Ideology, Meet Evidence

A few days ago, I shared a talk I gave to the Indianapolis Council on Women about the UBI–the theory behind efforts to replace much of America’s dysfunctional safety net with a Universal Basic Income.

There is, as I noted in that discussion, hysterical resistance to such a drastic change. We are, after all, a country that is politically unable to provide even universal access to healthcare. The cost of such a benefit would require us to look critically at America’s multiple wasteful subsidies  and it would require the Uber-rich to pay their share of taxes.

Cost is a legitimate concern. Less legitimate–and far more potent–is the belief that poor people are “takers” who would cease productive labor, neglect their kids, and spend their stipends on booze and drugs. I realize that most of the ideologues who subscribe to this theory are impervious to evidence, but evidence contrary to that belief continues to accumulate. I cited the results of previous pilot projects in the talk I referenced, and subsequently, additional evidence has emerged.

After getting $500 per month for two years without rules on how to spend it, 125 people in California paid off debt, got full-time jobs and had “statistically significant improvements” in emotional health, according to a study released Wednesday.

The program was the nation’s highest-profile experiment in decades of universal basic income, an idea that was revived as a major part of Andrew Yang’s 2020 campaign for president.

Cynics had predicted that free money would eliminate the incentive to work, creating a population dependent on the state. The experiment in Stockton, California that yielded these results was an effort to test that thesis. It was funded by private donations, including a nonprofit led by Facebook co-founder Chris Hughes who has been a longtime supporter of the UBI.

Run by a nonprofit founded by former Stockton Mayor Michael Tubbs, the program included people who lived in census tracts at or below the city’s median household income of $46,033.

A pair of independent researchers at the University of Tennessee and the University of Pennsylvania reviewed data from the first year of the study, which did not overlap with the pandemic. A second study looking at year two is scheduled to be released next year.

When the program started in February 2019, 28% of the people slated to get the free money had full-time jobs. One year later, 40% of those people had full-time jobs. A control group of people who did not get the money saw a 5 percentage point increase in full-time employment over that same time period, from 32% to 37%.

“These numbers were incredible. I hardly believed them myself,” said Stacia West, a researcher at the University of Tennessee who analyzed the data along with Amy Castro Baker at the University of Pennsylvania.

The money came once a month, and was distributed via a debit card. That allowed the researchers to track how people spent it. The largest expense each month was for food, followed by sales and merchandise, which included purchases at places like Walmart and Target, which also sell groceries. The next highest categories were utilities, automobile (gas and repairs) and services. Less than 1% of the money went to tobacco and alcohol.

Given America’s political culture, which valorizes individualism and looks askance at any suggestion that social support might increase–rather than disincentivize–individual ambition, the prospects for a UBI are pretty dim. But there are some signs that opposition may be softening.

Still, guaranteed income programs seem to be gaining momentum across the country. More than 40 mayors have joined Mayors for a Guaranteed Income, with many planning projects of their own. A proposal in the California Legislature would offer $1,000 per month for three years to people who age out of the state’s foster care system. And in Congress, Republican U.S. Sen. Mitt Romney of Utah has proposed expanding the child tax credit to send most parents at least $250 per month.

We’ll see how the evidence accumulates…..

 

31 thoughts on “Ideology, Meet Evidence

  1. Christine Amanpore spoke with the study creators this week. Go check out the YouTube of this conversation.

  2. “After getting $500 per month for two years without rules on how to spend it, 125 people in California paid off debt, got full-time jobs and had “statistically significant improvements” in emotional health, according to a study released Wednesday.”

    This country will not even agree to raising minimum wage from $7.25 per hour to $15 per hour over a period of time to working people. There will always be those who scam the system to get anything free that is offered, especially money. Across the board handouts are no more a solution than across the board cuts in social programs such as SNAP. America’s “dysfunctional safety net” is and always has been poorly operated due to lack of investigation of applicant’s actual situations. Now appears to me to be a poor time to be talking about UBI for the entire nation; it may work in some small, select pockets of poverty and low-income families once the Pandemic and current economic and jobless situations have recovered. But not without due diligence in investigating individual situations at the onset; a costly and major undertaking in itself.

