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Category: THE SOCIAL DEBATE

  • Pro-UBI Candidate in South Korea Barely Loses Presidential Election

    By: Jeong-Ho Lee.

    Original Post: https://lmtribune.com/world/south-korea-elects-yoon-as-new-president-in-hawkish-turn/article_16d2247b-f400-59f0-a242-d292a1eb3ae3.html

    Former top prosecutor Yoon Suk-yeol won election as South Korea’s president, returning the conservative opposition to power after five years and signaling a hawkish turn in the country’s relations with China and North Korea.

    Yoon, 61, who had never before sought elected office, defeated former Gyeonggi Gov. Lee Jae-myung of the ruling Democratic Party in one of the closest presidential races in the country’s history. Yoon will succeed Moon Jae-in, who had been Yoon’s boss until they had a falling out over investigations into close associates of the president.

    “The race is over and now we need to be united as one for the sake of the people and the country,” Yoon told supporters and party officials Thursday morning. He planned to have a formal speech later in the day, his People Power Party said.

    Lee earlier conceded defeat and congratulated Yoon on his win. “All responsibility rests solely with me” on the loss, Lee said.

    Yoon had 48.6% of the votes, compared with Lee’s 47.8% with 99% of the votes counted. The new leader will take office May 10. He’ll face a parliament where Moon’s party retains a supermajority, virtually ensuring gridlock on many domestic issues.

    Yoon is a former prosecutor general and a familiar face in South Korea politics, but a foreign policy novice. He was handpicked by Moon in 2019 with a mandate to make good on the president’s pledges to go after the most powerful. But ties soured after Yoon’s probes included members of the current government and led to the resignations of two of Moon’s justice ministers.

    Yoon’s win would return an advocate of a stronger defense to the presidential Blue House, likely leading to a closer embrace of South Korea’s military alliance with the U.S. and support for the Biden administration’s push to bring in allies to build supply chains for crucial materials such as semiconductors that aren’t dependent on China.

    It could also mean a chill for relations with neighbors North Korea and China after Yoon said he backed the option of a preemptive strike if Pyongyang posed an immediate threat and called for a new deployment of a U.S.-made missile interceptor system known as THAAD. China banned sales of group tour packages and appearances of Korean celebrities on television shows in retaliation for Seoul’s deployment of the U.S.-led missile shield system about six years ago, despite Beijing’s objection.

    With a conservative president, “the expectation is that we will see South Korea be more unequivocal toward the alliance,” said Soo Kim, a policy analyst at Rand Corp. who previously worked at the CIA. “I don’t think this resetting of South Korean foreign policy is going to happen overnight,” she told Bloomberg Television.

    South Korea’s presidents serve a single five-year term and the winner replaces a president who has backed rapprochement with North Korea and largely avoided stances that would rankle China, the country’s biggest trading partner.

    Cheon Seong-whun, a security strategy secretary with the former conservative President Park Geun-hye, said the country was likely to play a bigger role in safeguarding international norms and universal values under Yoon.

    The new president would “more actively participate in sanctions against Russia and North Korea,” as well as in “naval drills in the Indo-Pacific theater,” Cheon said.

    Moon’s administration has been hesitant to take part in U.S-led policies aimed at pushing back against China’s military moves in the region, while the sanctions South Korea has rolled out against Russia for its invasion of Ukraine haven’t been as robust as those of some other U.S. allies.

    “Yoon has signaled he will more closely align with the U.S. Although that does not mean South Korea will be in lockstep with the U.S. on all issues, that will not please China,” said Naoko Aoki, a research associate at the University of Maryland’s Center for International and Security Studies. “He is more willing to treat China as a threat,” she said.

    Economic issues were a top concern for voters. Housing prices have doubled in urban centers such as Seoul during the Moon’s term, while wages have failed to keep pace. This has made home ownership unaffordable for many families over the long term, while inflation unexpectedly accelerated in February, with the turmoil in financial markets caused by Russia’s invasion suggesting there will be little respite for rising prices for the coming months.

    On the campaign trail, Yoon promised to narrow the income disparity and implement a 100-day emergency rescue plan for a COVID-hit economy that would provide a quick and hefty financial injection. He also stoked divisions by pledging to shut down the Gender Equality Ministry — despite South Korea having one of the largest gender-based pay gaps in the developed world.

    Lee, 57, a former factory worker who later became a civil rights lawyer, had pushed to make the country Asia’s first to introduce universal basic income. The negative tenor of the campaign turned off a lot of voters and increased political acrimony.

    “Yoon’s immediate challenge will be dealing with a deeply divided country that largely either detests him or voted for him only because they detested Lee even more,” said Duyeon Kim, an adjunct senior fellow in Seoul at the Center for a New American Security.

    The post Pro-UBI Candidate in South Korea Barely Loses Presidential Election appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • One radical idea to solve America’s housing crisis: tax the land

    By: Jerusalem Demsas.

    Original Post: https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis

    A six-word phrase keeps popping up on my Twitter feed: “Land value tax would solve this.”

    In response to the inefficient use of land as parking lots. As a policy to help fund a universal basic income. And even (jokingly) as a prescription for the rise of virginity in young men.

    The big question land value taxes help answer is: How can a government raise funds without distorting choices and possibly leaving people worse off? If you tax income, it provides a disincentive to work. If you tax property, it provides a disincentive to improve the physical buildings on top of the land. Sometimes the tax is intentionally disincentivizing an activity — think carbon taxes to reduce greenhouse gas emissions or so-called “sin taxes” on tobacco. But there are also taxes governments want to levy to pay for valuable services without changing behaviors too much (or at all).

    One of the most straightforward solutions a land tax offers is to America’s housing crisis. That crisis is caused, in part, by the failure to appropriately use valuable in-demand land for its best purpose.

    Millions of people want to live in New York City, Los Angeles, Washington, DC, or Seattle, but local tax regimes actually punish people for investing in their property. When people improve their property — either by adding a new room or building an entirely new structure like a multi-story apartment building, they’ll pay higher property taxes.

    But this isn’t just a big-city problem. In small towns, vacant lots contribute to decline — and if there’s no valuable structure on a property, its delinquent landlords likely only pay a nominal property tax. This both lowers tax revenue and hurts neighborhood quality for everyone else.

    Here’s where a land value tax can come into play.

    Taxing land value means separating out what land is worth without any of the improvements sitting on it (like homes or industrial plants). Most Americans are familiar with property taxes that tax the value of their homes and the land they sit on as one. As New York University economist Arpit Gupta explains, part of what makes land taxes so attractive is that “there should be no economic inefficiency” if you are able to tax “true land rents.”

    A land tax can’t disincentivize anything — land will continue to exist regardless of any taxation scheme.

    “Land doesn’t move,” University of Illinois economist David Albouy explained. “It doesn’t disappear — so you can lower taxes on things that do go away.”

    As Jeff Spross explained in 2015 for The Week:

    The key thing to realize about a land value tax (or LVT for short) is that nothing you do can affect it. … This is why economists love it. By definition, an LVT only captures “rent” — in economics-speak, income you earn by happenstance or luck rather than by actually creating new wealth.

    Your tax burden under an LVT goes up only if the value of the land itself — the one thing you have no control over — also goes up.

    The LVT also has an appealing underlying moral framework: The luck to own a piece of land that happens to appreciate — say, you bought a house in San Francisco before the tech boom — should not come with it the ability to extract rents without providing value.

    In other words, since people who own land aren’t actually responsible for it increasing or decreasing in value, it’s pretty absurd that they get to accrue all the benefits of owning a piece of land without having to do any work for it.

    I want to again distinguish this idea from adding value to the land by building a business, farming the land, extracting natural resources, or a myriad other ways people use land. These things are obviously work, which is exactly why moving away from a property tax system — which taxes things people actually have control over — to a land tax system could be so efficient.

    At this point, “land value tax could solve this” has become a meme in niche online communities, with its strongest adherents believing that one simple policy has the potential to solve some of the nation’s biggest problems — including our housing crisis.

    America’s housing crisis

    At its core, America’s housing crisis is about the nation’s perennial failure to build enough homes. As of last year, Freddie Mac estimated that the country needs an additional 3.8 million homes to meet demand.

    Because of our persistent failure to build, prices have skyrocketed. People are moving out of their parents’ homes, starting families, moving to new jobs and competing over a scarce number of housing units. In a healthy market, this rising price signal would push developers to create more homes and prices would fall (or at least stop rising).

    The American housing market is anything but healthy. As a result of various rules and regulations mostly set at the local level, developers can’t simply build and provide more homes.

    Instead, laws that make it illegal to develop land more intensely — that is, build multiple homes on a single lot of land like a duplex or an apartment building or build smaller single-family homes — keep prices high.

