(Communities throughout the U.S. are experimenting with social programs that give a “guaranteed income” to some residents with few or no strings attached. An economics professor says universal income could be a more efficient use of taxpayer dollars as long as it replaces many of the more than 100 welfare programs already out there.
Most of the programs are funded by taxpayer dollars and are generally described as “universal basic income” and “guaranteed income,” which share many characteristics but differ slightly. Universal basic income programs are generally open to everyone in the community. Guaranteed income programs target a specific sector of the population, often lower-income individuals.
A 2019 study by the University of California-Berkeley’s Goldman School of Public Policy used three features for its definition of Universal Basic Income. It provides “sufficiently generous” cash benefits without other earnings; it doesn’t phase out or phases out slowly as earnings increase; and it’s available to a large percentage of the population rather than just targeting a specific group, such as single mothers. The authors of that study also noted there are other definitions of such programs.
Many of the pilot programs around the country don’t meet those criteria.
An Oregon nonprofit called the Black Resilience Fund has started a three-year “income guarantee” program that is open only to Black people who are 18 years or older and live in Multnomah County. The program starts in December and would provide monthly payments of up to $2,000 for adults with three or more children. The Oregon Community Foundation provided a $100,000 grant for the program.
The city of Ann Arbor in Michigan has proposed using $1.5 million of its American Rescue Plan Act money to fund a universal basic income pilot program. It would provide 100 families with $500 a month for three years. The goal, the city said, would be to establish a more permanent program.
A Universal Basic Income program that replaces the costs associated with operating the more than 100 welfare programs already in existence – such as the Supplemental Nutrition Assistance Program (SNAP) or food stamps, Temporary Assistance to Needy Families (TANF), and Supplemental Security Income (SSI) – would be welcomed, said Antony Davies, an associate professor of economics at Duquesne University.
All of those programs have their own taxpayer costs associated with them above the actual benefit costs, such as administrative costs, maintaining offices, and paying employees and contractors. Consolidating those safety programs into a UBI program could be beneficial, as long as consolidation happens, Davies said.
“Universal Basic Income is, at once, an excellent and dangerous idea. We have evolved a complicated system for addressing poverty in this country,” he said.
“At the federal level alone, there are over 100 separate poverty programs, each of which with its own rules and requirements. The programs interact in perverse ways so that can create unintentional poverty traps wherein the poor are penalized for increasing their earnings.
“But the danger of UBI lies in placing it on top of existing poverty programs,” Davies said. “Doing this simply adds one more program to the more than 100 that already exist. And if 100 programs haven’t solved the poverty problem, we should be asking hard questions as to whether we actually need them.”
Elon Musk, the CEO of Tesla Motors, has previously addressed some issues regarding such programs.
“There will be fewer and fewer jobs that a robot cannot do better. What to do about mass unemployment? This is going to be a massive social challenge. I think, ultimately, we will have to have some kind of universal basic income. I don’t think we are going to have a choice. Universal basic income – I think it is going to be necessary,” he said at the World Government Summit in Dubai in 2017.
“These are not things that I wish would happen. These are things that I think probably will happen. I think some kind of basic universal income is going to be necessary.”