  3. The outcome was as predictable as studies when gun controls are implemented to reduce the number of guns in unstable hands. Imagine the outcome if we decriminalized marijuana at the federal level and eliminated criminal records associated with possession.

    Can you imagine the outcome of the cost of healthcare for the entire USA if we had universal healthcare (single-payer)?

    The outcomes are predictable — what’s lacking is political will because we are an oligarchy where permission must be granted for systemic change to the profit-making systems they arranged since breaking away from the Royals back in 1776. 😉

    As long as investors and oligarchs are enriched by unfettered capitalism, so should its citizenry and workers. If the politicos want to grant subsidies to large industries and pay farmers not to farm, why shouldn’t every American receive a UBI below a certain income level and then also peg ALL salaries to performance of the stock market, dividend payout ratio, GDP growth, CEO salary growth, etc.? Come up with a composite index which everyone can see and determine what their salaries will be.

    As the American Rescue Plan showed, political will is the only obstacle, and they don’t really represent Americans, now do they? 😉

    Not a single republican voted to help Americans during the worst pandemic in our history largely made worse by their own president and party. Let that sink in.

  4. When the economic system a country has used for centuries fails a larger and larger percentage of its population there will indeed be a push for radical change. Those who oppose such change, and not surprisingly the ones benefiting from the existing system, will always trot out ideology as the reason to not make changes. For those wanting change, it isn’t ideology driving their cause; it is hunger, homelessness, unemployment, lack of opportunity and fear. Added to this struggle to adapt and change are diminishing resources, overpopulation and environmental degradation.
    It will take more than sound bites and slogans to weave our way forward yet keep our principles and humanity.

  5. I was just having an e-mail discussion with my British-based publisher this morning about this very topic. She is a very progressive thinker and has few kind things to say about Boris Johnson (The Blond Hamster) and Maggie Thatcher. We agreed that the money marriage between her and the Reagan/Regan regime was nothing more than an ideological disaster that fostered the lies you mention today.

    In short, we agreed that everything “conservatives” or fiscal hawks touch turns to crap. Funny thing about capitalism and capitalistic societies… It takes MONEY IN THE HANDS OF THE CONSUMERS to make it work. John Maynard Keynes got it right and all the Thatcher/Reagan rubbish merely sowed the seeds for the destruction of democracy.

    Economic parsimony leads to the idiot level competition between socio-economic groups; you know, ethnic rivalry, racism and elitists v. everybody else. The BIG LIE began with Reagan. It is still being perpetuated by today’s elected Republicans – even as their constituents support things approaching the UBI.

    That said, I think Biden and his crew have got their camel’s snout under that tent of UBI and even universal health care. The more people see, learn and experience the benefits of this bill, the quicker they will favor the reversal of the obscene tax cuts for the rich and get them rescinded. At least that’s how I hope it works as it does in my personal utopia.

  6. If we are to be called upon, as JoAnn seem to suggest, to look into the needs of the individuals who might benefit from legislation that impacts the treasury that belongs to all of us, how about starting with the ultra-rich who keep getting major tax breaks and never seem to let it trickle down to those who need it most? Them that has just keeps gettin’ while those who truly need it don’t even get the crumbs. Here’s hoping the Covid-19 relief bill that is touted to lift so many families out of poverty gets extended beyond one year and is made permanent. That will benefit all of us.

  7. I would have some tremendous concerns about how UBI would be implemented. One of these days, conservatives are going to figure out it’s the perfect Trojan Horse.

