This Is Encouraging

Regular readers of this blog are aware that I favor a UBI–a universal basic income. I’m certainly familiar with the arguments against it, and even more aware of the “devil in the details” that can make or break most policies. What I find encouraging is the slow but steady spread of pilot programs testing the concept.

The New York Times article at the link reports that at least twenty U.S. cities are currently conducting pilot programs meant to test the idea.

More than 48 guaranteed income programs have been started in cities nationwide since 2020, according to Mayors for a Guaranteed Income, a network of leaders supporting such efforts at the local, state and federal levels. Some efforts are publicly funded, and others have nongovernmental support. Jack Dorsey, the former chief executive of Twitter, donated $18 million to help the initiative.

At its essence, a Universal Basic Income (UBI) is a stipend  that would be sent to every U.S. adult citizen, with no strings attached– no requirement to work, or to spend the money on certain items and not others. It’s a cash grant sufficient to insure basic sustenance. (A number of proponents advocate $1000 per month).

Andy Stern, former President of the Service Employee’s International Union, points out that a UBI is simple to administer, treats all people equally, rewards hard work and entrepreneurship, and trusts the poor to make their own decisions about what to do with their money. “Because it only offers a floor, people are encouraged to make additional income through their own efforts… Welfare, on the other hand, discourages people from working because, if your income increases, you lose benefits.”

With a UBI, in contrast to welfare, there’s no phase-out, no marriage penalties, no people falsifying information–and no costly bureaucracy. My more extended arguments for a UBI can be accessed here and here.

For obvious reasons, the programs described in the Times article focus on impoverished Americans, rather than testing universal payments.

Damon Jones, an economics professor at the University of Chicago, who has studied such programs, noted that unrestricted cash — including stimulus payments — was used broadly by the federal government to stem the economic devastation of Covid-19.

“Policymakers were surprisingly open to this idea following the onset of the pandemic,” Mr. Jones said. Now the emergency aid programs have largely lapsed, ending what for some was a lifeline.

A number of conservatives argue against a UBI, asserting that it would dis-incentivize work and/or that it would make more sense to reform programs already in place–something easier said than done. But support for a universal income has not been limited to progressives. Milton Friedman famously proposed a “negative income tax,” and F.A. Hayek, the libertarian economist, wrote “There is no reason why in a free society government should not assure to all, protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need descend.”

More recently, In 2016, Samuel Hammond of the libertarian Niskanen Center wrote about the “ideal” features of a UBI: its unconditional structure avoids creating poverty traps; it sets a minimum income floor, which raises worker bargaining power without wage or price controls; it decouples benefits from a particular workplace or jurisdiction; since it’s cash, it respects a diversity of needs and values; and it simplifies and streamlines bureaucracy, eliminating rent seeking and other sources of inefficiency.

One of the earliest of the pilot programs was in Stockton, California, and analysis of its results confirmed several of Hammond’s points.

Preliminary research from a pair of college professors, based on the first year of Stockton’s two-year program, found that giving families $500 each month reduced those households’ income fluctuations, enabling recipients to find full-time employment.

Researchers, for example, found that 28 percent of recipients had full-time employment when the program started in February 2019; a year later, the figure was 40 percent.

In one case, a participant had been studying to get his real estate license for more than a year — a pathway to more consistent, higher-paying work — but could not find time to study while piecing together an income doing gig jobs. The money from the pilot program, researchers found, gave him the time to study and get his license.

California–unsurprisingly–has most of the pilot programs currently underway, and the Times reports that Governor Newsom is an advocate of the UBI.

As I’ve previously noted, pilot projects to date have debunked predictions that poor folks would spend the money on drugs and liquor. Instead, most has gone for items like food, medicine, diapers and education.

It will be interesting to see the results of these current pilot programs–and assuming they continue to be positive, even more interesting to see how the nay-sayers respond.

 

31 thoughts on “This Is Encouraging

  1. UBI programs should have been negotiated for workers when the megacorporations left our shores for cheap labor in the 70s, 80s, and 90s. That was the first sign the unions sold out workers.

    The greed of the corporations should have been passed on to American workers, but instead, it was passed on to CEOs and shareholders. Workers got screwed.

    Now, the politicians in Washington just gave billions to industry to fund their R&D programs and build infrastructure for these megacorporations to bring back the semiconductor industry.

    Amazing!

    Meanwhile, workers are seeing their energy bills rising three-fold in many areas.

    The greed of the oligarchy should be on the local and national news every night so workers can understand how many ways we are getting screwed by our politicians and those who own them.

    Sadly, the media has sold us out too. We need blogs like this to educate Hoosiers on how we’ve become such a corrupt nation where the Treasury is used for the oligarchy and the Pentagon instead of the people.

