Do Basic Income Proposals Make Any Sense?

As much of the developed world struggles to address the growth of income inequality, several countries have considered proposals for a guaranteed basic income. There are a number of variations, but the basic idea is that government would eliminate the various forms of social welfare that are currently in place, and would instead send each citizen an annual amount sufficient to cover basic living expenses.

Most of us understand that without economic freedom, guarantees of personal, political and religious freedom aren’t worth much. If your day-to-day existence is consumed with the struggle for survival, the fact that you have freedom of speech is small comfort.

A practical argument for a guaranteed income is efficiency—there would no longer be a need for the massive bureaucratic apparatus currently required to administer social welfare programs, no need to determine eligibility under the different standards for different programs. (Many years ago, conservative economist Milton Friedman proposed something similar: a “negative income tax” that would require payment from those earning above a certain amount, and send remittances to those below that threshold.)

Social science scholars see other benefits. As automation steadily displaces what were once middle-class jobs, receipt of a stipend sufficient to cover basic living expenses would allow people to go back to school, or to train for alternative employment, or work part-time. It would give new mothers—or fathers—the option to take time off to care for newborns; it would similarly facilitate caretaking for gravely ill spouses or parents.

We also might expect that with a lessening of abject poverty, a number of the social ills that accompany privation would improve.

As positive as all that sounds, however, there are reasons why efforts to implement a guaranteed income have fared badly. In Switzerland last year, a basic income proposal on the ballot was overwhelmingly defeated; in 2013 ,the German Parliament debated a similar proposal and rejected it.

The first—and most obvious—negative is cost. Although economists argue about the actual net cost, after savings from eliminating our current expensive patchwork of social programs—any such approach would clearly require tax increases. In the United States, where taxes have become a dirty word even when they are earmarked to support basic services, this fact alone probably presents a politically insurmountable barrier.

Economists and others also question whether receipt of a guaranteed income, no matter how modest, would reduce the incentive to work. There is very little empirical data on that issue; however, there was an interesting experiment in Manitoba, Canada, during the 1970s, called Mincome. It was intended to assess the social impact of a guaranteed annual income, including whether it would cause such disincentives, and if so, to what degree. Apparently, only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay home longer with their babies, and teenagers worked less because they weren’t under as much pressure to support their families, which resulted in more teenagers graduating. However, participants knew the project was not permanent, and it is impossible to know whether—and how—that knowledge affected the results.

There are a number of other legitimate concerns about so drastic a shift in the way we discharge our obligations to our fellow-citizens.

Given American cultural attitudes that valorize work and demean those who rely on public assistance, it’s safe to say that the United States is unlikely to institute a guaranteed income program (it certainly won’t happen in my lifetime). But even if guaranteed income isn’t the answer, it is worth asking what it should mean to be a member of a political community. What are the reciprocal obligations of the citizen and the state?

What do we owe the nation, and what do we owe each other?

If membership has its privileges, what should those privileges look like?

 

 

 

 

 

 

 

 

44 thoughts on “Do Basic Income Proposals Make Any Sense?

  1. I saw a facebook post from one of my ‘friends.’ She and her husband are in the military and they have a 4 month old baby living near Ft. Hood Texas. She wrote overnight that they “FINALLY” qualified for WIC. What I don’t understand is why anyone that gives their life for the military would need federal assistance to feed their family? We need to rethink how we compensate our military families and we need to seriously consider that it’s a disgrace we don’t pay them enough to feed their family. Maybe this basic living income should start there, with those in the military for the decency of an income that covers what they need. Then maybe we can try to arrange to give a basic income like that for those that are severely disabled (like missing an arm or leg or deaf) a basic income so that they too can have some dignity while they survive this cruel expensive world. I know…I’m just a dreamer.

  2. Those are questions that have never crossed my mind. They will require much deep thought over several days for me to be able to answer them. I feel like I just joined one of your classes and this is a test question.

  3. AgingLGrl ,

    We already provide basic incomes for disabled citizens through social security income or welfare. At least as a nation we see that as a necessity.

