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Universal Basic Income: If it Works for Billionaires’ Children, Why Not the Poor?
America’s oligarchs have always known that their warnings about making people “dependent on government” and “lazy” were a scam…
Cities across America (and around the world) are proving, with new Universal Basic Income (UBI) experiments, how wrong the old Republican canard really is. And what kind of damage it’s done to America during the 80 or so years it’s held the GOP in its thrall.
The first time I heard it I thought it was profound wisdom. Of course, I was only 16 years old, but it still seemed pretty important.
I was going to Lansing Community College part-time and working at WITL-AM/FM and, in addition to my own weekend Country music show, I produced the weekday hourlong talk show hosted by one of the station’s owners, Chuck Drake. My job was to answer the phones and make sure the tape delay was working right. And that’s when I heard Chuck lay out the Great Truth that has so badly held back and twisted the American economy:
“When you give people something for nothing, they don’t value it and it just makes them lazy.”
In other words, if you think you’re helping people by providing them with food stamps or subsidized housing or free healthcare, you’re actually hurting them.
For things or life’s circumstances to be meaningful, this belief says, they must have been acquired through struggle. And by depriving people of the struggle, we’re depriving them of an opportunity to learn to “stand on their own two feet.”
Destructive cultural myths like this always start with a grain of truth; it’s what propels them to seeming credibility and then on to cliché status. We’ve all had the experience of treasuring something we worked really hard to get, so it just makes sense that things that come more easily aren’t considered as valuable.
But while that general rule of thumb often applies to discretionary things — hobbies, toys, and the like — nobody is thinking of valuing or not-valuing necessities like food, housing, or medical care. They’re always valued, regardless of how they’re acquired, because they’re essential to life itself.
Back in the 1930s, Republicans ridiculed FDR’s many programs to help lift Americans out of the poverty caused by the Republican Great Depression. They argued — and continue to do so to this day — that Social Security and the minimum wage were hurting Americans by depriving them of struggle.
Republicans labeled Social Security a Ponzi scheme and sarcastically called FDR’s WPA “We Piddle Around.” They fought against minimum wage laws because with them employers couldn’t determine the bottom of the local wage scale that would keep workers desperate enough that they’d “value their jobs.”
Bizarrely, they even use religion to justify this worldview.
While Jesus had told his followers that when people are hungry, thirsty, or homeless we should provide them with food, water, and shelter — without trying to make a profit from it, but for the sheer joy of giving — Republicans who sanctimoniously call themselves Christians reject that advice, saying that if somebody is in need, that very desperation will become their motivation to do great things.
I still remember hearing Rush Limbaugh tell the crude Republican joke:
“What do you do when somebody’s down? Kick them! Otherwise, they’ll never get up!”
This idea that society helping its individual members to reach their highest potential is actually hurting them is one of the most pernicious lies conservative politicians and philosophers have spread in the past few centuries.
Reagan racialized it (not that it hadn’t been before) during his first run for president in 1976, saying he’d found a Black “welfare queen”:
“She used 80 names, 30 addresses, 15 telephone numbers to collect food stamps, Social Security, veterans’ benefits for four nonexistent deceased veteran husbands, as well as welfare. Her tax-free cash income alone has been running $150,000 a year.”
In fact, it was a lie; there was no such person. It was simply a variation on Reagan’s multiple ways of characterizing Black people as lazy or as people exploiting the system, like when he’d ask white southern audiences how it made them feel when “a strapping young buck” was buying “steak” in front of them at the supermarket with food stamps while they were waiting in line to “buy hamburger.”
Nonetheless, the argument — repeated thousands of times by Republican politicians for the past 80 years — has stuck. By the last year of Reagan’s presidency, fully 64 percent of Americans believed that “welfare benefits make poor people dependent and encourage them to stay poor.”
That widely held public sentiment led President Bill Clinton to cut welfare benefits drastically with his 1996 welfare reform: the number of people in America getting direct cash assistance dropped from 5.1 million in 1994 to around 2 million in the first years of the 2000s, even as the population of our country grew.
But what’s good for the goose isn’t good for the gander, according to Republicans.
Rich people, for example, never believed this meme. Or, if they did, they argued that it only applied to the “lower classes.” If any of the oligarchs who are steering policy for the GOP actually believed giving people money for doing nothing was detrimental to the recipients, they’d have cut off their own children’s and grandchildren’s inheritances in a nanosecond.
But most people realize that if you’re helping somebody reach their potential, there’s no risk of them becoming lazy. Even modestly wealthy people — like the parents of Bill Gates and Mark Zuckerberg — go out of their ways to provide their kids with a top-notch education and safe housing without having to incur debt of any sort.
They know that most of the time when you give people a hand up, they use that help to improve their lot in life.
They know those people who just try to exploit such opportunities to avoid working are the outliers and are few and far between; be they the indolent rich or real-life “welfare bums,” the number of people of all classes who’d rather goof off than pursue meaningful work is probably well under 3 percent of the population.