  2. UBI…bullshit!!! Most Americans have a work ethic; whether it is just their nature to to be responsible adult U.S. Americans and work hard or due to necessity to provide for themselves and their families; UBI will give those who do not want to work a reason not to bother. Where will the taxes come from to provide this “free money” if there is no incentive to work? Most people who are caught in the “welfare system” want to get out of it; the lack of safe and affordable child care and public transportation keeps them locked within the system. In the trial programs, “Some efforts are publicly funded, and others have nongovernmental support.” how long will public funds and nongovernmental sources survive paying adult U.S. Americans not to work.

    BULLSHIT!!! UBI is not a progressive effort and proves conservatives are right to accuse us of seeking entitlement income and argue against this system. “It will be interesting to see the results of these current pilot programs–and assuming they continue to be positive, even more interesting to see how the nay-sayers respond.”

    Count me in as one of the nay-sayers. THERE IS NO FREE LUNCH!!!

  3. Another benefit: no stigma.

    JoAnn, I often find something to agree with in your posts. I can’t recall a time where I ever disagreed more. I understand your argument only to the point that you dislike the idea of giving out free money. It feels… wrong, to you. I note this because your argument suggests that people on welfare are anxious to NOT be on welfare, but at the same time you are worried that people receiving a UBI will instead just decide not to do anything. This doesn’t make sense. Except maybe for the lack of stigma I mentioned?

    The provision of a floor doesn’t mean people will live in bohemian excess and luxury. It provides a basis to build from. Maybe it means working only one soul-sucking horrible job instead of two or three, and allows for some time to indulge in hobbies, like games with friends, or hiking, or knitting, or painting, or gardening, or playing with the children, or whatever. Basic quality of life would be much improved for a very minor investment. I imagine health would likely improve for many people, and this could even save money in your (obscene, in my opinion) health insurance system.

    I really think you just need to take a look at it more objectively. It’s easy to have that knee-jerk negative reaction. I bet a lot of people are going to argue “but _I_ had to work for every penny”. Just like with the recent student loan forgiveness, I find these arguments to be a little selfish and petty.

    (And JoAnn, I don’t mean to suggest that you are selfish or petty. I don’t think that at all. I just think you are falling into a natural trap of your own biases and predispositions, like we all do quite regularly.)

  4. Wow. Thanks to all (Todd, JoAnn and of course Sheila) for convincing me of UBI’s viability. I’m sure there are lots of details that need to be worked out but at least UBI is making progress.

  5. The floor that I most worry about theses days, with unemployment levels being as low as they are, is the decency floor, but then again, I do live in Florida.

    In addition to a UBI, we also need to find out what jobs we can’t fill. why we can’t fill them, and what training do we need to offer to those who might fill them. Then we need to make that training available near enough to the people who need it that it would be easy to avail themselves of it.

  6. Gee, if people all WANTED to work due to some innate work ethic, why do so many millions toil to accumulate by any means available the fortunes that will allow them to retire early and not work?

  7. As you say, the devil’s in the details. In order to save money on the bureaucracy, you’d have to remove programs which the UBI would then substitute for. So, if a UBI means removing SNAP, WIC, housing assistance, Medicaid, etc. – then it’s not much of a boon for the people who need it most. Careful what you wish for.

  8. John H; I am 85 years old, totally deaf, physically disabled with a list of other health and spinal problems living on barely above federal poverty level income. I felt guilty for years for not working because I was only 57 when I became disabled. I could use more money but accept what is provided as my due after working approximately 25 years of my life prior to becoming disabled. During my first marriage I babysat and took in sewing to help pay for whatever was needed. I drive a 26 year old car and my hopes of it outliving me are becoming less each year. I believe most on this blog have my same biases and predispositions as you call them, that money should be used to help those who need and deserve help. I was on food stamps for a brief period when my ex-husband played games with child support and my weekly take-home pay was $64.00; I had FIVE children to feed and got all bills to pay off in the divorce. When my income increased it took me three MONTHS to stop the food stamps, which I could have used but no longer qualified for. The ex-husband cheated the government for years on his IRS forms and the VA to collect disability for an old high school football injury; this disqualifies me from collecting against his Social Security. I grew up in a “mixed” neighborhood; racially and economically and I learned the difference between struggling poverty level families and those who scammed the welfare system and never worked a day in their lives. I see them in my neighborhood and, sadly, have a few in my own family who I have stopped “helping”. Human nature is what human nature is and those who are naturally lazy and know how to work the system will always be with us, many taking money which those who actually need and deserve it are forced to go without due to the ever increasing numbers seeking give-away money for doing nothing. Look at the businesses which did not reopen or opened and closed due to lack of workers when the Pandemic eased; former workers accepted the low pay scale before the pandemic and supported the struggle to increase minimum wage which continues today. Some had their stimulus checks and found other sources in the welfare system to augment their “income”.

