want to get rid of poverty and racial injustice, we need to demand more. We need living wages and dignity at work, fully-funded and equitable public education, a green jobs program to rapidly decarbonize our economy, guaranteed healthcare and housing for all — funded by taxes on the Kochs and DeVoses of our country and democratically administered by working people.