Extreme Poverty in New York City is Solvable

begin with, things maybe even worse. If a family winds up in our shelter system, we are spending six thousand dollars per month on that family, And so if you spend a fraction of that keeping someone in their home and they don't wind up in our shelter system, it's actually a win. Andrew Yang became a household name running for president on a platform of a guaranteed income for everyone. Now he's running for mayor of New York City, and his message is similar. He wants to get cash into

the hands of people who need it urgently. Eleven US cities have committed to versions of cash assistance programs or guaranteed income, including Stockton, California, Hudson, New York, Saint Paul, and Pittsburgh. Eighty five percent of Americans are for a cash relief during the pandemic, and fifty five percent are for an in perpetuity. Is this another example of something where you just have to invent a local version of

it because the more rationalized national solution isn't available to you. Well, you said it, I didn't, Jacob. New York is a city with over eight million people. If something works here, it could work anywhere. Yang's plan could provide a powerful case study for the rest of the country. I'm Andrew Yang, and my solvable is extreme poverty in New York City. We can solve it, we can eradicate it. Andrew Yang is pushing for a new kind of universal basic income.

This time it's targeted, which is an oxymoron. How can you support something universally but deliver it selectively. I started by asking him to explain how something like UBI could work in New York City. So you do have to

draw lines and parameters. You know, it's not feasible for us to give all eight point three million New Yorkers a certain amount of cash, So we are targeting the half a million New Yorkers who are in extreme poverty, and our goal is to lift them up so that they have at least a certain baseline level of resources. It's more of a guaranteed minimum income in New York City than it is a universal basic income that we're looking to implement. And where do you set the baseline?

What would be the monthly payment to someone now in extreme poverty in New York City. So the monthly payment to get the five hundred thousand porous New Yorkers out of extreme poverty averages out to two thousand dollars per person per year. So we're pledging one billion dollars per year to alleviate extreme poverty in New York City. And just in terms of the numbers, can two thousand dollars

really lift someone out of poverty? That doesn't sound like a lot of money, especially in New York spread over a year. Well, extreme poverty is defined as half the poverty level, and so you have people that are making five, eight ten thousand dollars a year that two thousand dollars a year would be an extraordinary boost for them. And the two thousand dollars is an average level. Some will get one, some will get three. It pushes them to a level where they're very very basic needs have a

higher chance of being met. But we have a comprehensive anti poverty agenda to supplement this cash relief. If you look at the population who struggling with poverty in New York City, it overlaps very heavily with the twelve percent of New York City residents who are unbanked. And a lot of this population is undocumented where they're scared to try and access basic financial services because they're afraid that

they'll get targeted in some way. So right now they're spending hundreds of dollars a year that they don't have, in some cases even thousands on check cashers, money lenders, pawn shops that are charging you serious rates. So we can simultaneously integrate more of the New Yorkers who are struggling the most into our financial system in a way that gets them away from these check cashers and money lenders that are charging them and also get some money

into their hands to help meet their basic needs. Yeah, and I know you have this interesting idea of a people's bank. Can you explain how that would work in New York? So the People's Bank is nonprofit fund that we will use to augment the resources available to community development financial institutions, which includes credit unions, and a lot of these CDFIs are doing great work reducing the unbanked

population because they're in these communities. They're trying to plug people in to the financial system, and so the People's Bank is a way to get more resources to the organizations that are touching people and doing the work every day. The other thing that the People's Bank is going to do is it's going to work with traditional financial institutions to have a safe bank account for folks of any status. So you can walk into a city bank with an id NYC open to save bank account under the People's

Bank brand name of the People's Bank seal. So it's a way to integrate people in the financial system by getting more resources to community organizations and also having like a trusted seal that will give them confidence that they can get a bank account even at like they're a local branch. A lot of people talk about doing that nationally through the post office, which is in fact what they do in some other countries. In France, I know you can do your banking at a small scale at

the post office. Is this another example of something where you just have to invent a local version of it because the more rationalized national solution isn't available to you. Well, you said it, I didn't, Jacob, but I was for postal banking when I was running for president. It's common sense,

the no brainer. Other countries do it. You know, you have to give the post office like more things to do, frankly, like in a lot of these places, because like you know that the carriage of mail isn't necessarily sustaining it. And so let's say that you have that vision running for president, and then you're like, hey, I'm running for mayor of New York City, Now, like, what can we do that's going to try and solve some of the

same problems. And that's actually a pretty good example of the way we're approaching New York City's problems is obviously you have different operating realities, you have different levels of resources, But what can you do with the resources that you have that actually solve some of the same problems. New York presents a special case, Andrew, because it's such an expensive place to live, and based on studies I've read in the past, for people who didn't go to college.