    Land and property owners are often the most vocal opponents of liberalizing land use laws. Homeowners trend older and have stronger preferences for stability as well as negative attitudes towards renters and apartment buildings. Local governments, which have been granted near unchecked authority by state governments, are entirely captured by homeowners.

    Boston University researchers Katherine Einstein, David M. Glick, and Maxwell Palmer looked at planning board and zoning meetings in nearly 100 Massachusetts cities and towns and found that meeting participants were disproportionately homeowners. Participants were consistently likelier to oppose new housing in their communities.

    If you add a room for your father-in-law who is moving in with you to help raise your kids or add a home office during a global pandemic, you could receive a penalty in the form of higher taxes since you have made your property more valuable. And if someone turns their garage into an apartment, providing an affordable housing option for their community, they pay higher property taxes than similarly situated neighbors who don’t add housing options to their land.

    So how could a land value tax help fix this?

    Under a land value tax system, proponents say property owners would be clamoring to be allowed to develop their land more intensely — leading to more homes being built.

    Here’s the theory: Taxing land reduces the profit that comes from just owning a piece of property. Instead, you are incentivized to put that land to work. Let’s take a plot of land near Times Square. That land is so valuable, basically anything you do with it will turn a massive profit so no need to develop it for its most valuable use.

    However, if a land tax were to be levied, the owner of that land would need to make sure that the property on that land was actually profitable since the government is taxing away some or all of the land rents that could be charged.

    In a 2015 Slate article, Henry Grabar illustrated this point well, pointing to the case of a parking lot charging drivers $40 per day for parking and accruing under $10,000 in property taxes. That parking lot, Grabar writes, sits next to a seven-story building that requires more than a quarter of a million in taxes annually.

    “It turns NIMBYs into YIMBYs,” explained economist Noah Smith, who has written about land taxes. “You leverage the same toxic local politics that are now creating NIMBY-ism, you leverage for YIMBY-ism because now you have people wanting to build stuff.”

    In Allentown, Pennsylvania, the system worked! According to a 2019 Strong Towns article, after the city adopted an LVT (through a split-rate system that still kept some property taxes in place) in 1996, “construction returned to the city: the number of taxable building permits surged past neighboring Bethlehem, market investment returned and capital improvement reappeared in city budgets. … The losers in this trade were absentee owners of vacant lots, who had to shoulder much more of the burden.”

    Sen. Pat Toomey (R-PA) is quoted touting the benefits of the tax: “The number of building permits in Allentown has increased by 32 percent from before we had a land tax.”

    So if this change to our taxation system is so simple, why don’t more cities implement it? Well, property tax reform is the third rail of American politics. In California for instance, as Conor Dougherty explained for the New York Times, “In 1978, a Los Angeles businessman named Howard Jarvis led an insurgent campaign to pass Proposition 13, a ballot measure that limited California property taxes and inspired a nationwide tax revolt. The law has been considered sacrosanct ever since.”

    But beyond the political issues, there are also technical concerns: Firstly, valuing land separately from the improvements to it is not so simple, though proponents argue it can be done. Secondly, implementing a land tax right now, while fair in the medium and long term, could feel drastically unfair in the short term to property owners who paid a premium for their lots because of the value of the land only to see it depreciate in value as a new tax gets implemented.

    So why is this meme becoming so popular (at least among some online communities)? Lars Doucet, a prominent land value tax proponent, explains that a big part of the reason is that for a long time the automobile made sprawling suburban development possible. That meant people could still access valuable labor markets even if they couldn’t afford to live near their jobs (as long as they were willing to suffer long commutes, that is).

    “Now we’ve run out of suburbs,” Doucet argued. “We can’t push any further through expansion.”

    Remote work is a new development, which could buy us some more time, since it could allow many people to live even further away from city centers, but as rents skyrocket, people are desperately searching for radical solutions to America’s housing crisis.

    The post One radical idea to solve America’s housing crisis: tax the land appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • OPINION: A Basic Income for Ukrainians, Paid for with Frozen Russian Assets

    The U.S. and its allies should create a new global fund to deliver cash to the growing flood of refugees.

    By: SIMON JOHNSON and OLEG USTENKO

    Original Post: https://www.politico.com/news/magazine/2022/03/02/frozen-russian-assets-humanitarian-relief-00013286

    As the Russian invasion continues, the Ukrainian refugee crisis grows.

    On the morning of Feb. 28th, 520,000 people were estimated to have fled Ukraine; as of the morning of March 1, 680,000 had left; the latest figures for March 2 indicate that 850,000 have now gone. Long lines are reported at the borders and, unless there is an immediate ceasefire, we expect a daily additional outflow of at least 200,000 people per day. The UNHCR, the U.N. refugee agency, estimates that there may soon be 4 million Ukrainians as refugees outside the country and another 12 million inside the country desperately needing assistance. (The EU Commissioner for Crisis Management has mentioned the possibility of 7 million refugees.)

    The generosity of European Union countries and their citizens has been amazing, and people around the world are sending donations. Granting the legal right to an extended stay in the EU will also help.

    But if the invasion continues, this will be a long and drawn-out struggle for human survival, which needs to be funded properly and on a sustainable basis.

    Fortunately, there is a source of assets readily available to support generous humanitarian efforts: the hundreds of billions of dollars in frozen Russian assets, public and private, which can be transformed into usable resources.

    Total Russian central bank reserves were estimated to be around $630 billion, of which more than half have been frozen due to unprecedented financial sanctions imposed by the U.S., the EU, the U.K., and Switzerland. In addition, the assets of people associated with Russian President Vladimir Putin are coming under scrutiny and could also potentially be seized, based on further executive and legislative measures. This creates a potential pool of assets worth at least $300 billion. More aggressive action against “oligarchs” may bring in more.

    It will take time to determine precisely what happens to these assets. For example, assets under U.S. legal jurisdiction may be subject to private rights of action in the form of class action lawsuits by individual Ukrainians, who can quite reasonably claim compensation for the personal harm and financial loss they have suffered. Similar claims have been made against other governments, including Afghanistan currently and Iran in the past (also by Canadians).

    In Europe, countries such as Poland, Slovakia, Moldova, Romania and Hungary could reasonably seek reimbursement for the expenses they are incurring. Refugees in those and other EU countries are being provided with housing and medical care; hopefully their children will soon be able to go to school again. All of this is expensive, and all these expenses are the result of an unprovoked attack by Russia, including mass civilian casualties, the destruction of homes and the threat of worse to come. Budget pressures in all the affected countries will continue to mount as the refugee crisis worsens.

    In addition, Ukrainian refugees — inside and outside the country — need a source of income. But unlike similar crises of an earlier era, the advance of electronic payment systems and widespread use of cell phones can help with the logistics.

    So far, we’ve witnessed a remarkably orderly exodus. Some people had only a few minutes to leave their houses, and there are heart-rending accounts of parents grabbing children from beds at 5 a.m., just before the Russians arrived. However, according to credible reports, most people have been able to leave with their passports and cell phones. Due to well-designed previous government initiatives, around one-half of residents can already receive electronic cash payments directly from the Ukrainian authorities; such lump sum cash distributions were used recently to encourage vaccinations against Covid-19.

    Consequently, it would be possible to create and distribute a guaranteed minimum basic income system for all Ukrainians, whether they are in still in a war zone or not.

    The economy is obviously taking a beating, so imported food, medicine and other supplies will be necessary to keep people alive. Everyone outside the country needs to have access to euros or dollars or another international currency.

    The U.S., the EU, the U.K. and others should create a global fund for humanitarian cash support to Ukrainians, with an initial value of $200 billion. This fund could issue bonds, guaranteed separately or jointly by Western governments that choose to participate. Those governments could then decide whether, in the future, to assign frozen Russian assets to this fund as one way to cover their obligations. In any case, there would be plenty of people around the world willing to buy these bonds.

    This new global fund would have just one mission: to digitally distribute euros daily to Ukrainians.

    Exactly how much money should be provided is a matter for discussion with the Ukrainian authorities, but $50 per day (roughly 45 euros) could be used to think about the scale of this effort.

    Starting with the Ukrainians outside the country, the daily cost would currently be about $50 million, but we should expect this to rise quickly toward $200 million per day or north of $1 billion per week. At roughly that spend rate, the initial capital would last three to four years.

    Of course, if more Ukrainians need this form of support, the cash distribution would have to be larger. If all 45 million Ukrainians are in desperate need of assistance at this level or higher, this Fund would need a lot more resources.