    I lived in Pasco County Florida for 7 years; it was primarily a retirement area. We received a free weekly newspaper which had a section where retirees who wanted to keep busy and add to their low retirement income advertised their qualifications. I hired a number of them for repairs, maintenance and renovation of my home; they charged reasonable rates and did quality work. A win-wind situation. My next ex-husband who was a paraplegic, we moved to Las Vegas for his health; we needed much work on the repossessed home we bought. There were groups of men and a few women outside of the unemployment offices daily where we hired people who wanted to work to earn money…or they wouldn’t have been at the unemployment office.

    What is wrong with the argument “I had to work for every penny.”?

  9. UBI? Sure. How about Charlie Koch and Jeff Bezos each coughing up $330 million. That would be $2 million for every man, woman and child. And not to worry about the free lunch. When all that largesse can’t be used to buy things that aren’t being made, what will be the consequences of that?

    Oh. and the $660 million is a burp in a windstorm to the two mega-billionaires mentioned. What if Musk added some of his chump change? The mind boggles.

  10. Learn to Code.

    I remember hearing a typical politician’s response after another round of layoffs resulting from the massive deindustrialization of the US and especially the Midwest in the 80’s-00’s: “They can learn to code”. In other words people who spent much of their lives working in low-skills jobs involving mostly manual labor were supposed to become computer programmers. RE-training the workforce was (and still is in our state) the answer. I don’t doubt that many (mostly younger) people took advantage of these programs – enabling them to chart a more secure career path, but the vast majority moved onto other lower-paying and non-union jobs in manufacturing or services. And often two or more jobs.

    Our economy has gone through several massive technology revolutions and the most recent one (info tech) has left us with an economy with a massive surplus of unskilled labor.

    But it’s nothing compared to what is coming. The next wave of automation, already underway, will eliminate the need for millions of people in jobs that are today considered skilled, and also pay well, ESPECIALLY in the banking, insurance, and health care sectors. And while people with college degrees have traditionally been exempted from it, they won’t be. Besides, only 38% of Americans even have a college degree, and only 21% in Indiana. Those percentages aren’t growing very fast either.

    “Bullshit Jobs: A Theory” is a great book on this topic by David Graeber, an anthropologist and advocate for national UBI. You can look it up yourselves if interested. But the gist is that there are a lot of jobs in the economy today that create no useful economic or social output other than to push income into people’s pockets. And many of these are white collar jobs across ALL sectors of the economy. MANY of them are going to disappear as AI-based technology marches forward to automate the processes in which those bullshit jobs exist. This is because you cannot automate bullshit – you can only eliminate it, as anyone who’s been through a good quality management training program such as Six Sigma knows.

    In other words, there will come a day when there simply isn’t enough real work to go around – I would argue we’ve already reached that point, despite our national 3% unemployment rate. A UBI system will enable those whose circumstances and decisions have left them bereft of the specific skills to achieve a meaningful and well-paying career will AT LEAST have the means to to keep pursuing one. Or not, if they cannot or choose not to. Otherwise, the our society will continue to shrink its middle-class, grow its working and lower classes and further concentrate income and wealth at the top of the food chain.

    We already know what this trend leads to. Mass expression of grievances, diminished faith in all our institutions and ultimately political instability with a call for an authoritarian government to redress said grievances (it will not do this, ever). We’ve already been through two chapters of this saga: 1) Tea Party, 2) MAGA. What’s the next chapter going to look like?

  11. Not a fan of UBI at all. Would prefer something more targeted like a housing voucher or the Earned Income Tax Credit. Both of these programs have documented long-term benefits but are routinely cut by legislative bodies. I have no clue how you think a new “universal” program would ever be approved given that we seldom fully fund existing programs.

  12. Joann, I wish there’d been a UBI to help you during your life. Or, at the least, other social programs that exist in most other western countries that are lacking in yours. But because you _didn’t_ have it, I don’t think that’s an argument that no one should ever get it.

    Really, all we’re saying is work hard for every dollar, except the first $1000 (or whatever the base is deemed to be), which will be provided.

    I bet you’d have been hard-working even with a UBI, as would most people. The difference is that a lot of the worry, stress, misery and suffering that existed for you (and many others) could be alleviated.

