Y Combinator Plans to Start Dolling Out £46 Million Next Year to Study Universal Basic Income

By Jennings Brown on at

The research arm of Y Combinator plans to begin a study on universal basic income next year in which it will give unconditional cash payments to 3,000 participants. The test is partially intended to see if receiving routine payments will quell anxieties around losing jobs to automation.

As Wired reports, the study will be called “Making Ends Meet.” Under the plan, a thousand people would get $1,000 (around £780) per month and the other 2,000 would get $50 (£38) per month to serve as a control group. Some of the participants would receive monthly payments for three years and some would get paid every month for five years.

Sam Altman, CEO of Y Combinator, a highly successful startup accelerator that helped give rise to companies like Dropbox, Airbnb, and Reddit, announced the company’s plans to research universal basic income — or as he put it, “giving people enough money to live on with no strings attached” — in a January 2016 blog post. Altman explained his belief that universal basic income will eventually be implemented across the nation as more jobs are automated and “massive new wealth gets created.”

Altman further wrote that he hoped a study would help answer some “theoretical questions” about what happens when people are given basic income, like: “Do people sit around and play video games, or do they create new things? Are people happy and fulfilled? Do people, without the fear of not being able to eat, accomplish far more and benefit society far more? And do recipients, on the whole, create more economic value than they receive?”

It’s taking a while to answer those questions, which have continued to percolate higher into the U.S. political sphere as wealth inequality has risen to levels not seen since the late 1920s. Three years after Altman asked for applications to run that project, Elizabeth Rhodes, project director of Y Combinator’s research branch, YC Research, told Wired the nonprofit group is beginning the study on basic income next year, after a pilot programme in Oakland took longer than expected. Wired also acquired an email Rhodes wrote to Oakland Mayor Libby Schaaf about the programme, through a public-records request. In the email, Rhodes reportedly wrote of the pilot programme: “Although it’s frustrating for funders, it has been good from a research standpoint.”

Rhodes told Wired that the pilot process was hindered because research ran into unexpected complications like having to get approval from university review boards and state agencies and making sure the IRS didn’t revoke existing benefits from participants who received the additional income. “It’s harder to give away money than you might think, but we’re being very intentional about making sure to work through all the challenges and think through every possible angle before we start, to be as responsible as possible,” Rhodes told Wired.

YC Research made an agreement in April with University of Michigan’s Survey Research Centre to help with the study, Rhodes told Wired. The nonprofit plans to decide on a location for the study next month. The study will reportedly cover a region, spanning two states — and it will not cover Oakland.

The University of Michigan and Y Combinator did not yet respond to Gizmodo’s requests for comment.

Y Combinator expects to spend $60 million (around £46 million) on the study, according to the Wired report. About 75 per cent of that money would go to paying participants. Rhodes told Wired that the nonprofit is trying to secure funds from foundations, local philanthropy organisations, and individuals.

This isn’t the first study of its kind in the U.S. Another basic income study, partially funded by Facebook co-founder Chris Hughes, will soon take place in Stockton, California. The city released a report last week explaining its plan to randomly select 100 low-income families to which it will send monthly payments of $500 (£388) for 18 months. The lucky residents will receive notice that they’ve been selected in November. [Wired]

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