  4. Yes, Nancy we do provide SS and Welfare but according to what JoAnn tells us, it’s not enough.

  5. I believe the vast majority of Americans want the opportunity to work to earn their wages – fair wages, “a laborer worthy their hire”. There has always been and will always be the hangers-on who will milk the system for what they can as well as leeching from family and friends rather than support themselves. I understand proposals for “a guaranteed basic income” but a basic government giveaway (similar to a coverall Bingo game) is not the answer to our problems. It is simply a distraction from the real problems which are facing this country and are being argued by the current presidential nominees…well, superficially argued. Included on the list of agreements between Bernie Sanders and Hillary Clinton to be included in the Democratic campaign platform prior to his endorsement of her is the increase of minimum wage, breakup the too-big banks and create a 21st Century version of the Glass-Speagall Act which Bill Clinton ended when he signed the bill repealing the Act in 1999. Pass comprehensive immigration reform to allow immigrants access to American citizenship which would add to our tax base. Also close loopholes allowing big business to slash their taxes by putting cash in off-shore tax havens. All of which would help expand and create jobs, people with reasonable wages would spend more on the open market for goods and services and would provide COLA for workers and recipients of Social Security and Disability. I saw nothing on the list to prevent the continuing shift of jobs out of the country. Those who lost their retirement funds due to the 2008 financial crisis are still out of luck.

    I spent the first 4-5 years of my disability being embarrassed and ashamed that from age 57 on I was “not allowed” to work. That was my inner battle trying to accept the fact that I cannot work. I was never paid what I was worth as an employee but never wanted more. This continues to be a problem today; in business and in support staff in government offices.

    Indiana’s Democratic Representative Julia Carson, the child of a single mother often too ill to work, remembered her embarrassing visits to the Township Trustee’s Office to ask for food. When she became Washington Township Trustee she and her staff, on their own time, went into the neighborhoods to make home visits to be assured they were providing assistance to those who needed and deserved help. Those they found were scamming the system were cited and taken to court to repay what they had received. The vast overload of those applying for assistance in recent decades prohibits the possibility of that system being used today. Julia’s grandson, Representative Andre Carson, carries on her fine work and believes those who need and deserve assistance should be qualified and the users weeded out.

    Resolve the problems we are aware of; do not distract from those problems and seek solutions by developing another government giveaway by reinventing government and the American way of life which has been built on our self-respect and ability to earn what they are worth to build this country.

    There will always be inequality in income; there is inequality in job levels and in the ability of workers to perform, but first we need available jobs.

  6. AgingLGrl – no argument with that, since I don’t know anything about what people receive on SS or welfare.

  7. It comes down to whether it is better to live our lives as “We”, or as “I.”

    (For the record, I choose We.)

  8. Greetings Nancy. My wife and I, 81 & 87 receive $1391.00 and $1279.00 a month in SS benefits. She worked longer then I. I think we will receive something over $2.00 each per month with the new increase in SS. How is that compared to a bb player or a fb player?

  9. How do we set a minimum income? If it’s done by the same people who set the Social Security payment, then we could be in trouble. SSA says there is no minimum amount, but if you never worked, or didn’t have enough credits to qualify, you get nothing. The maximum benefit is $2513. The average is $1180. A decent apartment costs around $1000 a month in most cities. Likely, if you’re an average SS recipient, without other resources, you’ll have to scrimp on luxuries like food and clothing.

    Not only does membership have its privileges, privilege has its membership.

  10. You’re right on the mark, JoAnn. I couldn’t agree more. Now I’ll take a broader cut of this fabric.

    “What are the reciprocal obligations of the citizen and the state?” I would argue that basically the citizen is obligated to BE a citizen. To obey the laws and rules, participate in the government, and treat his fellow citizens and the government with respect. The state is obliged to BE a state by protecting the citizens and the land, enforce its laws, and be open to the wishes of the citizens.

    Lately, we have witnessed a breakdown in these basic reciprocal obligations. Way too many citizens do not vote, much less attend meetings or keep themselves informed of their government’s actions. Due largely to talk radio there are segments of the population that have zero respect for government and select members of their community. And we have seen this kind of disrespect seep into our government at all levels. Legislators have deliberately obstructed our system of lawmaking in an effort to make the president fail, or passed laws that represent their personal religious beliefs over the wishes of the people. Some police representatives single out particular members of one group of citizens for brutal treatment. Other government officials sell their obligation to corrupting forces.