    Although I think the arguments are overstated, I can at least understand the ones related to how to pay for it, or how to measure it so that it doesn’t cause inflation. What I will never understand are arguments against it for any other reason. Things like: only “deserving” people should get it, or people _should_ struggle, etc. Do we really not all agree that helping to alleviate misery and terror of living beings is a good thing generally; something to be striven for?

  13. My wife and my sister both had breast cancer but about 10 years apart. My sister’s care was much improved over my wife’s as there’d been 10 years of medical advances. And no one is ever going to argue that my sister shouldn’t have received those better treatments, had an easier time with the chemo, avoided radiation, encountered improved surgical methods, and generally had a much better experience.

    Then I look at a lot of reactions to student loan forgiveness, and the very _idea_ of some sort of UBI. It boggles the mind. (My wife and I paid off $60000 in student loans. So what? Punish others because of it?) To me, these are all the same. If there are ways to make people’s lives better, reduce misery, reduce terror, add quality, then you do them.

    Here I sit, still looking forward to that Star Trek world of the future. 🙂

  14. Most of the Boomer generation got steady doses of the Calvinistic work ethic – no work, no eat.

    Those days are over, as Patrick has eloquently explained. My dad’s middle-class job at the factory is being done in developing countries, as it should. He took retirement early and is 95. His job doesn’t exist in the U.S.

    Once we restructure the education and healthcare systems, millions will be unemployed, as they should be.

    Technology is supposed to work for society to make us more efficient, but it should kick people and our incomes to the curb. The Oligarchy’s greed is wrong, wrong, wrong. It shouldn’t benefit the owners – it should benefit the working class.

    This requires a complete shift in how we think about income, wages, salary, and profits. It has to become more social for all those in our economy. Nobody deserves more, and nobody deserves less.

    But first, we will need to strike so that the owners know where real power exists. 😉

  15. John H; my argument was NOT because I didn’t have it, welfare was there for me to apply to but I saw so many worse off, whose need was greater, that I did not apply. It was the same with the food pantries I qualified for in Florida but saw rank poverty so I left the boxes of food. That “first $1,000” you referred to is monthly, not a one-time, prime-the-pump incentive to get a job. You have no understanding of what I am saying; I can only guess you are among those on the blog who have not had to do without meeting the needs of yourself or your children, such as regarding shoes for which one or two, dental appointments when there was a serious need. You will have to continue this discussion with yourself, I am opting out.

  16. UBI is a perfect example of simplistic “spray and pray” programs with the good intent of helping improve complex human lives. To the extent they “work” , it is likely a variant of the “halo effect”.

    The key help folks need materially live better…”depends”. It may be housing; it may be food; it may be healthcare…it may be 10% of this + 25% of that. Also, many who need help do not have the education and/or information on getting it. Tossing money and hoping is a bit of an amazing proposal. I thought religion was dead.

  17. I’ll be honest and say, “I don’t know about UBI”.

    I see way too many people dropping out already. From families who barely scrape by on public assistance from one generation to the next, to a huge uptick in SS disability claims, to an exploding homeless population that’s increasingly strung out on meth.
    I can easily imagine where people would wrongly view this as a viable floor, and we would have even more people dropping out. Twelve thousand a year is a nice boost, but it’s not a great floor.

    Which brings up the next issue: When people can’t get by on $12k a year – which will be inevitable – where’s the limit?

    Work is important to people beyond just income. And poverty isn’t just about “not having income” any more than homelessness is just about “not having a home”. I happen to strongly believe that the most effective anti-poverty program is full-time work that pays a living wage–even if that living wage has to be subsidized (reverse income tax). Being engaged in employment builds skills, work habits, problem solving, personal networks, future orientation, confidence, etc.

  18. In the 1960s the U.S. government financed the first of several projects intended to measure the empirical effects of nonlabor income. The New Jersey Income Maintenance Project targeted 735 families for the periodic receipt of free money in an effort to provide evidence germane to such proposals as a negative income tax. The elaborate controls included 632 closely comparable families that received no such payments. The final verdict was that nonlabor income reduced the supply of labor, but that the effect was surprisingly small and mysteriously nonexistent among black households (Watts, H. W., and A. Rees, eds., 1977. The New Jersey Income Maintenance Experiments, vol. 2: Labor-Supply Responses. New York: Academic Press.)

  19. I seeUBI as a good idea, and consider the arguments against it as nothing but excuses/rationalizations.
    The evidence I’ve read about, here, this morning, and elsewhere, shows that it does not feed SUPPOSED
    laziness, but helps people get on their feet, maybe for the first time ever.
    I see no reason why the income from UBI flowing into middle-class homes would not help fuel the economy
    beyond allowing the poorer people get into the economy, such as the real-estate person referred to above.