    The argument goes:

    1) We’re going to provide everyone UBI. You all get $1,000 per month. Aren’t we great? Look how we help the working man!
    2) To pay for UBI, we’re going to have to cut some other programs. Don’t worry, they’re terribly wasteful. Got to worry about the debt/deficit you know.
    3) *proceeds to remove WIC, SNAP, Housing Assistance/Subsidies, job training programs, outreach efforts, arts funding, etc.* After all, why do you need any of that when we’re giving you all this money!?
    4) People who needed the help, now get significantly less benefit than they were receiving before.
    5) Final – successfully removed way more than $1,000 per person in exchange for $1,000 per person.

    Careful what you wish for. We all know a lot of our elected officials aren’t go to be very good at seeing the long con coming and or will be in favor of it.

  8. Evidence? An “experiment” with 125 people in one uniform place should now be implemented in a wildly diverse country of 330 M? Really?

  9. Yes, Lester. Really. There’s no such thing as a “uniform” place. Remember individualism?

  10. “Them that’s got shall have
    Them that’s not shall lose….”
    Them that’s got have it arranged so that they will keep on getting, at anyone else’s expense. Not such a great lyric, but that’s how it is.
    Every culture has its mythology, and ours is the mythology of individualism. Elizabeth Warren expounded on this during her campaign, beautifully.
    It may be that both the rescinding of the massive tax breaks and UBI are on the way, and happily so, imho, but do not hold your breath. Ironically it may turn out that the excesses of the prior administration, and there were soooo many, will have shown/paved the way for a more humanitarian approach to government.

  11. Hey, Lester, reading is fundamental. Please note the final sentence in the 3rd paragraph and the final (albeit incomplete) sentence in the essay and then explain to us where Sheila suggests that we implement this across the entire country.

    Thanks in advance for sharing your wisdom. /s

  12. Dirk_Gently and Lester Levine; thank you for understanding the message I was trying to get across. I have held working positions where I have seen first hand the blatant abuses of all “welfare” systems and public assistance and seen those who are in need, denied. At one time I was in dire need of food stamps; take-home pay was $64, custody of five children and given all family bills in the divorce. I applied and said it was only temporary; when the “ex” began paying child support and I had a slightly better income (after 4 months), I returned the monthly food stamps with a letter thanking them and asked my name be removed, the next month I received food stamps again, again returned them with a letter thanking them and asked my name be removed. The 3rd month I took the food stamps and went to the office to return them in person. The clerk was very confused and finally accepted the food stamps and ended my qualification to receive them.

    Years ago, Democratic Washington Township Director Julia Carson (later U.S. Representative) and her staff donated time to knock on doors to check on families receiving Township money and assistance. Those they found unqualified were issued citations and ordered by the court to refund the amounts they had received. Were investigations done at application, the “takers” would be removed before receiving benefits actually needed by so many others.

  13. UBI could ignite the biggest “entrepreneurial” wave of grifters, hackers and “corporate” helpers we have ever seen. Creativity unleashed – not to mention the Russians, North Koreans, etc.

    Silver bullets tarnish VERY quickly….

  14. What-ifs are fun but it’s better to avoid grabbing a solution before considering all possibilities.

    What if money was invested in the combination of public education being extended to the point where everyone gets either a bachelor degree or a trade school diploma and health care was free. Perhaps child care too.

    That seems to me to hit closer to where the problem is. It’s no longer viable to live above the poverty line with high school education. We can’t afford our health care system. People who have kids and have to work can’t afford child care.

    What would it cost us to invest our way out of what doesn’t work today?

  15. No, Lester. UBI will do no such thing. Grifters are already there with the 1% tax dodgers. Hackers don’t give a shit about anything except screwing up every system. The corporate helpers are called Republican politicians.

    Oh, and there are no silver bullets. What there are are conscientious citizens willing and able to earn their own way given half a chance. THAT is what UBI means. Oh, and people receiving UBI spend every penny of it, thus adding to the cash flow in the economy.

    It’s not that complicated.