There are very few jobs in New York, in the New York area that provide a middle class income first family. I think the unionized building trades are, you know, probably the only major source of middle class something resembling a middle class living for people who don't have college degrees. Does your plan really address the depth of that problem, that there's just a mismatch between what a cost to live here and what jobs pay if you if you

don't have some higher education. Well, Jacob, you're you're pointing out some of the long running problems in New York City, and they're all tied together. So one thing you're describing is you have an economy that disproportionately will reward folks who are skilled and have certain levels of education. And that's true nationwide, but it's it's more true in New

York City. To your point, the fact that there are actually meaningful unions and organizations fighting for folks who don't have college degrees has been an enormous path to the middle class for ten hundreds of thousands of New Yorkers, and that actually distinguishes New York from a lot of other environments. I mean, like like, the unions are a more powerful presence for mobility here than they are in

other parts of the country. So then you have folks who are not unionized and who have low levels of education, and to your point, a lot of them are just scraping by. You have to try and attack the affordability issues, and the most intractable of them is clearly housing. Just living in New York City is very expensive, to your point, and so that's something that we have to try to invest in at a much higher level than we have.

And I think there are opportunities there, in part because right now, frankly, vacancies in rental apartments are at multi decade highs because of COVID. Our hotels are eighty to ninety percent unoccupied because we're missing so many tourists. There are opportunities to convert some of the buildings right now that are vacant and unused too affordable housing, to try

and have the opportunity meet the need. Your presidential campaign captured a lot of people's imagination because this was a big idea and also it's interesting background is a neither left nor right idea, but it was a lot more money for a lot more people. It really was universal, and it really was something resembling a minimum standard of living for everybody. This plan, by comparison, just seems not

that much money for that not that many people. Is that just the fiscal reality of New York City that this is all you can do? Well, Jacob, I think that most people realize that if Andreang had his way, we'd all beginning one thousand dollars a month at this point, I think that doesn't go fire it up like with COVID, I'd probably be more like the two thousand dollars a month level. And I think there are really creative ways that we can get more buying power to the hands

of New Yorkers. So there are yeshivas in Brooklyn that ask the parents of the children to buy two thousand dollars worth of vouchers to locally own small businesses. They buy these vouchers, they then use them at the locally owned small businesses. The businesses turn them into the yeshiva, and then the yeshiva takes a cut, let's call it

fifteen percent. So this is a massive fundraiser every year for the yeshivas, and the small businesses win because they're getting a lot of business that they might not have gotten otherwise. If New York City were a country, we would be the eleventh biggest economy in the world. We're a very vast, diverse economy. There are ways that we can get buying power into people's hands that get funneled straight to locally owned small businesses in a way that's

value multiplying. And so when you look at the problems we're trying to solve, we do have a crisis among restaurants and small businesses where thousands are closing, thousands of others aren't sure whether they're going to make it and so and then we have food lines for blocks. We have seven hundred thousand missing jobs. There are creative ways that we can get value into people's hands that will circulate in a way that will help our communities directly.

So when you talk about some of the physical realities we face, you know, New York City is not the federal government. We can't conjure up one point nine trillion. But there are things that we can do that we'll get value into people's hands. That's one reason I'm running for mayors. I think I can do more to help turn us around. At two thousand dollars a year. It isn't really an issue, but a lot of people who object to the idea of a UBI are simply concerned

that it will disincentivize people to work. And you know, and this is the argument about welfare, you know, going back decades, whether it should be conditioned on work or whether it should be offered in the form of a guaranteed job. Obviously, your proposals go very strongly in the

direction of non conditionality. Can you explain why you think that's not a problem with the idea of UBI, That is why UBI doesn't make it possible for people who would otherwise be working fuller part time to not work well. First on, lately out the objection, so people know what they are, and you can imagine what they are. Number one is how do we pay for it? And number

two is what will people do with the money? When the Cares Act was passed and we put twelve hundred dollars into people's hands, and this was a very small fraction of the two point two trillion in the Cares Act, we could have given everyone in America six thousand dollars and still had billions left over in the cars Act, but most of the money went to companies and institutions

of various kinds. So number one, now Americans are like, oh, we actually had the money, you know, like we could have done this if we wanted to at any point. And then number two, how would you spend the money? It's manifest and how people actually did spend the money, because when they got the twelve hundred dollars, they spent it on food and fuel, their basic needs and keeping a roof over their head, and it did not transform

