FROZEN ASSETS
ON A GRAY AFTERNOON in Juneau, 36-year-old Kristen Hemlock sat on her bed picking at a cold McDonald’s chicken sandwich, waiting for the checks to arrive. Her four-year-old son, Eli, chubby and dimpled, lay on his stomach on a bottom bunk two feet away, distracting himself with YouTube cartoons. Six-year-old Mason wasn’t home from school yet, permitting a fleeting truce in the brothers’ perennial war over her phone. In a home the size of a dorm room, it was a more reliable source of entertainment than their toy trucks and guns. Broken drawers spilled out of a chipped wicker dresser, and fleece blankets, one patterned with the phrase “I love you to the moon and back,” blocked light from the lone window.
The boys’ father, 35-year-old Daniel Varner, sat at a tiny table in khaki overalls and work boots, jiggling his leg.
“It’s delivery mail, isn’t it?” he asked Hemlock.
“Yeah, so it might be tomorrow.”
“Oh yeah, it’s not coming. I was thinking post office box.”
“It could.” Hemlock emitted the nervous laugh she reserves for her saddest stories. “I’m hopeful.”
Most of the family’s 52 neighbors at St. Vincent de Paul Society’s transitional housing shelter, a faded blue building on the outskirts of town, were also waiting for money.
It was October 4, and pretty much everyone in Alaska was expecting it, with varying degrees of impatience—$1,600 for every man, woman, and child. For nearly four decades, the Permanent Fund Dividend (pfd) program, designed to share revenue from the state’s oil wealth, has made flat annual payouts to anyone who has lived there for at least one calendar year, barring those with certain criminal convictions. While the program’s architects didn’t use the term, it’s the closest thing today to a universal basic income program that has durably existed anywhere in the world.
The concept of universal basic income—in which governments pay residents a set sum regularly, no strings attached—has gained momentum in recent years. A growing chorus of Silicon Valley executives has called the policy inevitable, as automation threatens to displace one-third of American workers by 2030, raising the specter of unemployed masses rioting in the streets. Others have revived the idea as an efficient solution to poverty and inequality. Y Combinator, the tech startup accelerator, will soon test basic income with 3,000 people in two states, following a smaller study in Oakland, California. The city of Stockton, California, will launch a guaranteed income pilot in 2019, and lawmakers in Hawaii and Chicago are considering following suit. Trials have also launched in Barcelona, Canada, Finland, Kenya, Uganda, and Switzerland. In the United States, the concept is inching its way into the mainstream; Hillary Clinton’s campaign memoir disclosed she seriously considered floating a universal basic income program called “Alaska for America” during her 2016 run.
Inadvertently, red-leaning and fiercely independent Alaska has become a global model for advocates of doling out “free money.” Aftermeting oil revenue has left the resource-dependent state—the only one with no sales or personal income tax—with multibillion-dollar deficits. Even after dramatic spending cuts, savings reserves are dwindling. The local GOP establishment, with backing from wealthy corporate interests, has blocked virtually all attempts to generate new revenue through taxes. With money running out, elected officials have slashed annual checks in half, despite their popularity. In May, lawmakers voted for the first time to divert $1.7 billion away from dividends to pay directly for government spending. While imposing income taxes would affect the richest Alaskans most, smaller dividend checks, and the program’s uncertain future, are hitting low-income families hardest.