  16. Yang’s idea was not new but was current, and there may be better ideas. Instead of sending a stipend to every American, how about adopting programs that would relieve Americans of the bills they have to pay? (See single payer coverage, living wage protocols etc.) – without such drains on income there would be substantial remainders for those with jobs and Yang-type stipends for those without. Or Social Security for all from date of birth, payable to parents of the newly born until age 18, at which time payable to such teenagers for, perchance, further education. There must be several ways and means other than a Yang solution to a fair and equitable distribution of the fruits of our economy other than the present one which rewards investment over labor, a system rightly objected to by both Marx and Lincoln.

    Administrative nightmare? No more so than the present nightmare supplemented by a poverty rate the highest in Western countries, a poverty rate that would disappear with a fairer distribution of our economy’s spoils via a newer version of capitalism which distributes a fair share of its bounty to ALL its stakeholders.

    Pie in the sky? Can’t be done? Wrong. Some version of the above means of fair distribution of an economy’s income and wealth in a capitalist system is already and successfully in practice in Germany and the Nordic states, contrary to what Koch and Wall Street propagandists, myth-makers and other status quo exponents would have you believe, so let’s elect those in 2022 who would expand on Biden’s start in that direction with the bill he signed yesterday.

  17. JoAnn,

    It terms of the minimum wage increase to $15, the only proposal on the table is an immediate increase to $15 (not phased in) and that same minimum applies if one is living in Manhattan or Wyoming. Once (if?) the progressives pushing the $15 minimum wage start being open to reasonable compromise (such as phased in increases), increasing the minimum wage will have a lot of support. Unfortunately, we have this “all or nothing” approach to politics today that doesn’t allow for compromise.

  18. The weightier the evidence the better the chances for broad acceptance. How about an incremental, test-driven implementation (like Stockton) where UBI is piloted in several communities, evaluated and, if the evidence suggests, expanded (wash, rinse, and repeat). In a few years we would know whether the program achieves its goals, and if so, be in a position to halt many of the welfare programs that clearly don’t. Making the income universal removes the stigma of welfare. This approach requires a disciplined method for analyzing results, but minimizes the risk and cost and employs the scientific method. Wouldn’t it be sensational to verify that poor people, given the means, provide for their personal welfare more intelligently than the government. Wouldn’t it be colossal to finally know how to help people in a meaningful way!

  19. Paul; I believe you are referring to the recent attempt by the federal government to include raising the minimum wage to $15 per hour which should not have been included in the Stimulus bill. My reference to “the country” was referring to the state-by-state decisions to maintain the $7.25 per hour rate; and yes, many employers do pay higher salaries than $7.25. The median income and cost of living varies from state to state; a federal mandate to immediately raise minimum wage to $15 per house will never get past the House as Representatives would be considering state-by-state and city-by-city median income levels and profit levels of the businesses they represent. It is all relative; my friend in Santa Clara, CA who receives a monthly Social Security check in the amount of $1,800 is actually no better off than I am in Indiana with my $834 monthly check.

    Wasn’t it Albert Einstein who stated, “Everything is relative.”?

  20. I am not sure this California experiment in UBI can be considered as “evidence”. The sample size (125) is minuscule.

    As usual there all kinds of excuses why we should not raise the minimum wage which has been stuck at $7.25 an hour since 2009. The Standard and Poors 500 Index (S&P 550) was 948 in 2009 and the Dow Jones Industrial Average (DJIA) was 8,886 in 2009. At the end 0f 2020 the Standard and Poors 500 Index was 3,732 and the Dow Jones Industrial Average was 30,392.

    The Standard and Poors 500 Index increased 2.94 times and the Dow Jones Industrial Average increased 2.42 times. If the minimum wage had kept pace with the S&P 500 the minimum wage would now be $21.32. If the minimum wage had kept pace with DJIA, it would be $17.55.

    That trickle down does not seem to be working.

    What is on the table is $15. an hour minimum wage.

  21. Ooops; of course my statement on line 7 in my 12:38 p.m. comment should read $15 per hour, not “house”.

  22. Freud said that there are 2 things people need for meaning “to love and to work”. I have to say that some work has little to no meaning for people. Even so, I doubt that most of those receiving a UBI will spend it foolishly.