their personalities, it didn't change their work ethic. And so now like the objections that people have really been kind of demonstrated not to be as compelling by our own experience, you know. And it's one reason why cash relief now is so front and center in our national conversation as to what to do. Eighty five percent of Americans are for a cash relief during the pandemic, and fifty five

percent are for it in perpetuity. But I think that the thought amount of work ethic, it's very deeply baked into the American psyche. The odds of people starting a small business in their community would skyrocket if both they had a certain amount of money they could rely on and if everyone in their community had a certain amount of money to spend. How is New York's fiscal condition looking ahead? Which is another way of asking the question of how affordable it would be to create and expand

this program. You know, going back decades, of course, the city had a fiscal crisis and was essentially bankrupt. But in recent years its revenue is very much spurred by the boom and the real estate market, and it's been pretty flash. I mean, budgets have grown and you know,

they haven't been big shortfalls. But post COVID, obviously we don't know what the city is going to look like, what property values are ultimately going to settle in at it's the city in good fiscal shape or terrible fiscal shape. The city is in bad fiscal shape. You're looking at multibillion dollar deficits for the foreseeable future, for the next let's call it four years. Some of the numbers, Jacob,

that I have top of mind. We've lost twenty seven thousand lives, seven hundred thousand jobs, sixty million tourists who used to support three hundred thousand of those jobs. Several hundred thousand people have left New York City, including some people who are frankly very high taxs payers and earners.

Some way, ridership is down seventy percent. Let's call it a four to five billion dollars deficit on a budget of eighty eight billion or so, and we're not even sure whether that's the precise level because some of these things are still playing out. Midtown commercial real estate is eighty two percent unoccupied, which is devastating not just for those organizations and their landlords over time, but also security guards and the food trucks and the street level retail

that ordinarily would have that those commuters every day. This is a really, really dark time for New York City, and there's no guarantee it comes back the way that we wanted to. We should know that that's what we're facing. I guess someone could come and give you, like the rosier version what I just described, but I'm a numbers guy that those are just the realities we're facing now.

You were asking in the context of this particular universal or in my case not universal, like a guaranteed minimum income in New York City. I do want to tell a story that pushes us in that direction. I talked to a philanthropist here in New York. She ran a foundation that gave new moms baby clothes and formula and strollers, and then when COVID hit, they just converted to cash. They were like, well, we can't give you all the stuff because you know it's tough for this environment, so

it's going to send you money. And then it turns out that that worked really well. They're like, hey, maybe

we should stick to this. So there are a lot of philanthropists who had similar experiences, and I'm optimistic that we're going to be able to augment our resources by teaming up with some of the nonprofits and foundations in the city to say, look, this is the most effective thing we can do to alleviate poverty directly by putting money into people's hands, because if you keep people in more stable situations in New York City, Jacob, we actually

save a lot of money. Yeah. I think a question coming up in the debates is surely going to be whether this is the best use of a billion dollars to alleviate poverty in New York. You know, you could do a lot about housing and homelessness with a billion dollars.

You could do a lot for the public schools given those other pressing needs, do you think it really makes sense to be categorical about supplementing cash income well, Jacob, but one of the problems you cited is homelessness, and I'm very confident that putting resources into people's hands it's going to reduce the crisis of homelessness that we're seeing in New York City. If a family winds up in our shelter system, we are spending six thousand dollars per

month on that family. And so if you spend a fraction of that keeping someone in their home and they don't wind up in our shelter system, it's actually a win. One of the things I've committed to is reducing the level of street homelessness by more than fifty percent in my first term, and it is doable. We can invest in safe haven beds and mental health resources and supportive housing and more assertive interventions to get people the help

that they need. So what I would argue is that this extreme poverty relief program will actually reduce some of the other problems that you're talking about, whether it be homelessness or public safety or education. Because obviously a lot of these people have families, and it's very difficult for a child to learn if they're in extreme poverty. I mean, you know, you can imagine what that that that's like.

