The Stew BLOG

Unconditional Basic Income: A Bi-Partisan Possibility for Tackling Poverty & Improving Health

Nina Burke, Senior Project Associate | 09/01/2017

Take a look at most of the posts in The ReThinkers’ Blog and you’ll find discussions about regional leaders working tirelessly to address social determinants of health. Working collaboratively across sectors–a feat unto itself–they are investing in access to healthy foods, obesity prevention programs for kids, juvenile justice programs, and more. And as Charlie Homer wrote, a lot of this is possible because our nation is making critical investments to support regional health.

But questions linger. There is unequivocal evidence that income is a primary indicator of health outcomes. If you are familiar with the ReThink Health Dynamics Model, you know that ‘pathways to advantage’ are included because we know that income influences health and health influences income. With more than 45 million Americans living at or below the poverty line, including 14.5 million children, can the current efforts at improving population health ever be successful? If we truly value health, why not double-down on poverty?  

Some folks in the private sector are already vocalizing a (retro) idea for getting this done: unconditional basic income (UBI). The concept is that government provides a baseline income to ensure every American lives above the poverty line and has the means to purchase food, pay rent, take the bus, access health care, survive, and hopefully thrive. The ‘unconditional’ piece indicates that there are no strings attached to it and the government does not dictate how you may or may not spend it.

If poverty is defined in terms of insufficient income, could it be that the solution to ending poverty is simply boosting income? The idea of UBI has resurfaced due to a changing innovation in tech, an evolving job market, the failure of our current welfare systems to lift people out of poverty (but rather merely help people manage within poverty), unprecedented inequality, and growing evidence that the best assistance is cash assistance.

The rest of this blog explores the idea of UBI–not from an advocacy standpoint, but with a ‘let’s peel back the onion’ approach. Given our current anti-poverty policies  and our national mindset toward poverty. Many of us may already believe it can’t be done. But, what if that’s nonsense? Here are six ways to challenge our thinking on UBI and to begin changing the narrative around poverty.

1. There is past and present support on both sides of the aisle for UBI. The concept of providing a basic income is popular among conservatives and progressives alike. Let’s time travel for a moment back to 1969 when a basic income was introduced under President Nixon. The Family Assistance Plan, as Nixon’s plan was known (was written by a Democrat), passed one body of Congress. Newsweek declared that if the basic minimum income were enacted, “It will constitute a humanitarian achievement unrivaled since the New Deal.” A basic income would presumably mean fewer government-run programs and less cost to administer the same total benefits to recipients. Instead of different departments administering a variety of assistance programs–such as food stamps, Temporary Assistance for Needy Families, SSDI, housing subsidies, childcare tax credits, etc., eligible individuals would receive one payment from one government office. Where would we be today if basic income had passed under Nixon.

2. Providing cash to low-income individuals works. In contrast to the belief of many that poor people cannot be trusted to make important decisions with money, a journalist discovered that the recipients of a unique, 12-year unconditional cash program in Kenya are highly capable of planning ahead and self-allocating their resources. Examples of spending include: saving for children’s school tuition, purchasing new equipment for business ventures, and hiring more employees. There is also evidence that no-strings-attached cash does work in the United States. The ‘negative income tax’ was tested between 1965 and 1968 but lost momentum due to the politicking of data. This begs the question–why has there been a historic lack of trust in providing low-income individuals with unconditional cash?

3. UBI would help people out of the employment and poverty traps that often are a disincentive to work. Philippe Van Parijs and Yannick Vanderborght discuss this in their hot-off-the-press book, Basic Income: A Radical Proposal for a Free Society and Sane Economy. The employment trap is created when people desperate for work have limited options, so they accept jobs that pay less than a living wage because they lack negotiating power and/or a financial safety net. The poverty trap is created by our current welfare system, which immediately bounces individuals and families off of needed benefits once their income reaches a certain threshold. Someone could become ineligible for $400 of assistance with an income gain of $50, for example.

Some people believe that financial safety net programs create disincentives to work. Economists have studied multiple cash transfer programs, conditional and unconditional, and found that none of these programs create disincentives to work. There was no statistically significant change in employment across seven safety net programs in developing countries. People still work, and even those who do not are spending their money within local economies. This brings to light an interesting question of additional economic benefits of UBI due to the local multiplier effect. How do you think local spending would change if there was more no-strings-attached-cash floating through the economy?

4. With concepts like UBI, we needn’t accept poverty as a fact of life in America. Poverty has indeed plagued our society for centuries. The Great Depression, for example, ripped the rug out from under millions of hard-working Americans. However, we didn’t declare there was nothing we could do about poverty while families waited in bread lines. Instead, we created the New Deal. In the 1960s, President Johnson declared war on poverty and we saw a drastic decrease in the percentage of Americans living in poverty (down from 22% in 1959 to just above 10% in 1975). Social Security, arguably its own basic income program, has lifted elders out of poverty since 1935. We did not think it was acceptable for seniors to live in poverty in 1935, but we are mildly accepting of 14.5 million children living in poverty in the U.S. today.

We have not made noteworthy progress on poverty alleviation since the 1980s. As a society, we have to come to terms with the idea that poverty remains a fact of life because of our collective mindset. What if we shifted our mindset to one of solutions? What if solutions to poverty are out there if we are willing to take action?

5. Artificial intelligence and other technological advances are impacting jobs. Facebook CEO Mark Zuckerberg and Tesla CEO Elon Musk both support a basic income for this reason. Oxford researchers estimate that, in the next 20 years, 45% of American jobs are at risk of obsolescence due to artificial intelligence. Another prediction is that automation will create 15 million new jobs, but wipe out 25 million jobs by 2025. That is really soon, folks. Drones may soon be delivering your pizzas or robots reviewing your taxes.

It seems highly likely that low-wage jobs, usually occupied by those who are already struggling to make ends meet, will go first. However, middle- and upper-middle income jobs probably not escape unscathed. Political agendas aside, we need to start planning for a future with a vastly different labor market and employment landscape. There is a current UBI pilot happening in Oakland, CA, run by Silicon Valley’s Y Combinator (a start-up incubator), worth keeping an eye on. What would success look like if our economic policies could keep up with this changing employment landscape?

6. The anti-poverty policies we have in place aren’t enough. Many of our anti-poverty policies are designed to create opportunities and incentives to work, such as the earned income tax credit and the childcare tax credit. These policies have been instrumental in lifting many families out of poverty, but our poverty rates are still stagnant and unacceptable. Our economy is in its third-largest expansion in history and unemployment is at a low of 4.4%, yet we still have 45 million Americans in poverty. Wage growth is only reaching the top quintile of earners. The cost of child poverty alone is estimated at $500 billion per year. For me, this data is sufficient to believe that a healthy economy will likely never correlate with a healthy nation here in the United States, unless we take different actions to lift our fellow citizens out of poverty.

So What? Many of the regional efforts ReThink Health works with are on the leading edge of health system transformation. It’s unreasonable to think that regions can or should drop their current interventions to focus solely on poverty, or that the burden of doing so should rest on their shoulders. However, they can move the needle on communicating the true urgency of and possibilities for dealing with poverty as a means of improving population health. Working to change the narrative around poverty is a step in the right direction.

How are the leaders in your regional effort talking about poverty? How much progress on the social determinants of health can be made in your region without new interventions to address poverty? Comment below or send us an email: [email protected].