August 31, 2014

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Tuesday, June 17, 2014

Universal basic income could lower poverty

Flickr/tobym

Flickr/tobym

In a Jan. 2014 report, the Center for American Progress found that 86 percent of Americans think the government should use its resources to fight poverty, and 7 out of 10 Americans support the goal of reducing poverty by 50 percent over the next 10 years.

With numbers like those, it’s safe to say that poverty in the United States is universally accepted as one of the most urgent issues facing Americans today. And a universally accepted problem requires a universal solution: universal basic income.

A universal basic income requires very little. It simply means that each month, the government would send every American between ages 21 and 65 a check in the mail just for being alive. That’s it. The individual’s presence in American society gives worth to the country both economically and socially, and a universal basic income proves that value. But in actuality, it would do many more important things.

First, it’s important to reiterate that a check would be sent to each and every American, rich or poor, working or non-working. Second, the universal basic income movement has already been sweeping through Europe: The initiative will be put before Swiss voters in an upcoming election, so this idea is not new.

Providing a basic income would not only reduce poverty, but it would also provide Americans with a stable standard of living. If a citizen is out of work, they’ll still be able to support themselves while looking for employment. And sure, this might incentivize some to leave the work force for good. However, a minimum basic income would provide just enough to live on and not enough for most to live the way they’d like. So a universal basic income program would be implemented to help end poverty while preventing the creation of a nation of non-workers.

And the number of people who could decide not to work is insignificant in comparison to the benefits given to the majority who would continue. Those receiving a steady—and maybe increasing—paycheck wouldn’t have to worry about losing their UBI check. Having another source of income as a cushion allows workers more wage-bargaining power and a greater ability to demand better working conditions.

Additionally, unlike with welfare, housing vouchers and food stamps, how these federal dollars are spent is completely up to the recipient; they are not federally controlled. This means the money becomes more valuable to the purchasing-powerful recipient and the economy as a whole.

Maybe the strongest argument in favor of a basic income is the stagnation of wages and high unemployment rate in the United States. People are struggling to find jobs, and many of those who are employed are finding that the market isn’t providing them with a proper standard of living. A universal basic income would help alleviate the burden on the working poor as well as low-income families.

The idea of a universal basic income attracts appeal from the left and right. The left likes the idea because it works toward an egalitarian society by reducing inequality and eliminating poverty. The right likes the idea because a high enough basic income would eliminate the need for government benefits like the Supplemental Nutrition Assistance Program and unemployment insurance.

Obviously, the cost for implementing a basic income would be tremendous. Providing just the 179 million working-age Americans in 2012 with a basic income that is equivalent to the poverty line would add up to over $2 trillion. But eliminating government benefits—which add up to approximately $750 billion, or $1 trillion after factoring in state programs—would provide some of the money necessary to pay for it. Automatic taxes on the basic income would provide revenue as well.

But, the government doesn’t have to go as far as providing an income equivalent to the poverty line. Matt Bruenig, a blogger for Demos.org, used Census data to calculate that a $2,920 annual check to every American (not just working-age) would cut official poverty in half and cost significantly less—about $907 billion in 2012.

There are different ways to implement a universal basic income. But the point is, though it might be costly and require some planning, it’s a realistic program. It might sound new, unorthodox or over simplistic, but that doesn’t qualify it for critical dismissal. And because it draws praise from the left and right, it might end up being easier agreed upon than other already-implemented nationwide programs like Obamacare. It is possible to fix poverty in this country and it really could be as easy as mailing everyone a check.

Jillian Correira is a Collegian columnist and can be reached at jcorreir@umass.edu.

Comments
13 Responses to “Universal basic income could lower poverty”
  1. Genghis Khan says:

    It must be nice to be generous with something that doesn’t belong to you. I.e., other people’s money.

  2. godenich says:

    An uncondictional universal Basic Income(BI), adjusted to inflation and tied to an economic indicator like GDP is worth considering as a replacement for the current welfare state. It may maintain the economy during recession by ensuring a floor of consumption during a recession. Businesses, large and small, may face less risk from drops in demand due to cash-strapped consumers. It may be viewed as consumer/producer insurance, as well as social insurance or unemployment insurance. It may mitigate the paradox of thrift and allow government to tighten its budget during lean times. It has less administrative overhead costs and reduces government bureaucracy. It is worth considering as a comparable alternative to QE seignorage/inflation and higher taxes. It requires less governmental intervention during recessions once implemented. It encourages entrepreneurial risk-taking. It is consistent with social liberalism in classical liberal thought if implemented as a voluntary choice of civil society that is executed by government on a society’s behalf to safeguard its economy.

    However, it may be objectionalble to the school of thought which advocates social darwinism and monopoly. It may also be objectionable to extra-national global business in a nation-based labour and trading market.

    It concerns me that the economic benefits of a BI are not more stressed. It misses the concerns of an imporatnt audience.