    The humanitarian cost of the Russian invasion of Ukraine is already terrible. It will increase and stay with us for a long time. Providing cash to desperate Ukrainians is a feasible form of support that can supplement traditional means of assistance. Paying for this with seized Russian assets and Putin’s own plunder seems only appropriate — although this money will not begin to represent anything close to full compensation for the devastation caused to human lives.

    The post OPINION: A Basic Income for Ukrainians, Paid for with Frozen Russian Assets appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Carbon Cashback: Good For The Planet And The Pocketbook

    House Bill 2278 could help accelerate Hawaii’s transition from fossil fuels.

    By: Noel Morin

    Original Post: https://www.civilbeat.org/2022/03/carbon-cashback-good-for-the-planet-and-the-pocketbook/

    Hawaii’s leaders are moving along one of the most consequential climate policies considered by our Legislature — a carbon fee and refundable tax credit.

    The measure, House Bill 2278, promises to create an environment that will accelerate our transition away from fossil fuels, contributing to much-needed emissions reductions while protecting our low-to-moderate income households. It does this by putting a predictable increasing price on carbon pollution.

    This will increase the cost of fossil fuels and incentivize reducing their utilization — much as a tax on cigarettes reduced consumption. Furthermore, HB 2278 mandates that the tax revenue be returned to residents to offset the expected increase in prices. This allows the tax to be progressive — it does not grow government but will enable residents, especially those in low-to-moderate income households, to benefit.

    HB 2278 has garnered significant support from many during its committee hearings in the House. This acknowledges its effectiveness in reducing emissions and allowing for an equitable transition to a lower carbon reality. It is now facing a House vote before crossing over to the Senate.

    HB 2278 is effective because it adopts a carbon fee and dividend model, much as was described in a UHERO study and recently recommended by the Hawaii Tax Review Commission.

    The UHERO study was commissioned to understand the impact of carbon pricing on low-to-moderate income households. It concluded that it is possible to cut emissions to 40% below 2019 levels with a carbon tax.

    Further, the policy would benefit low-to-moderate income households if revenues were returned to residents.

    Does It Work?

    Questions have been raised about the efficacy of the strategy. One need only look at the global stage to realize that many governments have implemented carbon pricing. There are currently close to 30 countries with one. The U.S. and Australia are among the countries with developed economies that don’t have a carbon tax.

    Sweden implemented a carbon tax in 1991 and has the highest price globally at $137 per ton. It reduced its emissions by 25% by 2000. At the same time, its economy grew by 60%.

    British Columbia implemented its carbon tax in 2008, which is currently at $45 per ton. Studies have shown that it had a minimal impact on the economy while reducing emissions between 5% and 15%.

    Carbon pricing will encourage investment and innovation in clean energy solutions. The European Union’s carbon price has been cited as one of the main reasons electric vehicle penetration in Europe far exceeds that of the U.S. Furthermore, Metcalf and Stock find that the EU’s carbon price has a very negligible impact on its overall economy.

    Carbon Pricing Is Popular, Will Benefit All

    Placing a price on carbon pollution has been endorsed by thousands of economists, former chairs of the Federal Reserve, the U.S. Chamber of Commerce and Business Roundtable, prominent religious groups, Pope Francis, and many prominent individuals and businesses.

    A gradually rising price on carbon pollution, as proposed in HB 2278, offers flexibility in the response. Carbon pricing can maximize resources by implementing energy efficiency measures, deploying renewables and cutting fuel consumption. While added costs can be passed on to consumers, they can come out ahead by reducing their energy and fuel consumption.

    GRAPHIC How would a carbon tax work in Hawaii?
    How would a carbon tax work in Hawaii? 

    With HB 2278, consumers can adjust to gradually increasing costs, and with the refundable tax credit, they will be better able to accommodate the price increases. Additionally, they can save even more by adopting energy efficiency measures — conserving electricity, driving more efficient cars and making homes more efficient. This will allow more of their refundable tax credit to be spent on other necessities.

    Notably, a market shift away from fossil fuels will increase investment in and adoption of renewable energy and clean transportation. This will ultimately result in lower energy costs (renewables are cheaper than fossil fuel-based electricity) and lower transportation costs (electric cars are more affordable to fuel and maintain).

    Global Pressure Is Growing

    The EU and Canada have announced plans to implement carbon border adjustments — tariffs on high carbon product imports from countries without a similar carbon tax. This border tax allows importing countries to level the playing field for their businesses.

    It has the effect of encouraging countries to implement a price on carbon. While members of Congress have discussed U.S. carbon border taxes, they cannot implement one effectively without a domestic carbon tax.

    There are carbon pricing bills in the current Congress and support for including a carbon price in the Budget Reconciliation. Notably, developments in the U.S. Supreme Court highlight how regulations are fraught with the risk of political threats. (They are also complex, costly and often regressive.)

    The Climate Emergency Is Here

    The climate crisis is our existential threat. The latest IPCC report reiterates the need for urgent climate action and confirms the consequences of inaction.

    “The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5 degrees Celsius (2.7 degree Fahrenheit). Even temporarily exceeding this warming level will result in additional severe impacts, some of which will be irreversible. Risks for society will increase, including to infrastructure and low-lying coastal settlements.”

    We cannot afford to sit back and hope that the rest of the globe will solve global warming. While our emissions are a fraction of the globe’s, we contribute to the ever-increasing atmospheric CO2 (recently at 420 PPM). As global citizens, we have a responsibility to act and do our share to cut greenhouse gas emissions.

    Importantly, we have an opportunity to not only reduce our fossil fuel dependence and our global-warming emissions, but we can influence the rest of the nation to do the same. If the most petroleum-dependent state in the nation with a strong reliance on fossil fuel imports from countries like Libya and Russia can price carbon, others will follow.

    We need carbon cashback. We must pass HB 2278.

    _______________________________________

    About the author: Noel Morin is a leader with the Citizens’ Climate Lobby, a grassroots organization dedicated to effective climate policy. Visit cclhawaii.org for more information.

    The post Carbon Cashback: Good For The Planet And The Pocketbook appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Oregon Lawmakers Drop the Ball on Basic Income

    By: Stacey Rutland

    Original Post: https://income-movement.medium.com/oregon-lawmakers-drop-the-ball-on-basic-income-f924e7bb0ec4

    A new bill introduced by Rep. Brad Witt in the Oregon legislature would have established a state-run basic income program. H.R. 4079 would have created the Oregon Freedom Pilot Program, a fund for a long-term basic income of $750 a month distributed to more than 2,000 former foster youth and single moms across the state. While a hearing on the bill was slated for last month, lawmakers canceled it at the last minute — effectively killing the bill, and the chance to help some of the state’s most vulnerable residents.

    According to the most recent statewide data, Oregon has close to 1,700 youth 15 and over who are close to aging out of the foster care system. These kids have the deck stacked against them. The National Foster Youth Initiative estimates that one out of five will become homeless as soon as they turn 18. Only half will have any form of gainful employment by the time they’re 24. They have less than a 3% chance of graduating from college.

    This is nothing short of a crisis, but very few government resources are dedicated to this extremely vulnerable population. Single mothers, among the most economically marginalized in our population, would’ve been included as well.

    The funding for the program would have come from a tax on certain luxury goods such as expensive jewelry and private aircrafts. At a time when bridges are being dismantled to make room for a billionaire’s mega yacht, the very wealthy can certainly afford to pay their fair share so that we do not allow another generation of foster youth to be pushed into a life of poverty.

    Offering foster youth and single mothers, two groups facing significant barriers to economic security, the stability of a basic income would have been nothing short of transformative. Early data from the Stockton Economic Empowerment Demonstration, a pilot that offered recipients $500 monthly for two years, showed the money improved everything from the ability to secure a full-time job to mental and physical health. Results from the Magnolia Mother’s Trust, a guaranteed income program that provides $1,000 a month to Black mothers living in extreme poverty, shows similar promise. Mothers who received the money were more likely to have children performing above grade level, to have money saved, to go to the doctor when they were sick.

    We can also see the tremendous benefit unrestricted cash programs offer at the national level:

    a recent analysis of stimulus checks found that the primarily cash-based policies enacted during the pandemic resulted in food insufficiency falling by over 40%, financial instability falling by 45%, and reported adverse mental health symptoms falling by 20%.

    Last year’s expanded Child Tax Credit (CTC) payments were a basic income provided to nearly every parent in the U.S. Data showed the CTC payments led to significant decreases in food insecurity and child poverty, and lifted 3.7 million kids from poverty in December alone. With Congress failing to re-authorize the CTC through the Build Back Better Act, researchers at Columbia University estimate four million children were pushed into poverty last month as a result.