I talked to someone yesterday who grew up in poverty, and he said that his last meal of the week was school lunch on Friday, and then he didn't eat again until school lunch on Monday. You know, so you can imagine the learning environment, you know that for that child. So cash relief touches a lot of other problems. We need to invest in the other problems, obviously directly, but I would argue that this is actually something that will

make those other solutions more effective. I'm curious about why extreme poverty and cash relief is the problem that you've really devoted your career to at this point. I mean, personally, is there How did you come to this? Did you experience poverty at some point in your life? Did you witness extreme poverty? Jacob, I'm I'm the child of immigrants, but I had a relatively privileged upbringing in like a middle class household, and you know, in Upstate New York

in the suburbs. For me, I came to this because I spent years running an organization Venture for America that I founded that was creating jobs around the country in the Midwest and the South primary and I became convinced that our economy is transforming in ways that will leave millions and millions of us behind. It already is I mean, and the pandemic has sped it up. Experts have called

it the fourth Industrial Revolution. If you play out what impact technology will have on our labor force, it's going to be disruptive to the lives of tens of millions of Americans. Most common jobs in the economy are retail, call centers, food service, food prep, truck driving, and manufacturing. And what you've heard is that all we're going to retrain them. But then as soon as you dig into the realities of retraining like that, the programs don't work.

It doesn't make sense. You're not going to take a thousand coal miners and turn them into coders. The fact is, if you actually follow up after you have the press release saying we're going to trade coal miners as coders, then you get there and they're working at Sam's Club. So I arrived at universal basic income because I saw it as inevitable as a response to these economic changes, like, we have to make this investment now. So that's why

I ran for president. We won the argument right now at this point, though, our government is not functioning in a way that you know, if majority of Americans want something, it passes. So that's why I'm so passionate about it. Jacob. There's just so much unnecessary, untold human misery that we can just alleviate tomorrow if we just decided to do so. But you're making a bed, aren't you? That the economic future is going to be fundamentally different from the past.

In the past, when jobs, hard physical jobs have disappeared because of automation and trade, generally workers have moved up the value chain. The United States has produced products with bigger value add and ultimately standard of living increases. And when you talk about this idea of the Fourth Industrial Revolution, isn't it making an assumption? Obviously, the individual stories are entirely real, and there are there structural displacement of jobs.

But when you look at the economy as a whole, are you can in set really is our future that is having a really significant segment of society that is structurally unemployed ako, it's our present. Look around, you know, I mean you have the ranks of the long term unemployed rising every week because of the pandemic. This is no longer speculative. This is the reality we are faced with right now. And even the first industrial revolution of the turn of the century involved masked riots and unrest.

Labor days inaugurated because of riots that caused a number of deaths. And this industrial revolution is faster, nastier, broader, it's going to touch more industries. You can just look around and see very clearly that we are disintegrating by the numbers. You know, you ask any economists and say, hey, like, are these folks that are losing their jobs? Are they like finding new opportunities? We are moving across state lines at lower levels that we have in decades. So the

adaptation is not happening. The disintegration is. And the question is how quickly will we acknowledge it and do something about it? Yeah, and what can listeners do about this problem? And I'm not talking about supporting your campaign for mayor, I'm talking about whether or not you're elected mayor. What can listeners do about elevating the economic status of the

worst off new Yorkers. Well, you switched the topics there, Jacob, because first I thought you were like, what can we do to elevate universal basic income or as a national solution, and then it was like helping New Yorkers. I mean, if you want to help New Yorkers, you should donate to food pantries and nonprofits that are meeting people's needs right now. I mean, that's very direct. You should be

supporting local businesses yourself. You should be tipping generously. You should just be like putting money into people's hands in any way you can. If you think that I'd make a good leader of New York's revival, certainly I would love your support. And at a national level, we just need to keep pushing folks, particularly frankly like folks who are more on the right, to say that this is pro business, it's pro jobs, it's pro humanity. I'm happy to say that at this point this is not a

left or right idea. It's forward and if we can build consensus around it, we have a chance to alleviate poverty in our time, not just in New York but everywhere in the US. Andrew, Andrew standing you recovering recovered from COVID nineteen. I hope you're feeling better, boy. It must be tough campaigning when you have that illness. Well, thank you, Jacob. I feel much better now, but it was a nasty number of days. But you know, I appreciate the sentiment. We're going to get through this time.

But COVID is definitely something that you should take very, very seriously. Andrew Yang is running from mayor of the City of New York. To learn more about universal Basic Income and guaranteed minimum Income, check out the links in our episode notes. Solvable Senior producer is Jocelyn Frank, Research and booking by Lisa Donn, Managing and producer is Catherine Girardou,

and our executive producer is Mia Lobell. Special thanks this week to Heather Faine, Kadija Holland, Maya Konig, Emily Rostek, Eric Sandler, Carly Migliori, John Schnars, Christina Sullivan, and Maggie Taylor. Solvable is a production of Pushkin Industries. If you like the show, please remember to share, rate, and review it. It really helps to get the word out. You can find Pushkin podcasts wherever you listen, including on the iHeartRadio app and Apple podcasts. I'm Jacob Weisberg.