    Our reciprocal obligations begin with mutual respect and a large dose of the truth and honesty.

  11. First, I think, we have to decide what is work?

    Do stay at home parents work? Is the political research and debate done here work? Do students work? How about day traders? Has Donald Trump ever worked? How about Warren Buffet, Bill Gates and Micheal Bloomberg? Burger flippers at McDonald’s? Professional golfers doing what others do on weekends for pleasure? The ladies on The View? Wounded veteran full time PT invested in recovery? Habitat for Humanity volunteers? Homeless panhandling or dumpster diving? Sex workers? Bernie Madoff? Addicts in recovery?

    Let’s define work before we define compensation.

  12. Theresa; you are so right, way too many citizens do not vote…or even register to vote. They are usually the loudest complainers about what benefits they are NOT getting and/or what the politicians are doing to them.

    Regarding the Republicans who are indecisive about voting for Trump and those who have hesitantly stated they will not vote for Trump but haven’t said they will vote for Hillary. Voting is a right – it is NOT A REQUIREMENT – even for elected officials. They can simply not vote for either but vote for the state level politicians on the ballot. It IS a secret ballot, isn’t it? I have always doubted that and believe there is a way for elected officials to know if and how you voted. Do you notice when you insert your ballot into the box a number pops up; is that just the count of voters at that time or identifiable information? In 2000, while living in Florida and so many votes were purged after the fact and during the recount; they listed those purged voters as dead, convicted felons, voting in the wrong district, etc. So; how did they learn that individual identifying information during the recount after the election? By the way; hundreds of those who were purged came forward to deny the allegations which disqualified their votes.

  13. OK. I’m going to have to jump in here and say something about “voting is not a requirement even for elected officials.” I believe that elected officials do have an obligation to vote. By running for office they bound themselves to a trust with the voters to represent them in a body whose purpose was to vote on matters of public concern.

  14. A way to direct income subsidies only to those who work is the Earned Income Tax Credit. We need to provide tax return assistance to people so they know they qualify.

    Frankly all these benefits need some geographical adjustments. What constitutes a living wage in one area is starvation in another. Where my son lives he and his wife work full time, make above minimum wage, live in a tiny apartment and still qualify for food stamps. Of course the $13 they receive monthly is nowhere near enough. They “borrow” from us often, impacting our retirement income. If they lived in another area their rent would be half what it is, but the solution isn’t for everyone to relocate to a lower cost of living location.

  15. This is the kind of conversation that fascinates me because I am not sure we have an agreement on the true underlying policy question: Do we care if any of our citizenry lives in complete squalor and/or a state of permanent abject poverty? There seems to be a growing percentage of people who believe we are on our own… all consequences are our own responsibilities.

  16. Greetings T Lentych. I see the problem, and others in this room seem to think the same. It isn’t so much a question about the nere-do-wells, as it is about the huge income and bonus packages that some receive and those same persons see nothing wrong with a working person receiving very little pay for their labor

  17. Irvin,

    The answer is very simple. Just change the system. It’s not that difficult when you see the total system.

    “The history of thought on the SUBJECT OF POWER, as far as I know, has been very little studied by comparison, for instance, with the history of economic thought. Perhaps this is because the concept of power straddles a great many disciplines. The study of power as a TOTAL SYSTEM, therefore, has tended to slip through the cracks between the different disciplines, and never seems to have become a discipline of its own. The various forms of power act and interact on each other so significantly that if the study of power were confined to a single aspect of it, such as political power or economic or social power much would be lost in the understanding of the overall dynamics of the system.”

    “Three Faces of Power” by Kenneth E. Boulding (London: Sage Publications, 1991) page 9.

  18. Here are the US government poverty guidelines.

    https://aspe.hhs.gov/poverty-guidelines

    Does it make any sense to anyone for some to live with less than this while Trump as an example has 5 private jets and a $100M yacht?

    If these were the guaranteed minimum wage levels how many people that you personally know that had a choice would choose to stay there and do nothing rather than work to add to it?

  19. These really are calculated as the cost to maintain the minimum acceptable life style that we can afford to guarantee. Minimum.

