Basic income handouts feel like a scam
But Harris County’s Uplift Program experiment should answer questions of what works and what doesn’t
I was on a walk the other day, ogling the varied River Oaks mansions that dot the streets sandwiched between San Felipe and Westheimer. While my inner voice (which sounds a lot like Simon Cowell) both judged and admired the excesses of these houses that I will likely never be able to afford, my attention was drawn to another voice on a podcast, NPR’s TED Radio Hour, playing in my wireless headphones. The topic? Money, and how do we know when we have enough of it.
The featured guest, Aisha Nyandoro, launched a first-of-its-kind guaranteed income program in 2018. The program, specifically for low-income Black mothers in Mississippi, didn’t aim to solve all of these mothers’ problems. But the monthly check of $1,000 for one year helped give about 100 women “the breathing room they need by giving them the financial resources they need to dream a little bigger.” Some moms were able to go back to school. Some got out of debt. Another was able to give her kids the simple luxury of pizza on a Friday night. All felt the money gave them more dignity and agency.
We recently ran an op-ed on Harris County’s own upcoming experiment with basic income. Several letter writers shared Charles Blain’s concerns over Harris County’s Uplift Program, which will give select low-income residents a $500 check every month for 18 months. I can understand where the skeptics and critics are coming from. As my dad always reminds me, “Nothing in this life is free.” Getting money, no strings attached, feels like a scam. In fact, it feels downright un-American. If they get money for nothing, why would recipients want to work at all?
These questions have been raised each time the idea bubbles up, no matter whether the supporter is Martin Luther King Jr., Richard Nixon, Milton Friedman or Silicon Valley tech bros. Americans are still pretty evenly split on the concept, which has slowly been tried by more and more cities in pilot projects across blue and red states. Have they helped people, or led to dependence on handouts? I brought these questions to Nick Powell, the editorial writer who took the lead on our recent editorial that took an optimistic but tentative position on the Uplift Program. Our conversation has been lightly edited for length and clarity.
Q: One letter writer wondered, “After a recipient gets their first $500 and they buy the 70-inch flat screen TV they have coveted, what next?” What would you say to readers who believe that handouts rob recipients of the motivation to work and to improve their financial situation long-term?
A: I would say look at Alaska, which has the nation’s oldest and largest universal basic income — UBI — program. Since the early 1980s, every Alaskan has received an annual dividend check from the revenue the state generates from oil and gas drilling — somewhere between $1,000 and $2,000. Some studies have found that the program has reduced poverty in Alaska by 20%. Other studies found it hasn’t impacted the job market negatively in any measurable way, and actually increases part-time work.
Q: What would you say to a letter writer concerned with how the program will be funded ? Though this pilot will use federal money, he argues those are still taxpayer dollars and that the county will likely want to extend the program beyond 18 months. Harris County residents, he wrote, will be the ones to foot the bill.
A: It’s certainly possible that there will be a desire to expand or extend the program if there’s enough evidence that it measurably improved participants’ lives. But the reality is, there might not be enough money in the budget to do so. Unlike the federal government, Harris County doesn’t run on budget deficits. Every dollar spent has to be accounted for. So even if the program is wildly successful, commissioners could have a tough decision to make.
Perhaps property tax revenue will increase enough to be able to continue the program. It’s also possible that revenues dwindle, and that there are too many other issues related to flood control or roads or public safety that take precedence. It’s also possible that commissioners decide to raise tax rates enough to pay for it. If so, that’s a political argument they will have to make to voters.
Q: What are some lessons we can learn from other long-term basic income programs in the nation?
A: It’s really difficult to wrap your head around the impact of these programs in the abstract. Even reading a study, no matter how credible or convincing, might not capture it.
The closest experience I’ve had with a UBI-style program is when Congress passed the American Rescue Plan and temporarily expanded the child tax credit for one year starting in 2021.
The increase in itself was a big deal for families. But what made the expansion unique is that whereas previously it was doled out in a lump sum after you filed your taxes, the ARP program disbursed the $3,600 or $3,000 in advance on a monthly basis. It functioned kind of like a basic income program.
At the time, my wife and I had one kid under 6 who was still in preschool. Like many families, we had to pay out of pocket for tuition. Having that extra monthly income helped us enormously in defraying those costs. It made me realize that if it could help us, a family who is privileged enough to not have to live hand to mouth, how beneficial was this program for people living in poverty? I imagine it was life-changing.
Q: Anything else you wish people better understood about basic income schemes and the people who receive that money?
A: One thing I think it’s important to add is that during the 12-month child tax credit expansion, child poverty in the U.S. dropped dramatically, to a historic low of 5.2% by the end of 2021. Those results created real momentum for the program to be made permanent, but those efforts stalled in Congress. As a result, the child poverty rate predictably shot right back up the following year to around 12%.
That’s powerful evidence that should destigmatize the way we view social safety net programs and the people who rely on them. Poverty causes so many problems, and yet we tend to think of it in this country as some kind of moral failure; that poor people can’t be trusted, that they don’t want to work, that they just want to cash welfare checks and spend them frivolously. The evidence we’ve seen from UBI programs across the nation provides a really effective counter to that perception.
To me, the greatest case for basic income programs is that they don’t treat people paternalistically. They are inherently structured on a principle of trust: that you, the individual or family, have the freedom to use this money how you see fit.
There are still lots of questions on how to pay for it, how to structure it, that all must be sorted out by policymakers. And that’s why I think it’s extraordinarily valuable to have programs like Harris County’s to add to the body of evidence on what works and what doesn’t.