If that’s the burn or fraud rate for most welfare programs it’s well within an acceptable range given the social benefits, but the fraud rate for SNAP (food stamp) benefits is actually only 0.1 percent. (The fraud rate for wealthier people paying income taxes, on the other hand, is 17%.)
Dozens of studies of Universal Basic Income — giving poor people no-strings-attached monthly cash grants (typically between $500 and $1500 a month) — are now demonstrating beyond any doubt that the GOP’s line about “lazy” has actually hurt America’s overall productivity and wealth by preventing millions from achieving their highest potential.
In Denver, a program of $1,000/month cash grants has measurably reduced homelessness, gotten people jobs, and improved the mental health of its participants. A Stockton, California program that passed out $500/month checks saw unemployment go from 12% to 8% among recipients; the control group that got no money saw their unemployment rise to 15%.
From Los Angeles to Columbia, South Carolina; from Birmingham, Alabama to Baltimore; Universal Basic Income programs are chocking up proof after proof of their viability. Give people living on the edge enough to get themselves on solid ground, and they’ll do so. As such, they become both productive members of society and taxpayers, helping to fund future programs for other low-income people.
The largest experiment along these lines just finished last month. President Biden’s 2021 American Rescue Plan gave a $3,000/year tax credit — essentially a check, paid out in monthly increments — to every family in America with children. It cut child poverty in America by 46% when it started (there were still many unemployed adults in the country); when it ran out last month, child poverty shot up from 5.4% to 12.2%.
It’s a safe bet that none of those children were more motivated by living in poverty or less motivated by not being in poverty; if anything, the reverse is true. Once relieved of the worry about where dinner might be coming from, they could better attend to school and going about becoming a success in their lives.
Nonetheless, when Democrats tried to reauthorize the legislation to give those kids a chance of success, Republicans blocked the effort. They would tell you they didn’t want America’s children to get lazy.
The other big lesson we can infer from these many successful experiments with UBI is that for every community in America there’s a certain income level where people can have a decent life and we should recalibrate our minimum wage and other compensation laws around this.
Over at Business Insider, writer Michael Venutolo-Mantovani documents how a small UBI check of $600 a month turned around a young single mother’s life:
“In the spring of 2022, Tydricka Lewis finally bought a car that started every time she asked it to and no longer left her stranded. Her 2020 Nissan Rogue was essential to her new job as a peer-support specialist — helping people in mental-health crises required her to be able to get places reliably and fast. …
“It was a car that Lewis, a 32-year-old single mother of three, would not otherwise have been able to afford. But when she was selected for Durham, North Carolina’s guaranteed-income pilot program, she knew exactly where her $600 monthly stipend would be best spent.”
That car lifted her out of poverty and gave her and her employer confidence that she could do her job without interruption caused by a breakdown. It saved her and her family, and increased the chances of her children being successful in school and in life.
Every other developed country in the world has a strong social safety net, free or low-cost national health coverage, and free or low-cost college. No other developed country in the world has child poverty on par with America. They nurture their citizens’ human potential.
We have few of these functional social programs in America because Republicans have been telling us since 1935 that such things would make us “lazy.” They do this to keep taxes on the billionaires who own them low.
As a result, massive amounts of American human potential are lost. Competent young people can’t afford to attend college; over a half-million families are wiped out every year by medical debt, something that literally happens among developed nations only in the USA; and young people growing up deep in poverty are far less likely to have happy, productive lives.
America’s oligarchs have always known that their warnings about making people “dependent on government” and “lazy” were a scam. As mentioned, if they thought giving free money to people damaged them, they’d be pushing for a 100% inheritance tax to prevent their kids from suffering this fate-worse-than-death.
Instead, Republicans and their oligarch masters push this “yes for me, but not for thee” line when it comes to low-income workers, but utter nary a peep when there’s a conversation about the $600 billion a year we give to the fossil fuel industry as “free” subsidies. Or the tens of billions we gave banksters to bail them out in 2008 when their greed crashed our economy. Or the fact that American billionaires pay an average 3.2 percent income tax rate, while the rest of us pick up their share of the nation’s tab.
UBI is great, and these studies show how it can be an important — and efficient — way of moving people out of poverty and into the productive middle class. But more importantly, they give us the information we need to reformulate our overall policies dealing with the social safety net, education, healthcare, transportation, food, and housing.
There are dozens of ways to get people above the poverty line where they’re no longer desperate and struggling but can confidently attend to the daily work of raising a family and being a productive member of society. Unions; tax credits; government programs keyed to food, housing, and unemployment; minimum wage laws; Universal Basic Income: all are ways to lift families up to that threshold necessary for a decent life in the US.
So, let’s put to bed once and for all the old GOP nostrum about public assistance making people lazy and start working out innovative ways for government to help low-income working people rise above poverty.
Or else call the GOP on their hypocrisy and pass the “Save the Billionaire’s Children With Compassion Act” that taxes billionaires’ estates at 100 percent so none of their kids will ever have to suffer those dire consequences Reagan and the GOP warned us about over and over again.