    I hope our country does more pilot projects not only in blue states but red states. However, I doubt red states will do such a thing. I suspect UBI will be a state by state experiment before it ever reaches the feds. A majority of states will have to have a UBI before the fed would ever create such a bill.

    Something has to change because automation is leaving many without a decent union job.

    It’s too bad that corporate leaders won’t undertake a pilot project for a UBI. Of course, their CEO’s would have to agree to a markedly lower salary.

    I have a basic income called social security and pension. I use it to pay my bills. I’m saving for a car. I don’t drink much alcohol. Because I was able to pay off my mortgage, I can go out to eat some and when I do, I leave a healthy tip for the waiter because they rely on tips for a healthy wage.

    Of course I worked for 45 years to earn my UBI and also am lucky enough to have 2 retirement IRA’s.

    I am aware that not as many as me are so blessed. I am also aware that unlike millenials and the current generation, I did not have a huge student loan weighing on my financial back. I am guessing those unemployed students might use the UBI to pay off student loan debt.

    Sooner or later our country will have to decide if we want to be a country of very wealthy and very poor or a country that care enough about its citizens to ensure that all have the income they need for their basic needs.

  23. JoAnn, one key point to the UBI is that there need be no complicated and expensive bureaucracy to determine who gets it. EVERYONE would get it. This means there would be no stigma associated with receiving it, and no arbitrary cutoff value which may disincentivise workers. Basically, means-testing items like this is wasteful and stupid. If you do want those who make more to not get it, then you rely on an existing bureaucracy, and claw it back in taxes.

    This all applies to the recent handling of the stimulus checks, by the way. The reduction of the top end from $200k/household to $160k/household was beyond stupid. It saved a negligible bit of the money for the overall bill, and means that millions of households who got the previous checks (under Trump!) now won’t, and many of those households may really need that money.

    Lester, the study done in California IS evidence, just like all the other studies done in this and every area of scientific inquiry. Putting quotes around “experiment” doesn’t invalidate the study.

    JoAnn again, I keep seeing Republicans describe the minimum wage jobs they had while teens growing up. They do not realise that their stories are actually evidence for the current plan to raise the minimum wage. (It would be hilarious if it weren’t so deadly serious for millions of people in your country.) They fail to realise that the if the minimum wages they describe having in the early 70s (for example) had simply been raised at the cost of living in the intervening years, they’d be well over $20/hour now. By rights, it should be MORE than $15/hour.

    And just to add to this, many places in the U.S. have already increased the minimum wage to $15/hour. There were concerns that this would hurt small businesses and cause job losses, of course. Studies in those areas, though, have found just the opposite. This is pretty easily explained. First and foremost, when the less fortunate get money, they almost immediately put it back into the economy, which is good for business, especially small ones. And, while there may be job losses, a bunch of those losses will be people giving up one of their multiple jobs since they no longer need to work 100 hours per week to get by. This increases mental health and well-being of those people and their families, which is a REALLY good thing.

  24. I really want to send the UBI to Trump, Elon Musk, the Kochs, etc…..y’all said “universal”…

  25. Ok, so Lester has a point. This is a VERY limited experiment with a sample size that is too small and not at all random. The results are interesting, but completely anecdotal.

    The other idea is a greatly expanded Earned Income Tax Credit. This would reward people for work and would be adjusted based on the number of dependents. It would also reduce the incentive to automate jobs that would result from a $15 minimum wage.

    So, for example, an $11 hour min wage + an expanded EITC would get working families out of poverty while rewarding work and expanding the workforce.

    Look, poverty is complicated. Although it’s defined as a specific income level – It’s far more complicated than that. There’s an entire cluster of behaviors, attitudes, and ways of thinking, skill deficits, etc. that perpetuate poverty. A person who finds themselves in situational poverty (divorce, loss of job, etc.) is very different than a person who has experienced intergenerational poverty. It’s often unclear what is “cause” and what is “effect”.