    The question is what is the most effective way to administer a system that guarantees nobody lives with less?

  20. Pete; thank you, thank you. OMG; I’m rich, I’m rich and I had no idea. Per the government poverty guidelines my income is $96.62 above the poverty level every month of the year! And I have been in a panic the past two days wondering how to resolve the transmission problems on my 20 year old car.

  21. Richard Nixon is known best as a Watergate conspirator and Red baiter, but what many do not know is that he suggested a GAW (Guaranteed Annual Wage) when president, which was rejected out of hand by the Congress, of course. I think it was a good idea then as well as now. Welfare apparatus is costly to maintain. Just send former welfare recipients a GAW check and let it go at that. I sometimes think Republicans want to keep the welfare system intact so they have something to complain about to get votes. Very well, if it’s so bad let’s end it. Costs? Let’s look at “carried interest” and other giveaways to the superrich and repeal their underlying statutes in an attempt to return to the ideal of progressive taxation. We have lots of money; what we don’t have is the political will to spend it on the people rather than Wall Street.

  22. Wow! Sheila’s question fires the neurons in our brains, has those synapses working overtime, and has our individual protective thought filters on high alert. Personally, I believe we do a disservice to the significance of Sheila’s broad question if we reduce our responses to little more than another Clinton vs Trump session of flinging approved talking points.

    As Nancy said earlier today, this question deserves deep thought.

  23. JoAnn, what puzzles me some is that the govt says that some 14% of us live in poverty. First to me that’s a staggering number and second does it represent flaws in our welfare system or ignorance among possible candidates on what is available or what?

  24. The poverty threshold for a two person family is about $16K/yr. Would anyone here expect their parents to live on that, or a married child, without offering help wherever possible?

    We’re talking here somebody’s parents or somebody’s kids here.

  25. One of the things that Neolibral use of media has brought about is putting the image of the welfare queen on the face of poverty. That’s very effective advertising on their part. It allows them to pay minimum wage to workers because everyone knows that the government will supplement that up to welfare queen standards.

  26. Pete; I’m surprised the number is that low. I don’t remember, in all of our conversations on this blog or news reports of poverty levels and raising the minimum wage, references to the almost weekly price increases on everything, especially food items and clothing. Neither of which is a luxury expense. I know that gas is going up and down in price, sometimes with only hours between the changes. I have noticed in traffic and in parking lots, and I believe this applies to today’s issue of income, body damage on dozens of cars everywhere. Either people are not reporting property damage accidents to insurance companies due to high deductibles which they cannot pay or they do report the damage and use the insurance money for other bills and let repairs go. This poses the question, do they even carry vehicle insurance? I renew my registration and plate by mail; my vehicle coverage is on the form but no proof is required for renewal.

    Much of the middle-class has dropped to barely above poverty level; they cannot afford maintenance on homes or vehicles, they wear wardrobes till they wear out, they shop discount and thrift stores and have cut food budgets or are spending the same amount for lesser quality foods.

    Members of Congress and probably most state level elected officials have voted themselves raises to keep up with these rising costs. Giving little or no thought to constituents who do not have the option of arbitrarily raising their income to maintain their standard of living – especially those living at the low level standards. Laughing about my being “rich” actually made me realize that during my years of employment, my income was never as “high” as it is today but my struggle is more difficult. My last working day was April 11, 1994.

  27. JoAnn, you tell it for all of us struggling on a retirement income that was slashed by the 2008 recession, limited by low social security payments, and the restraints of old age.

  28. Another Neolibral advertising success was labeling Social Security and Medicare as Entitlements and the SS Trust Fund invested in US Treasuries as required by law as the theft of it by government.

    They’ve established a screen of lies that only some can see through.

  29. From Ken late last night.

    “The premise of the bureaucrats seems to be, how many we serve rather than how well we serve them.”

    By “bureaucrats” I assume he’s using the Neoliberal definition of public servants.

    Public servants pledge to serve all of the prople. That’s absolutely inherent in Democracy.

    That’s the point that sunk the Mitt Romney ship.

  30. One of the things that free market economies do besides creating poverty is to herd the poor into ghettos where they only bother each other and are out of sight of those who have the resources that the poor were deprived of. (Similar to putting Indians on reservations.)

