Alaska gives each resident a check every year. It’s cut poverty — and warped the state’s politics.
What if we just give people money?
This is the question propelling several new books and that’s been taken up by more than one presidential candidate — foremost Andrew Yang, who has made universal basic income (UBI) the centerpiece of his campaign. An automated future looms on the horizon, and tech magnates and policy wonks are turning to UBI as a neat solution to the messy problem of technology-induced unemployment.
Yet when one considers the political ramifications of the largest and longest-running UBI experiment in America — Alaska’s Permanent Fund Dividend (PFD) — giving out cash appears to create unforeseen problems, and advocates for basic income would do well to incorporate Alaska’s latest experience into their conceptions of the policy.
Since 1982, Alaska has been giving every woman, man, and child an annual chunk of its nest egg: the $66.3 billion Permanent Fund. Alaska deposits at least 25 percent of mineral royalties — revenue the state generates from its mines, oil, and gas reserves — into the fund annually. The money is in turn invested by the Alaska Permanent Fund Corporation in domestic and global stock, bonds, private equity, and more, and interest earnings are then distributed to Alaska residents every September.
Former Gov. Jay Hammond, the mastermind behind the fund, created the dividend system as a way to ensure Alaska’s nonrenewable resources could provide an everlasting return to the state. In his words, he “wanted to transform oil wells pumping oil for a finite period into money wells pumping money for infinity.” Paying out $1,000 to $2,000 per person per year — every Alaskan gets the same amount — was Hammond’s plan to protect the fund. If every Alaskan were a stakeholder in the Permanent Fund’s future, surely no politician could dismantle it without paying an electoral price.