    The data shows us that the Oregon Freedom Pilot Program would have provided a desperately-needed financial lifeline and the promise of new opportunities to thousands of the most marginalized Oregonians. It is also time for Oregon to join the ranks of states and nearly every major city across the country testing out basic income programs — the state has traditionally led the country in showing what is possible, but in this case is lagging behind. This has led Income Movement to lead the effort on building a state-wide coalition for basic income in Oregon. We’ll share more about this in the coming months.

    While HR 4079 did not advance during this legislative session, Income Movement has been working with Rep. Witt’s office to build support for its reintroduction next session. This is also something voters want — in just 24 hours, 600 letters were sent in support of the legislation to the House Committee On Human Services, the committee that failed to moved the bill forward.

    Foster children and single mothers are too often left behind by our economy and society. The Oregon Freedom Pilot is a critical step in changing that reality and toward a vision of a state in which everyone is afforded the same opportunity to not just survive, but thrive.

    Stacey Rutland is the Founder of Income Movement.

    The post Oregon Lawmakers Drop the Ball on Basic Income appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • An Enhanced Child Tax Credit Aids Entrepreneurship

    BY: TAHRA JIRARI

    Original Post: https://www.niskanencenter.org/an-expanded-child-tax-credit-aids-entrepreneurship/

    Despite the best efforts of advocates, the expanded Child Tax Credit (CTC) expired in 2021. Some in Washington, including Senator Joe Manchin (D-WV), argue that the expanded credit discourages parents from working. As this long-standing debate continues, some new data on how the CTC may spark new business formations might help allay related concerns about workforce participation.

    According to a recent study, the CTC increased self-employment among low-income recipients by 2.9 percent. This was predominantly in low-income households and Hispanic, Black, and Asian families. Figure 1 illustrates how the rise in self-employment varied across income groups. On a percent basis,  the highest increase occurred in self-employed individuals with incomes in the $0 to $49,999 range, signaling the expanded credit allowed families to become entrepreneurs and start businesses.

    Figure 1: Type of Employment among CTC-Eligible, by income

    Source: Washington University in St. Louis Social Policy Institute and Appalachian State University

    These findings align with a 2016 study that showed that the Supplemental Nutrition Assistance Program (SNAP) spurred new business creation. The SNAP benefit increased the rate of business formation and saw newly-eligible households were 20 percent more likely to own a business. These findings led the study’s author to observe, “entrepreneurs are actually more likely than any other American to receive public benefits.” Overall, the benefit’s expansion led to growth in labor supply equaling 1.1 million additional workers. 

    If you expand public programs, you support entrepreneurship 

    While SNAP only supplies in-kind (non-cash) benefits, the CTC provides direct cash payments granting more flexibility in spending habits. Comparatively, “after three months of the guaranteed monthly payments, the amount of parents with incomes under $50,000 describing themselves as self-employed increased by 22%.”– a much higher rate given the short time frame, in contrast to the SNAP study, which measures the impact over a 15-year interval.

    This increase in self-employment stems from the added financial flexibility cash transfers offers. It allows families to address costs, such as child-care, transportation, and education-based tools and put the remaining funds towards expanding their business.

    Both studies suggest that aid allows people to invest in new businesses at a slightly higher rate with the flexibility of cash payments.

    As our colleague Samuel Hammond has argued, strong free markets and robust income security are interdependent. Promoting productive risk-taking and entrepreneurship through monthly benefits acts as an unconditional income floor, providing households with certainty while protecting entrepreneurs from volatility. 

    Although some policymakers remain concerned about the potential to disincentivize workforce participation, recent CTC data highlights that the expanded benefit increases self-employment. If families are receiving monthly benefits, they are better positioned to take entrepreneurial risks and seek self-employment. With a lapsed expanded CTC, we are preventing the growth of entrepreneurship in America. 

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  • Lawmakers propose $1,300 ‘relief’ checks to Alaskans from unexpected boost in state revenue

    By: Iris Samuels, James Brooks

    Original Post: https://www.adn.com/politics/alaska-legislature/2022/03/02/lawmakers-propose-1300-relief-checks-to-alaskans-from-unexpected-boost-in-state-revenue/

    Lawmakers in the Alaska House are proposing a plan to pay Alaskans an additional $1,300 on top of the annual Permanent Fund dividend, lawmakers said Wednesday. The amount of this year’s regular dividend has not yet been set.

    The “Energy Relief Check” would use some of the state’s unexpectedly high revenue this year to pay residents so they can offset rising fuel costs, record inflation and recovery from the COVID-19 pandemic, lawmakers in the House majority said in a written statement.

    “Between the negative economic effects of COVID and escalating energy costs, our residents are suffering,” said Speaker Louise Stutes, R-Kodiak, in a statement.

    “With the influx of new revenue, we are in a position to provide an Energy Relief Check to Alaskans and that is exactly what the House Coalition intends to do.”

    Alaska revenue officials are expecting hundreds of millions of dollars in new revenue. The announcement came as crude oil prices surged amid the ongoing Russian assault on Ukraine, which could further enrich state coffers.

    The plan would cost the state $875.1 million, according to Joe Plesha, communications director for the House majority.

    Rep. Neal Foster, D-Nome, said rising oil prices have a double effect in Alaska.

    “It’s two things. It’s the coffers — we’re going to get more money into the state — and people are going to feel that at the pump.

    So as we get more money and people are feeling the squeeze, we need to try to provide some relief for Alaskans,” Foster said.

    This is not the first time lawmakers have proposed payments to Alaskans on top of the Permanent Fund dividend. In 2008, the Legislature, pushed by then-Gov. Sarah Palin,approved $1,200 “resource rebate” checks for Alaska residents as a way for the state to share some of its multibillion-dollar oil revenue surplus.

    Foster said lawmakers were influenced by the 2008 program in coming up with the current plan. Like then, the payments would go to all Alaskans eligible for the Permanent Fund dividend. Eligibility would be based on the 2022 dividend and payments could come in a single lump sum, Foster added.

    The 2021 dividend to Alaska residents was $1,114.

    Republican Gov. Mike Dunleavy proposed in December using some of the surplus revenue to give out a $1,250 spring dividend on top of his proposal for a $2,564 2022 Permanent Fund dividend.

    In a Twitter post, Dunleavy said the House coalition’s announcement is “better late than never.”

    “For months now, I have been pointing out that rising oil prices are benefitting government finances but are hurting Alaskans,” Dunleavy wrote.

    Independent governor candidate Bill Walker was quick to endorse the plan Wednesday.

    “Alaskans are getting hammered by high energy costs. Oil prices are higher than they’ve been in over a decade. The calculation is easy: get help out the door,” Walker said in a statement.

    Democratic governor candidate Les Gara endorsed the idea later in the day on social media, saying that “the House was right to announce an energy relief check.”Iris Samuels

    ______________________________________

    About the Author: Iris Samuels is a reporter for the Anchorage Daily News focusing on state politics. She previously covered Montana for The Associated Press and wrote for the Kodiak Daily Mirror.

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  • Why means-testing is not efficient or fair

    Means testing does not work like universal benefits, it denies people entitlements they have contributed to and are eligible for

    By: Peter Beresford

    Original Post: https://www.politico.com/news/magazine/2022/02/28/world-war-iii-already-there-00012340

    There are increasing calls for means testing more benefits. These are fertile times for such proposals and they are grabbing attention. It comes at a time when the government is cutting back on public spending in the name of reducing the deficit and when more and more people are feeling the pinch and are worried about money.

    Means testing has been introduced for child benefit and is now being suggested for a wider range of benefits, particularly for older people. High profile candidates have been the travel pass and the winter fuel allowance. All older people are currently entitled to these.

    The arguments offered for more means testing are invariably warm, positive and helpful ones. They tend to go something like this:

     Many of the people who receive such payments don’t really need them. In fact they often say so themselves. It is thus wasteful and inappropriate that they should be getting them.

     It is especially unhelpful at a time of serious cuts in budgets, when it’s really important to focus what money there is, as wisely and carefully as possible to meet the greatest need.

     It’s hardly fair to those who are really in want, if others who are far from that situation get the same benefits. It’s unjust and means that what resources there are aren’t being properly targeted to those most in need. If that money wasn’t being wasted on those who don’t really need it, it would go to those who do.

    The arguments given for means testing are always benign and generally reflect a concern with efficiency, the wellbeing of the most disadvantaged, and fairness.

    Means testing benefits will not be efficient or fair

    But if society was a small family and politics like housekeeping, that might be enough said. But governments, politicians, political ideology and social policy, as we all know, just aren’t like that. So it’s helpful to look at this issue of means testing versus universal benefits, not from our experience of divvying up domestic budgets, but from the real and very different perspective of how politics and policy actually work.

    And what we actually know about means testing is that it tends not to be efficient, fair or in the interests of the most disadvantaged.

