UBI: A brave experiment or just welfare renamed?
America’s first experiment with universal basic income seems to be underway, said
Sheelah Kolhatkar in The New Yorker. The traditional child tax credit required that you earn enough money to pay taxes in the first place and was used to cut your tax bill. But a provision in the March rescue package not only raises the sum to $3,600 a year but also lets the government send the money to families every month regardless of employment status. A UBI program “never seemed possible in the United States, but lessons from the 2008 financial crisis, the Trump presidency, and the pandemic have changed what policymakers are willing to try.”
UBI has been called “a radical new approach to welfare,” said Katherine Revello in WashingtonExaminer.com. It’s not. It’s just “a rehashing of the failed policies of the past.” Though it’s being framed as “universal”—equal money for everybody—the new child tax credit is still “conditional,” based on how many children you have. It doesn’t erase the “stigma that has long surrounded” other “handouts to the poor.”
A two-year experiment in California offers a ringing endorsement of guaranteed income, said Annie Lowrey in The Atlantic. In the city of Stockton, 125 randomly selected individuals in low-income neighborhoods got $500 a month from the local government, “no strings attached.” This program did not dissuade people from working; in fact, “the share of participants with a full-time job rose 12 percentage points, versus 5 percentage points in the control group,” adding to “a large body of evidence showing that cash benefits do not dramatically shrink the labor force.” Monthly payouts actually give people enough “stability to find and take a new job.” Recipients also reported feeling “healthier, happier, and less anxious.”
A pilot program for basic income in Oakland is even more radical, said
Erika Smith in the Los Angeles Times. The city will “soon give out $500 a month to 600 low-income residents for at least 18 months.” But unlike in Stockton, there’s a catch: “Recipients also must be Black, Indigenous, or otherwise identify as a person of color to qualify.” This makes the program seem more like a test case for providing financial reparations for slavery. That could prove “legally problematic,” said Christian Britschgi in Reason.com. The U.S. and California “generally prohibit raceselective programs and public services.” But Oakland’s program is being funded by philanthropic donations and run by community groups, making the legal issues “harder to parse.” It could come at a cost politically, however. Polling for universal cash relief is much stronger than polling for reparations, and “racebased eligibility requirements could undermine” the fledgling UBI movement.