    Very convenient unless you are poor and trying not to be.

    Now we know that free market economies also produce wealthy people and can, but not always, produce a middle class.

    So free market economies need help to adequately serve Democracies in which everybody counts.

    That help is called regulation and regressive taxation.

  31. Irvin, thanks for the SS info. I calculate your combined benefits to equal $32,040 per year. You aren’t rich, but that (in my opinion) is not a bad amount. It is certainly more than many young families in our state and country earn annually.

    Of course, we all have heard that two can live cheaper than one. If one of you passes away the remaining spouse must try to live on far less money and that is why so many elderly widows live in poverty.

    Pete brought up the Federal Poverty Standards. Those have been ridiculously low for decades. We must decide what a “realistic” basic cost of living is and review it annually.

    The same needs to happen with the “minimum wage”. No one anywhere in this country can live on $7.25 per hour.

    A basic cost of living could be computed and adjusted according to the “actual” cost of living regarding what locale a person resides in. Medicare already adjusts their payments for medical services based upon where the services are provided. The federal government compiles these statistics regarding the average cost of services and already collects stats regarding the cost of living based on location.

    Ken has mentioned before that we punish the poor for trying to work. If they earn just a little bit more than the federal poverty standard, then we yank away their subsidy. While they were trying to improve their lives by working, our government decided that they must stay poor. This is why so many single mothers cannot afford to work. We definitely have a broken system, but until the general public finds compassion for those less fortunate, I don’t see any improvements happening any time soon.

  32. “If they earn just a little bit more than the federal poverty standard, then we yank away their subsidy. While they were trying to improve their lives by working, our government decided that they must stay poor. This is why so many single mothers cannot afford to work. We definitely have a broken system, but until the general public finds compassion for those less fortunate, I don’t see any improvements happening any time soon.”

    Bravo! That’s exactly the problem.

  33. The definition of poverty used to be (and still is in much of the world) that you died. You were not entitled to life.

    Fortunately we now have what are called developed countries that can afford to redefine poverty as you can live but quite uncomfortably with no security.

    That’s definitely a big improvement but a long way from bragging rights.

  34. I love this post. I read a piece in Medium or Vox that discussed just this topic, (apologies for not remembering ) based on the projection that we need increasingly fewer people to do the jobs that are available here in the United States. He discussed what “work” really means and how it makes us feel fulfilled (or that may have been a reference to another article.) The author was crowd sourcing his income as a journalist as well.

    I really like the idea, but I remember feeling that it wouldn’t fly in the US because of our “work ethic.” This was all happening right before the Swiss referendum on basic income, which lost.

    The question that the commenters seem to be focused on is what is a basic income. I am sure that a basic income in the Indianapolis area would leave one on the street in the San Francisco Bay Area. A basic income should cover more than just food, housing, and utilities; it would appear that what we are paying in Social Security doesn’t even cover that based on the many articles written on how to stretch one’s food budget to feed a family of four, that didn’t appear to have much joy in them.

    Now that I am retired with a pension. I do work because I volunteer and I would feel my life were lacking if I didn’t have that. The people that I work with who are paid don’t really make enough money to live on in this area.

    I would like to see a serious discussion of this in the media but I can’t see it happening any time soon.

  35. One of the things that is in the news now is that wages are going up. Terrible news for businesses who have now lost the advantages of high unemployment. They have to actually attract workers. Next thing that you know they might have to give benefits. Thank you President Obama.

    A corollary consequence is that productivity is going down. Why? Productivity is not what it sounds like. It’s the cost of labor divided by the total costs of production including like executive salaries, energy, and raw materials.

    In other words the extreme of high productivity is slavery and colonialism.

  36. MaryBeth, your experience mirrors mine. I can’t tell you how many people that I know who work for free. We used to call it giving back.

    Sheila’s one of them.

  37. Mea culpa. I’m backwards I just realized. Productivity is output over input of course. So labor productivity is the value of goods produced over the cost of labor not the other way around.

  38. Pete,
    You submit frequent entries to this forum which prompts my question, “Mea culpa for what?”

  39. “Productivity is output over input of course. So labor productivity is the value of goods produced over the cost of labor not the other way around.”

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