    One of the great strengths of universal benefits is that it is simple and economical to administer and operate. The opposite is true of means testing.

    What means testing generally means is a lot more bureaucracy. This is quite likely to eat up any apparent savings that it is suggested it will make possible. It’s no different in our computerised age. All that has meant is huge IT-system bills that almost invariably end up unfit for purpose.

    Means tested benefits aren’t actually fair. It has long been known that large numbers of needy people tend to miss out on such benefits. Either they don’t know about them, they don’t realise they are eligible for them, or perhaps, particularly important, they are reluctant to claim them.

    This is because they have increasingly been encouraged to think of receiving benefits as meaning being dependent and “not standing on their own two feet”. This is especially well known about older people and can result in them encountering health and other problems from under-claiming, which ultimately increases costs, as well as failing to ensure their access to entitlements.

    When benefits have been universal, people have paid for them in their taxes. To change them into means tested benefits – as has recently been happening – is quite simply a fraud, denying people entitlements they have contributed to and earned.

    Means testing hurts those who are neither rich or very poor

    Means testing always hurts people who are neither rich or very poor. Because there’s always a cut off point, some who are far from well off and who would “genuinely” benefit from them are excluded.

    There are also many people who may seem comfortable to the outside world, but who don’t necessarily feel so themselves. So they are frugal for fear of rainy days, not realising that the rain has already come.

    Thus, older people who could afford an occasional taxi to make up for the inadequacy of public transport see it is a luxury they can’t afford. They increasingly stay at home. The resulting isolation is strongly associated with bigger physical and mental health problems. So cutting travel passes can actually end up causing greater public expense.

    One of the great strengths of universal benefits is that they create a sense of solidarity and shared understanding. Means tested benefits create the opposite, divisions and misunderstanding.

    When benefits are universal it means that there are better placed people concerned to fight for them. That has always been one of the strengths of child benefit. When benefits are means tested, they lose these advocates and the most disadvantaged, with much weaker voices, don’t have the political clout to ensure that they stay sufficiently resourced and constantly uprated. It’s a vicious circle.

    Of course, there’s the argument that getting rid of universal benefits means that the jam can be spread more fairly. Please show me one example where cuts made in one valued service ever resulted in politicians spending more on another valued service.

    Speaking as someone who had the misfortune to spend years living on means tested benefits and was delighted to be able to escape them, I’d also ask how many of those who proclaim their virtues have anything other than an ideological interest in the issue.

    Put another way, how many of them have ever had to rely for any length of time on such benefits or go through the process of getting them? Not many I would suggest. The rest of us should steer clear of them too.

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  • A child tax credit bill has passed the state House in Vermont and has moved on to the Senate

    A child tax credit bill has passed the state House in Vermont and has moved on to the Senate.

    By: Stephen Silver

    Original Post: https://nationalinterest.org/blog/politics/child-tax-credit-advances-vermont%E2%80%99s-state-legislature-200759

    While the federal government’s expanded child tax credit may have expired at the end of 2021, one state is pursuing a credit of its own. A child tax credit bill has passed the state House in Vermont and has moved on to the Senate. 

    According to the Longview News-Journal, the bill “would create a refundable child tax credit of $1,200 for children age 6 and under,” with a payment scheme similar to that of the federal version in 2021: Half would be paid out in monthly installments, with the other half paid when the person’s income tax return is filed. 

    According to the Vermont state legislature’s website, the bill is now in the state Senate and is under consideration by the Senate Committee on Finance, to which it was referred on February 11. However, it’s unclear what Gov. Phil Scott, a Republican, will do with the legislation if it reaches his desk. 

    When the expanded child tax credit passed last year at the federal level, various studies showed that it succeeded in reducing child poverty. Now that it has expired, another study found that poverty has again increased. 

    Columbia University’s Center on Poetry & Social Poverty issued a report on February 17 that found the monthly child poverty rate “increased from 12.1 percent in December 2021 to 17 percent in January 2022,” with 3.7 million more children in poverty in the first month without the credit. 

    “Between July and December 2021, the Internal Revenue Service (IRS) paid out six months of advance Child Tax Credit payments worth up to $250 per child aged 6 to 17 and up to $300 per child aged under 6, reaching over 61 million children in over 36 million households,” the Center’s study said.

    “On its own, the monthly Child Tax Credit kept 3 million children from poverty in July; by December, it was keeping 3.7 million children from poverty and reducing monthly child poverty by 30 percent.

    A roundup of the available research reveals that the monthly Child Tax Credit payments buffered family finances amidst the continuing pandemic, increased families’ abilities to meet their basic needs, reduced child poverty and food insufficiency, and had no discernable negative effects on parental employment.”

    Politicians have been citing the report since its publication last week. Notably, Rep. Alexandria Ocasio-Cortez (D-NY) blamed Sen. Joe Manchin (D-WV) for blocking the passage of the Build Back Better bill, which would have extended the credit by an additional year. 

    “One US Senator ‘heard stories’ about people allegedly using the Child Tax Credit ‘for drugs’ without any evidence or data to back it up,” Ocasio-Cortez said in a Twitter post that shared the report. “He then used that as justification to nuke the entire national program, causing millions of kids to fall into poverty in weeks. Horrifying.”

    _____________________________________

    About the Author: Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

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  • Opinion: Don’t let leaders fail our most vulnerable

    By: Stacey Rutland |

    Original Post: https://www.statesmanjournal.com/story/opinion/2022/02/18/dont-let-leaders-fail-our-most-vulnerable/6792301001/

    During the current legislative session, the Oregon House Human Services Committee lacked the courage to move forward with a planned public hearing on House Bill 4079.

    The bill outlined a guaranteed basic income pilot, or monthly checks to support thousands of our most vulnerable Oregon community members: foster youth and single moms and their children.

    Hundreds of Oregonians wrote testimonials and registered to tell their stories during the open hearing. The House of Human Services Committee silenced these voices. They canceled the hearing a few hours before it was scheduled to commence. I planned to share my own experience, but these leaders did not afford me that opportunity.

    I’m grateful to have the chance to share it here. My sister and I were raised by a single mom. My mom always worked. She waited tables, cleaned houses, cut trails in the summertime for the Forest Service. But we lived in places where rent was high and utility bills ballooned in the cold months.

    If the restaurant closed or a family no longer needed my mom to clean their home, we would struggle. Even a couple of weeks of not having income meant we could not pay rent. We would move out of our home to avoid eviction and stay in living rooms and tents or trailers in the back yards of friends so mom could save up to rent a new place.

    My sister had a similar experience, leaving her abusive partner. She was a new mother, in the process of getting her undergraduate degree while working full time. Her partner beat her and threatened to kill her family if she left.

    When she did leave, our family went underground. We lived on people’s couches while we figured out what to do next, her son celebrating his first birthday hidden in the home of an old family friend we hadn’t seen for more than 20 years.

    When our son was six months old, my husband was diagnosed with myelodysplastic syndrome – a precursor to leukemia. A year later, he died. The government immediately started to give me $1,000 a month, the Social Security support designed to help me raise my child.

    Of these three different family stories of single motherhood, mine is the only one where direct cash from the government was part of the support received. As a result, my son is the only child in our family who has never experienced homelessness. He’s never had to live on different couches in the living rooms of family friends. He has never known hunger.

    This is what fuels my work as I fight for a guaranteed basic income in Oregon and across the country.

    When I started to receive Social Security, the government wasn’t worried that I would use the money to buy drugs or alcohol rather than spend it on my child. Nobody asked that I take classes to learn how to manage my money, or assumed that my need for support was because I was incompetent. The money didn’t get taken away as I got better-paying jobs.

    The program, in essence, was not punitive, thus different from the majority of our social safety net programs. Instead, it was built on trust – an acknowledgment that I alone knew what my child needed most and could make the best decisions for our family. With direct, monthly payments, my son and I thrived.

    Offering foster youth and single mothers, two groups facing significant barriers to economic security, the same stability of a basic income, will be nothing short of transformative.

    Early data from the Stockton Economic Empowerment Demonstration, a pilot that offered recipients $500 monthly for two years, showed the money improved everything from the ability to secure a full-time job to mental and physical health. Results from the Magnolia Mother’s Trust, a guaranteed income program that provides $1,000 a month to Black mothers living in extreme poverty, shows similar promise. Mothers who received the money were more likely to have children performing above grade level, to have money saved, to go to the doctor when they were sick.

    HB 4079 could have brought these benefits to thousands of struggling Oregonians while contributing to data informing the design of the wider-reaching policy. Foster children and single mothers are too often left behind by our economy and society.

    In refusing to pursue this legislation our leaders have failed to move us toward being a state in which everyone is afforded the same opportunity to not just survive, but thrive.