  20. Let’s see now the 21st century culture….well off people get “curated” products and services customized to their every specific need. Poor people get some bucks with “see what you can do with this”….come on, folks.

    There is good research that when people in poverty work with a team to determine what will help them the most fastest and then “walks them through” those programs, real progress takes place and the person/family owns the experience.

  21. There is a built-in assumption in this discussion that has been ignored. There are degrees of abilities in people, call it intelligence, IQ, or cognitivity, mental or physical development or whatever term applies.
    Not everyone has the mental or physical attributes to do skilled labor or even to manage the demands of an ever-increasingly complex life. I wish everyone had the abilities necessary to negotiate tasks that most of us are expected to master without any effort, like reading. Learning to read may be an extremely difficult task for someone with a disability. Reading and comprehending what is read are two very different things. Complex and complicated.
    By offering a baseline of support to all, we may be supporting some who are not in true need, but we are certainly going to allow others who might never be in a place to have just their basics needs met a chance at a quality of life that benefits not just themselves but the common good as well.
    We have seen evidence in other countries of the benefits of such things as universal healthcare, education, public transportation, paid for in taxes. Our politicians have weaponized taxation to the point where it is viewed as theft from the entitled paid to the undeserving by a great number of people who assume that we all have the same abilities to start with. All men are not created equal but all might have the same opportunities if common good is the real goal.

  22. And then there’s this: “According to a recent analysis by Bloomberg CityLab, there have been 20 guaranteed-income pilots initiated since 2018, with more than 5,000 individuals and families receiving between $300 and $1,000 a month. If all these experiments reach their conclusion, they will cost at least $35 million. What does this tell us about the scaling up of these programs on a national level? It tells us that they would be extremely difficult to pay for. “

  23. Capitalism is brutal. When something like Uber takes over and Cab drivers are no longer needed, they get spit out and locked out because they didn’t own their own vehicles. The last 400 years, since the break up of feudalism and the beginning of the industrial revolution, we have had wave after wave of people that have been put out of work and forced to retrain, relocate, and or reeducate or face starvation. Something should soften that cruelty.

    The gaming and cheating that JoAnn describes, happen because of the inverse incentives of so many of our social Welfare systems. Occasionally you hear about people cheating on the US Social Security program, but the fraud in that program is minuscule, mainly because it is universal and so easy to administer.

    With the Pandemic payments helping to fuel inflation (I know it was only one factor), I worry what might happen to the economy when we suddenly take 10-20% of the population out of poverty. But with a progressive tax system (as opposed to today’s largely regressive tax system) I suspect that the as income levels rise the people (and corporations) doing well would see increased taxes and that might offset the inflationary effects, while boosting those at the bottom.

    When there are structural inequities built into the system, there is no such thing as “pulling yourself up by your own boot straps”. As a matter of fact when the phrase first came into use, it meant trying to do something that was impossible.

  24. Sorry, Vernon, but $660,000,000 divided by 330,000,000 people would actually be $2.00 per person. I’m not a math geek, but there are a couple in my family who might not forgive me if I didn’t speak up. All that largesse means we all still have to work.

  25. “What is wrong with the argument “I had to work for every penny.”?”

    A lot — especially for people of color. Systemic racism has prevented people of color from starting at the same point most of us white working stiffs have. If you come from generational poverty it’s hard to get ahead. Kids who go to bed hungry or lacking good nutritional foods don’t do as well in school. My father had the benefit of the GI bill to purchase a home. Men of color who served in WWII did not. The homes I have I bought were never in “red-lined” districts. In my younger days I applied for several small loans at reputable and built up my credit score so I could purchase a car to get to work. Many people of color have never qualified for a decent loan although the Title Loan folks have made out like bandits. I have never had a small business or a family home burned to the ground and insurance companies refuse to pay out. People of color have. I could go on . . . . .(See “The 1619 Project” for more examples.)

    So, I’m not sure that UBI is the answer, but I do know that those inclined to scam WILL scam any system they can to get ahead. How many folks have scammed the Disability Benefits system over the years? Quite a few. That’s not a reason to chuck it. We’ll never find a system that doesn’t have weak points that are scamable (word??). I’d be willing to give UBI a try and then see what the data shows. I also would like to give Universal Health Care/Medicare for All a try and see where that goes. I’m banking on the fact that most of us are good at the core especially if the entire system shifts even slightly towards more equality. I think it’s worth a shot.

  26. Peggy: EEEK! I should know better than to do math before coffee. I’ll go back under my rock with Todd.

  27. “Negative income tax” would appeal to more conservatives than “Universal Basic Income”. They love anything that sounds like it undermines income taxes.

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