Twitter founder Jack Dorsey donates $3m to universal basic income scheme in US cities

Twitter boss Jack Dorsey has backed a scheme to provide US citizens with a universal basic income.

He has invested $3m (£2.4m) in the initiative, which is being tested by mayors of 16 cities in the United States.

The scheme is “one tool to close the wealth and income gap,” the billionaire said.

Mayors for Universal Basic Income was launched on June 29 by Michael Tubbs, the mayor of Stockton, California.  The 29-year-old has been running a pilot there since 2018, paying $500 (£386) a month to 125 residents.

The merits of a universal basic income have been debated for some time and the idea was reportedly on the table during the early stages of the coronavirus pandemic, as the Treasury brainstormed how to shelter Britons from the resulting economic shutdown.

Proponents argue that it is the best way to guarantee a fair standard of living for the entire population and protect them from sudden economic shocks, like a pandemic, or the rise of artificial intelligence and automation, which is expected to accelerate layoffs in several industries.

Giving every family a monthly stipend would also lower a government's costs as it would not need to monitor benefit fraud or carry out means testing.

In May, Mr Dorsey gave $5m to an organisation founded by former Democratic presidential candidate Andrew Yang to build the case for universal basic income.

The idea has also been endorsed by Elon Musk, Richard Branson and Mark Zuckerberg. However, Finland cancelled a pilot involving 2,000 citizens after two years, after recipients remained jobless.

Dorsey’s pledge is part of the $1bn he has committed to help fight the effects of the coronavirus pandemic, which represents around 28pc of his wealth.

The non-profit, Start Small, has already backed America’s Food Fund, a project launched by actor Leonardo di Caprio and Laurene Powell Jobs, widow of Apple co-founder Steve Jobs.