    ________________________________________

    About the Author: Stacey Rutlund is the founder and president of Income Movement, a nonprofit headquartered in Portland, working to advance basic income at the local, state and national levels. You may reach her at stacey@incomemovement.com

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  • Opinion: Those of us who grew up in foster care know how dire the need is for basic income

    When kids age out of foster, they are at their most vulnerable. This is where UBI can do a world of good.

    By: Kenny Murray

    Original Post: https://metro.co.uk/2022/02/18/those-of-us-who-grew-up-in-care-will-know-how-needed-financial-help-is-16128474/ |

    I remember sitting exams and weighing up whether to get the bus home or skip lunch.

    I graduated from high school with strong qualifications and went to university only to be unable to afford the rented accommodation that many of my peers had accessed with parental help. 

    Even access to a student overdraft was out of reach, stopped in its tracks by my lengthy address history.

    For other care experienced young people, like me, these stories will feel familiar. 

    Every year across the UK, thousands of young people find themselves no longer eligible for help from a care system they’ve grown up in. 

    There’s a variety of reasons for this, including social workers removing their supervision order, therefore excluding them from the care they’d been used to, or the young person moving to a different part of the country. 

    While some young people receive help until they’re 26, it’s far from universal. 

    For many, that experience is a cliff edge, precarious in nature and fraught with risk.  

    I know this all too well because I lived it and experienced the brutal impact of the lifeline that the care system provides being ripped away. 

    That is why I’m excited by the news that the Welsh Government is piloting a scheme to deliver a basic income of £1,600 for care experienced young people.  

    For many young people leaving care, the support that currently exists is simply about helping them to survive.

    But getting access to it often demands young people jump through hoops, fill in endless forms and face an interrogation to access help. 

    A basic income comes with an inherent trust, which we all deserve. A basic income could set the foundation for them to thrive.

    Poverty is one of the main reasons that children in the UK find themselves in the care system.  

    As families in 2022 continue to come up against a rising tide of increasing living costs and struggle with the impact of intergenerational poverty, children are often removed from their parents and placed into environments in which they are meant to be better off. 

    In my experience of the care system, class and geographical divides were all too apparent. I spent time with family members who received little to no help. 

    I was taken into a children’s home when I was 11 that paid people a salary to look after me and later lived with a series of foster families all from different parts of the socio-economic scale; all provided benefits and allowances by the government that were denied to my biological family. 

    The government probably paid at least tens of thousands of pounds for my care, and local governments in England will spend over £10 billion on children’s social care in the current financial year. 

    However, it can seem that government investment in care experienced people stops very quickly into adulthood, if it even extends that far. 

    For most of the population, financial backing from parents continues well into adult life. 

    The average age at which someone moves out of their parents’ home has been steadily rising, and you only have to hear mentions of ‘the Bank of Mum and Dad’ to realise how important the role of parents is.  

    Frankly, this isn’t something on offer for many care experienced people.

    If the care that young people are provided is to be considered an investment, then the return on investment for the individual isn’t really there. 

    Statistics, which don’t tell the entire story, reveal that young people in care often have poorer outcomes than their non care experienced peers. 

    For some this has devastating impacts including death, homelessness and poor health for a lifetime.   

    Basic income has the power to change that for the better.  

    In trusting people with access to a livable amount of money, we’re directly giving them control over their future. It’s a radical way of improving the lives of vulnerable people. 

    Instead of propping them up with the bare minimum, the Welsh Government is doing something world-leading in this pilot.

    The Welsh scheme is based on the broader concept of Universal Basic Income, and there are already many detractors who worry about what the money will be spent on – claims that it will disincentivise people from looking for work, or worse, place young people in danger

    Personally, I’d like to know where that concern for the welfare of care experienced people and others in poverty was before the idea of basic income was announced.  

    My theory is that a lot of critics simply don’t see the sense in investing in a population they’ve already written off.

    I don’t see how basic income isn’t just a different iteration of any number of schemes that people from all walks of life use like access to business grants, help to buy mortgages, or even furlough. 

    Basic income simply gives financial backing to care experienced people without the bureaucracy of judgment and shame that accompanies accessing charitable help, like using social work issued vouchers or filling in discretionary forms where you’re encouraged to lay out how miserable your life is to get a crumb of help.

    I know this will make an impact because it would have helped me. 

    I cringe at reading feedback notes from my first graduate interview at a global PR agency where my cheap clothes that didn’t really fit my slight frame led to me being described as ‘a wee boy in his dad’s suit’ by an interviewer. 

    This scheme, which should be rolled out nationally, would have helped me get a secure home, access to warm clothes, food, and, perhaps most importantly, a sense of dignity. 

    The post Opinion: Those of us who grew up in foster care know how dire the need is for basic income appeared first on Basic Income Today.

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  • Universal basic income discussed as solution to Reno’s affordable housing crisis

    By: Tabitha Mueller |

    Original Post: https://thenevadaindependent.com/article/reno-to-discuss-critical-need-for-affordable-housing |

    Amid growing unease about skyrocketing rental and home prices, Reno’s city council held a special meeting Tuesday to discuss solutions that may alleviate pressure on the market and increase affordable housing.

    Over the last five years, one-bedroom apartment prices in Reno jumped almost 91 percent from a median of $668 a month in 2017 to $1,275 in 2022. Home prices have also surged, hitting a record-high median price of $570,000 for the Reno-Sparks area last month.

    Marci Camp is one of the city’s residents experiencing the crisis firsthand. Standing before the council during public comment, she described how she and her neighbors are facing a more than 36 percent rent increase. She does not know where else they can go.

    “My income is not negotiable,” she said. “Many of us are disabled and seniors … we’re not sleeping, we’re in fear, we’re in anger and our family of neighbors is being disbanded.”

    The seemingly unrelenting price hikes have made it difficult for most families to afford rent or mortgages, Mayor Hillary Schieve told The Nevada Independent during an interview Sunday. At the meeting, Tuesday, she and other staff and council members reviewed the city’s growth trajectory and discussed ongoing efforts to curb housing costs and other steps the city could take.

    “There’s no one-size-fits-all solution,” Schieve said. “We’ve got to do whatever we possibly can.”

    The city’s options are limited by the scope and authority of local government, though, meaning the city doesn’t have explicit permission to implement policies such as a rent control law.

    But Schieve said the council could increase housing options and work with state and county leaders to address housing insecurity by combining resources with other jurisdictions and offering supportive services such as helping residents access housing subsidies and providing mental health services.

    During the meeting, Councilman Devon Reese also brought up the idea of exploring universal basic income, or a fixed-dollar allowance for residents, to help address the housing crisis. Municipal leaders in Stockton, California launched a similar program in 2019.

    “We have to be willing to fail,” Reese said. “I’m trying to find what are the innovative approaches communities are doing and perhaps one of them is a universal basic income.”

    Councilwoman Naomi Duerr said she’s seen larger corporations with a portfolio of apartments spread across multiple states generating rent increases without cause, and said she would like to look into how to incentivize landlords not to raise rents unnecessarily on tenants.

    One way to drive down housing costs is to increase the amount of housing stock, as part of a supply-and-demand equation, Schieve said on Sunday. Through programs such as the city’s “1,000 Homes in 120 Days,” which offer developers local permit fee deferrals that act as no-interest “loans” to attract more construction, the city could boost inventory, eventually lowering demand and prices. 

    As of March 2020, 2,107 units had been approved to be built through the program and 1,521 were set for future review. City offices were closed Monday for Presidents Day and were unable to respond to a request for an update on the number of units built through the program.

    Additionally, the mayor said she and her staff are looking at increasing the amount of mixed-family zoned developments and allowing for homeowners to build separate living units on a property, such as a mother-in-law apartment. Her remarks arrive in the wake of ProPublica reporting highlighting the lack of replacement for city-approved demolitions of weekly motels, which are one of the few affordable housing options in the area for residents on fixed incomes.

    Various state officials and other community leaders were on hand for the special meeting, including State Treasurer Zach Conine, who noted that through a partnership with the AFL-CIO Housing Investment Trust and the Building and Construction Trades of Northern Nevada, the state is working to develop a pipeline of affordable housing projects in Washoe County and across the state. 

    Because the city has limited resources and Washoe County has primary responsibility for Northern Nevada’s homeless services, Schieve said this is a team effort and she is looking to other jurisdictions for assistance.

    “We will build it, but then [the county has] got to bring the supportive services,” she said. “That is what they do, but we all have to be doing it together.”

    The city plans to host meetings focused on affordable housing every three weeks, Schieve said. She hopes the meetings encourage more community input and participation as the city confronts the housing challenges.