  3. Justin says:

    Congrats Julia… you regurgitated a Boston Globe article from a week ago. Really original thinking!
    A far left colleague of mine recently waved this in my face and exclaimed “even Republicans like this”… as if a couple conservatives speak for the whole party.
    Basic minimum income… no. Not the best idea. What would save us billions and, more importantly, get people out of poverty are work-for-welfare provisions and a better “packaging” of the services the poor may require. A basic guaranteed income goes too far to encourage people to not work. However, if we could calculate what a person actually needs to get themselves into a better position- the data shows that a lump sum (with the appropriate safeguards) would do more to get people out of poverty and help them from falling back into it.
    What I find interesting is the insistence that we need to pay MORE to get people out of poverty. Yet, the poverty rate, and rate of spending on these programs, continue to grow together. Curious, no? The $1trillion figure you used is accurate for current spending. To suggest $2T to make everyone happy is just lazy.

  4. Genghis Khan says:

    And where will the money for this magical program come from?

    This is nothing but pure “To each according to their need, from each according to their ability.”

    Funny, the dozens of times various flavors of Marx have been tried, it’s never worked. Thus proving the cognitive inability of the Left to assimilate new information.

  5. mason says:

    This is a very interesting idea.

    However there are interesting problems. What about individuals who may need higher levels of income, such as the disabled. Also welfare is currently catered by the size of the family;the larger the family size the higher amount of money need to meet needs. Likewise with the disabled and due to some impairments of the disabled, existing programs would need to exist like housing assistance.

    What welfare programs are being cut? All of them including general welfare,(TANF) and food stamps may work with monetary replacement but what about housing assistance, what about economic grant, programs that focus upon social-economic problems like crime and poverty by seeking to build resource centers, create tax incentives, support/counseling services, block grants and so on. A significant amount of spending for the lower class and poor is through economic policy.

    Also what would the benefit on inflation be? If a large amount of money was introduced to the economy as discretionary spending>

    What about taxes? What is the purpose of giving the affluent additional income, would there be an increase in progressive tax to offset the amount distributed to them. What about existing tax policies which serve as economic assistance; housing interest deduction,EITC, et cetera.

    I think in theory it sounds good but in practice would be chaotic.

  6. mason says:

    impact on inflation*

  7. Tyler says:

    Ahhhh yes, the innocence of youth coupled with academia.

  8. Allan says:

    Excellent article. Of course the money comes from the people and goes to the people (and not to the banks or the corporations). And it will be saved or spent by the people and thus a flow of money goes round society or is there for lending. It’s an idea whose time has come. It will re-energize a dying system and we so badly need our communities and our individuals re-energized.

  9. Genghis Khan says:

    @Allan: The money comes from some people at the point of a gun, and to people who haven’t worked for it.

    How many times does Marxism – a philosophy developed by a man who never worked a day in his life – have to fail before it penetrates your collective skulls that IT DOES NOT WORK?

  10. Lens says:

    I like this idea and the idea of education being provided fairly by the government. What this country needs is a form of Social Capitalism. There’s a basic living income for all and higher education is fully provided by the government. You would earn more resources based on merit you put in the education time and work you earn more but every starts out fairly. Teachers, Engineers, the Medical field and Psychologists other professions , that help the nation would naturally earn more. The top earners would deserve their resources but the amount earned would not be so staggeringly wide as it is today. Jobs will be created by the needs and wants of the people not the corporations. If the country TRULY wants everyone working at their full potential a system with these values similar to these would be in place. Social Capitalism would be a more advanced human system while Capitalism is what I consider a Darwinian animal like system.

  11. Genghis Khan says:

    At this point, Len, I look forward to the coming civil war where we scrape socialist vermin like you off America’s shoes and back into the dustbin of history where you belong.

    How you people can subscribe to an economic theory that has NEVER WORKED IN THE HISTORY OF MANKIND, one that was written by a man who squandered his family wealth and died heavily in debt, having never worked a day in his life, just proves you people are mentally ill.

  12. Genghis Khan says:

    I want to apologize for my intemperate words. The level of invective was uncalled for.

    But… over 100 million people were killed by Marxists of various forms in the 20th century, all in the name of a man who – as I said – never worked a day in his life and spent his family into the poorhouse?

    How many times does socialism – “From each according to his ability, to each according to his need” have to fail in this world in the quest for this great and wonderful utopia before it penetrates your minds that IT. DOES. NOT. WORK.?

  13. Kill Genghis Khan says:

    They said Obamacare couldn’t be done, and it was, so this should be extremely easy to implement. Marx was a great man, many people in United States don’t work as it is, so they are no different then Marx. People rent there houses out and live off of that income, people lend money and live off of interest, people retire and no longer work. Many wives don’t work. Its no different from whats already being done by them. The only difference is that everybody would now have the same privaliges. The current system doesn’t place any worth on a person, but only by the work they do. People are treated like dogs by the government and expected to beg and compete for a job. You can’t argue about where the moneys going to come from either because money can now be created digitaly and easy. Anybody can now mine their own coins with a laptop and distrbute them freely across the internet. This money can be created within a matter of hours.

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