    The most effective way to remediate poverty is a full time job paying a living wage. A job addresses things like agency, technical skills acquisition, life skills acquisition, meaning and pride, future orientation, etc. – In addition to a paycheck.

    Expanding the EITC would reward work – at whatever level someone is starting, it would adjust income to family size, and could get support from both sides of the political spectrum. We could do it right now.

  26. OK – sadness has dominated today –

    Some people are so fearful that someone may get a few bucks when they don’t deserve it – So we give Musk $12K — then we tax the rest of his wealth, but no. We must end the idea, lest Musk get that $12K.

    John H is on the right track – First, UBI is cheap to administer compared to lots of means testing; Second, whenever anything is means tested, you can count on hearing – “THOSE PEOPLE DON’T DESERVE IT” – “they are all lazy” – so it isn’t so much that we are keeping it from Trump and Musk, but rather we end up keeping it from the needy.

    I tend to go by the way that I was raised, so I don’t argue universal truth here, but, if you “give to the beggar, and the beggar is a cheat, the beggar is a sinner; if you deny the beggar, assuming the beggar is a cheap, and the beggar starves to death, you are the sinner.” Old country religious thought, but how I was raised.

    Experiment – small number? Yes, so, either scale up or repeat the experiment many more times — or both – or are we to imitate the QOTP, stick our fingers in our ears and yell “Nah, Nah, Nah, no masks, no science, no facts”?

    Finally, emkate and others – we must realize that ideas from Democrats are all “socialist”, so we can discard them – have pity for the rich – they are the ones deserving our sympathy. They are helpless addicts. You hear complaints about the poor, but the rich are addicted to tax cuts and need to receive another and bigger one every couple of years, or they fall apart. What will they do now with Democrats in control? Where will they get their fix? Have pity on them. They are the lazy ones who insist that “You should be happy with $7/hr”, but they won’t bother to “make wealth” unless they get huge raises, pay no taxes, and have golden parachutes.

  27. Why does anyone think $15 an hour for people who WORK for a living is generous or even adequate? I defy those who oppose it to live on it for a few months. One car repair or blowout (if they can even afford a car) or broken bone becomes financially devastating.

    My church is a COVID testing site. Those without health insurance have to pay $130 for a test – an impossible barrier for front line workers making minimum wages. How many got COVID, couldn’t afford to miss work, and infected others before they became so sick themselves that they couldn’t leave their sick bed?

    While I understand the concerns about waste and abuse, the same folks who complain of fraud and abuse also complain about paying the bureaucrats needed to keep abuses in check.

    Poor people don’t eat if they don’t have money for food. They don’t have shelter without rent or mortgage money. Their poverty nearly always guarantees they will spend money on necessities. Why is that a surprise and why do we so begrudge those who WORK for less than livable wages?

  28. Len and Nancy, amen, fellows.

    Lester, yes, the UBI would go to the loathsome creatures you list. Len is exactly right in the way things of this nature are denied.

    Ken, Lester doesn’t really have a point there, or it was poorly made. By denigrating the result of the study, he is implying it has no evidential value at all and should be ignored, and that’s wrong. The strength of the evidence is debatable, of course. With studies, it’s always necessary to replicate the experiment. And that’s happened. Although Sheila mentioned this one study, there have actually already been quite a few. We’ve done a couple similar experiments in Canada, too, and it’s been repeated in many European countries, and the results have all been very similar. These multiple similar results serve to strengthen the reliability of the conclusions.

  29. One more note on this…

    First, I meant Kurt, not Ken.

    Second, I don’t mean to imply that the issue of the value of the UBI is settled. I find the similar results in various experiments to be persuasive, but that doesn’t say enough yet about the costs and benefits about doing this universally. One big question I have in this regard is: how much can be given to alleviate poverty, yet not trigger a detrimental level of inflation? (I really wonder what Stephanie Kelton would have to say about this. And if you don’t know Dr. Kelton, you should definitely check her out.)

Comments are closed.