    The affordability factor

    But Schieve said it’s not as easy as simply building new homes or apartments.

    Affordable housing units built under the federal Low-Income Housing Tax Credit program receive federal tax subsidies that partially offset construction costs. Federal law sets a limit on the income level of tenants and the amount of rent that landlords can charge them.

    Property owners are required to maintain affordability (as defined by the terms of a tax credit agreement) for a timeframe of 15 to 30 years. At that point, owners can either renew the affordability status or drop it and rent or sell their property at the market rate.

    During the 2021 legislative session, lawmakers passed SB12, a law requiring property owners with affordability restrictions that are subsidized and under the oversight of the Nevada Housing Division to notify local governments and tenants a full year before they intend to let restrictions expire.

    State lawmakers said this would give local governments time to react to affordable-designated units coming off the market. Still, with market rates as high as they are, Schieve said there’s a minimal incentive for owners to keep the housing affordable.

    About 6.2 percent of Reno’s housing units are designated as affordable housing for low-income earners, Reno’s Neighborhood Development Division Manager Monica Cochran said during the meeting. She said the city is working on seeing what it can do to encourage developers or property owners to keep housing from going back to market rate, including offering funding to rehabilitate and maintain buildings.

    Additional funding on the horizon

    Along with a discussion on land use and zoning, the council weighed in on how to best spend the city’s share of federal American Rescue Plan Act (ARPA) funding for affordable housing projects. Council members voted in January to set aside more than 50 percent of the nearly $25 million the city received in ARPA funds for affordable housing.

    On Tuesday, council members directed staff to allocate $2.5 million of the ARPA funding toward a proposed expansion of Sage Street dormitory housing and $2 million toward the purchase and renovation of a 35-unit highway motel that could be used to house senior citizens and veterans, pending terms of ownership and operations. 

    Though the state’s housing division could not commit an exact dollar amount to the two projects because it is still waiting to hear how much it is set to receive through state ARPA funding, Administrator Steve Aichroth said the division is excited about contributing funding to the two projects.

    During the pandemic, the city received funding from the federal CARES Act that allowed it to set aside resources to help people pay rental deposit fees and create crisis relocation vouchers. The influx of funding also allowed Reno to help construct the Nevada Cares Campus, a 46,000-square-foot shelter. 

    Schieve said the ARPA funding would enable the city to develop workforce, transitional and other affordable housing beyond what was allowed under the CARES Act.

    “We never had the financial ability to do anything and now with this federal funding, we are finally now going, ‘Wow, we can take this money and we can really build housing,’” she said. “We’ve always had to rely on private development. So you always have to do a private and public partnership.”

    The Reno Gazette Journal reported that the Reno Housing Authority is considering purchasing the former Sundowner Casino Hotel and Bonanza Inn as part of a 1,000-unit project focused on workforce housing (housing that is affordable to workers and near their jobs) backed by Schieve and developer Jacobs Entertainment. Though the housing authority has submitted an offer to buy the inn and a letter of intent to make an offer on the Sundowner and Bonanza Inn, the bids are not public. Schieve said nothing has been finalized yet.

    “I would love to see that be workforce housing right downtown,” she said. “A lot of service workers downtown [make] very little wages and these are people that would never be able to qualify for a mortgage, but then they don’t qualify for financial assistance because they make too much.”

    Though the housing authority requested $13 million from the city’s allocation of ARPA funds to help it purchase the two properties, council members did not take action on the request and instead called for a future special meeting to consider a more detailed request.

    Even with the additional ARPA funds, Schieve warned that it takes time to bring housing projects to life. 

    Construction timelines could be hampered by pandemic-related supply shortages, a problem that can’t be solved even with the additional federal funding. 

    “We’ve got to explore every option because people need it. And they need us now more than ever,” she said. “We’ve never seen this financial ability to do it … and we have to keep trying.”

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  • Murphy: I’m 25. I don’t have children. But I know the Child Tax Credit is an opportunity we can’t afford to miss.

    Data confirm that the Child Tax Credit is more effective anti-poverty legislation than many of its policy peers yet it has lapsed. What’s next?

    By: Connor Murphy.

    Original Post: https://www.loudountimes.com/opinion/murphy-i-m-25-i-don-t-have-children-but-i-know-the-child-tax/article_9d795676-8f71-11ec-a85a-b3d980ba4e27.html

    Leesburg mother Nicole Lee recently wrote to the Times-Mirror, explaining the importance of the Child Tax Credit to her family. For her, this meant added support for her son, Seamus, who lives with high-functioning autism. Amid rising costs at the gas pump and grocery store, the CTC enabled her family to support him with social skills classes and therapy.

    All of that support for Nicole and millions of parents nationwide is at risk today, as monthly payments have ceased. Congress has a complex and challenging year ahead, with tenuous circumstances abroad, hearings on a Supreme Court nominee ahead, and midterm elections around the corner. It would be easy for them to let extending the Child Tax Credit slip from the list of priorities to act on in 2022. But, it would be a mistake.

    I’m 25 years old. I was born and raised in Loudoun County. I don’t have children, but I know this policy is an opportunity we cannot afford to miss. Here’s why:

    Data confirm that the Child Tax Credit is more effective anti-poverty legislation than many of its policy peers. A recent story by Pro-Publica observed that policies like TANF, which involve a labyrinth of red tape to not only qualify for, but receive, was significantly less effective policy for supporting families due to the limited access provided to families. $5.2 billion funding for TANF is going entirely unused, instead of performing its appropriated intent.

    In contrast, six monthly payments of the Child Tax Credit avoided red tape and lifted nearly 4 million children from poverty in doing so, according to Columbia University. Another 6 million were lifted from deep poverty. In the first monthly payment alone, the U.S. Census Bureau tracked a 24% reduction in food insufficiency among recipient households.

    I wouldn’t be surprised if you had to read that again to understand the gravity of this policy. One in four households with children in America were no longer hungry after one direct payment from the Child Tax Credit. That is staggeringly effective public policy at work.

    Children who are fed, clothed and given shelter have brighter futures ahead of them. They’re able to learn more, lead healthier lives and grow into adults who strengthen our communities.

    We also know that CTC has neutral workforce participation effects or better for parents. According to a recent analysis of Census Pulse Survey data, Washington University in St. Louis’ Social Policy Institute found that there is no evidence “that CTC payments are leading to people leaving the workforce.”

    Financially secure adults are also more likely to start businesses and employ others in their communities. Further research from the Social Policy Institute found that an additional 3% of households earning under $50,000 each year, or an estimated 300,000 households, were encouraged by the Child Tax Credit to start their own small businesses.

    Finally, and perhaps most importantly to skeptics of the policy, analyses of CTC determine that it is extremely cost effective. As it turns out, sending direct cash to American families produces some of the best returns on investment for taxpayer dollars spent on social programs. For every dollar spent directly on reducing child poverty, Congress saves eight dollars in crime reduction, healthcare costs, and other costs associated with children who grow up without being able to escape poverty.

    I may not benefit from the CTC directly, but I will be better off because I’m living in an interconnected world that thrives when others prosper.

    Some day, I will be a father in this community where I grew up. Our representatives will have another little person or two to think about in Washington. I would urge them to not let perfect be the enemy of the good, and find a way to reach a compromise with their peers on this policy. If efforts to extend the Child Tax Credit succeed, I’ll be glad to know that the future of all children – mine included – will be brighter.

    The post Murphy: I’m 25. I don’t have children. But I know the Child Tax Credit is an opportunity we can’t afford to miss. appeared first on Basic Income Today.

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  • Lee Jae-myung’s universal basic income would change South Korean society

    Scheme could tackle inequality, promote fairness, Lee’s top adviser says

    By: Ko Jun-tae

    Original Post: http://m.koreaherald.com/view.php?ud=20220214000271

    Bringing universal basic income to South Korea is central to the socioeconomic vision of Lee Jae-myung, the presidential nominee of the ruling Democratic Party of Korea.

    Under the scheme, citizens would unconditionally receive the same sum of money each year, a plan touted by Lee and his aides as a means to tackle growing inequality and provide funds for people to sustain their livelihoods should difficulties arise. Some will receive more based on their social and economic standings.

    Kang Nam-hoon, an economics professor with Hanshin University and one of the main economic advisers to Lee as an official member of his presidential election campaign committee, says the concept will be central to how South Korea would run if Lee wins the race in next month.

    He has been nicknamed by some in the country as the father of universal basic income.

    In an interview with The Korea Herald last week, Kang said that his vision for universal basic income was well represented in the promises Lee made since officially announcing his bid for presidency in July. He believes the scheme, if executed well, could help resolve many conundrums Korea faces today, and help the country set itself apart from other welfare-centered nations.

    “The concept of universal basic income could bring an end to the vicious circle that South Korea has faced for years,” Kang said.

    “Welfare programs fall short, and for that reason, people don’t want to pay taxes, not to mention that the government isn’t so trusted by the people. These three things come in a cycle and form a vicious circle.”

    By bringing universal basic income to life, first without raising any additional taxes, the country will break the cycle, Kang says.

    Under Kang’s vision, all South Koreans would first be given base income of 1 million won ($833.48) a year. Young citizens aged 29 or below will be given 1.2 million won more, and 1 million won will be additionally provided to those aged 60 to 64.

    The lowest-earning 70 percent of over-65s will be given up to 400,000 won more each, and those in rural areas will be entitled to 1 million won more a year. All of these funds would be provided for local governments to distribute as cash or spending vouchers.

    Kang believes the scheme could help people stay motivated to pay taxes and raise support for the government if everyone physically feels the benefit of doing so by receiving cash in their hands in return.

    “Universal basic income can boost consumer spending and help the vulnerable class sustain their lives and avoid extreme poverty,” Kang said. “This could help Korea cut loose from a vicious cycle and enter a positive growth curve without increasing the tax burden.”

    The economist envisions the scheme to be expanded so that all citizens are given a payment of up to 5 million won a year, which would require additional tax income. Kang says the needed funds can be raised by levying taxes on carbon emissions and by collecting “dividends” from land owners.

    Welfare policies in place, including those that pay stipends or cash to those in need, will remain, but policies could be adjusted later to meet that ultimate threshold, he added.

    “In the end, if the vision holds as it is now, the country will be providing around 10 percent of its gross domestic income to people as universal basic income,” Kang said. “But the amount should not go over that threshold, as inefficiencies could rise if any greater amount is given.”

    The adviser emphasized the amount of basic income should not be enough for people to lose motivation to join and stay put in the employment market, responding to critics who have claimed that the scheme could throw the job market under a negative spin by incentivizing people to stay unemployed.

    Yet he added the scheme must be prepared to make adjustments along the way depending on economic situations, raising the need to create a public entity that draws participation from people in setting goals and establishing timelines for universal basic income policy.

    “The policy itself is for the greater good of people, and for that reason a commission could be established under presidential authority,” he said.

    “This entity will ask people from diverse sectors to take part in discussions while collecting feedback on implementing taxes as we suggested.”

    If the scheme works as planned, Kang claims South Korea will be poised to carry out long-held reforms to its national pension system, which is burdened with shrinking deposits due to an aging population. As people already have resources in hand to maintain their livelihoods, the very needed reforms could take place without necessarily damaging the lives of the people on its course, he said.

    Kang also believes that South Korea will no longer need to abruptly raise its minimum wage level every year, a pattern that occurred during the Moon Jae-in administration, and was much criticized for burdening the economy.

    The country’s minimum wage is set at 9,160 won per hour this year, up 41.6 percent from 6,470 won set for 2017, the year when the Moon administration came to power.

    Kang said Lee’s government will be different from Moon’s in that the minimum wage will no longer be aggressively hiked, assuring that the rate will only change to meet the’ trend of economic growth and inflation.

    “The fault of the Moon government’s economic policies, including the income-led growth scheme, was aggressively hiking the minimum wage beyond its capability,” Kang said. “The amount of welfare given to people should have increased, not just the amount of money in their hands.”

    The economist acknowledged that bubbles could form in the domestic stock market if retail investors plow their share of basic income into shares, but asserted that providing educational guidelines and resources would be enough to prevent them from overly involving themselves in volatile investments.

    “I’m a person who thinks the stock market should be provided with more monetary investment,” he said. “What retail investors do is not so speculative, and I believe encouraging them to make long-term investments with education will be enough to escape a bubble cycle.”

    Kang remained optimistic that the idea will gain popularity again among young voters, as he believes that non-supporters of Lee are against the idea not for its real value but from the fact that it is pushed by a candidate they do not favor.

    A survey from Uri Research commissioned by Segye Ilbo on 1,000 adults from Jan. 18 to 19 found that 60.7 percent of respondents in their 20s were against the idea of universal basic income, and the rate stood at 58.2 percent for respondents in their 30s.

    The two age groups are touted as “swing voters” for the upcoming election, and experts believe the groups have potential to decide the winner of the ongoing presidential race.

    “Young people might think they have to pay more taxes if universal basic income is in place, but it’s totally the opposite of that,” he added near the end of the interview.

    “If pension funds dry up in 30 years, young adults will be paying around 10 percent more in taxes for the elderly population. The universal basic income scheme can help them avoid the burden of increased taxes.”

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  • Welfare Is No Substitute for a Child Tax Credit

    Some in Congress say the child tax credit isn’t needed because Temporary Assistance for Needy Families is a success. Our reporting found it’s marked by repeated failures.

    By: Eli Hager.

    Original Post: https://www.propublica.org/article/welfare-is-no-substitute-for-a-child-tax-credit

    Those in Congress who are blocking President Biden’s proposed child tax credit — a monthly federal stipend for families with children of up to $300 per child — have been making a curious claim of late. They’ve been saying that there is already a highly effective cash assistance program for low-income parents and kids: Temporary Assistance for Needy Families, or TANF.

    If the child tax credit were to be provided to these families going forward, “all the requirements that apply to those receiving TANF … would be gone,” said Sen. Chuck Grassley, R-Iowa, in October.

    Doing so would “shatter a decades-old consensus” that TANF has successfully transitioned people from welfare to work, Senate Minority Leader Mitch McConnell, R-Ky., added in December.

    House Minority Leader Kevin McCarthy, R-Calif., Sen. Susan Collins, R-Maine, and key Democratic swing vote Sen. Joe Manchin, W.Va., among others on the Hill, have recently echoed these sentiments. Here’s the problem: They are simply wrong about the success of TANF. It is a program distinguished by failure.

    Last year marked the 25th anniversary of the Clinton-era welfare reform law that created TANF, which inspired me and my colleagues at ProPublica to investigate the current state of cash assistance in this country. Our reporting found that the requirements of TANF, which McConnell, Manchin and the others praised, are more often just plain cruel.

    In New Mexico and many other states, for instance, low-income single mothers applying for TANF are forced, in a relic of colonial “bastardy” laws, to first identify the father of their child (and his eye color, license plate number and parents’ addresses), and also to recall under penalty of perjury the exact date when they got pregnant, before they can get a small amount of cash assistance for things like rent, child care and diapers. Many are also made to submit their children to genetic testing.

    When a state has all of this information, it can then go after the dads for child support — much of which the government pockets. (ProPublica found that in 2020, nationally, more than $1.7 billion in child support from fathers meant to go to their kids was instead diverted into government coffers, as part of TANF’s design.)

    Some states go even further out of their way to avoid spending TANF dollars to help struggling moms, dads and kids. In Arizona, only 6% of families below the poverty line are able to obtain assistance from the program, partly because the state uses more than $150 million a year of its TANF funding to instead pay for child welfare investigations of many of the very same poor parents, as well as the foster care costs of removing their children from them. (More than 60% of Black children in Maricopa County — metro Phoenix — will see their parents investigated by the time they turn 18, according to a recent academic study.)

    And across the nation, $5.2 billion in TANF funding that is supposed to be helping provide direct assistance to low-income families is instead sitting entirely unused in states’ bank accounts, with the amount actually increasing during the pandemic even as need soared.

    The sheer difficulty of accessing these dollars often leaves applicants casting about for other options. In Utah, for example, so few families seeking TANF are approved or eligible for the aid that many parents I’ve spoken to in my reporting say they feel they have to seek help from the LDS Church instead. There, they are sometimes pressured to get baptized, work for the church or read aloud from the Book of Mormon in order to receive assistance.

    But if spending less on helping those in need is actually the point of welfare law, then opponents of the child tax credit in Congress are right to say that TANF works well enough already.

    In fact, spending less on parents and children was built into the original structure of TANF. The program’s funding was frozen in 1996 — and has not been increased since to account for inflation or population shifts. That means less and less is available per poor family with every passing year, especially in the rapidly diversifying desert Southwest where I live.

    Take Nevada, which since the ’90s has changed demographically more than any other state, due both to immigration and to an influx of tech companies and other young newcomers. Between 1997 and 2015, as the state’s increasing population caused its cost of living to skyrocket, the number of kids living in poverty there more than doubled, from 67,852 to 143,407. The result: Nevada now gets the smallest population-adjusted amount of TANF funding in the nation, at only $63 a year per child. By comparison, neighboring California receives $409.

    This is the program that America’s families will be left with if Congress does not pass the child tax credit this year.

    Ruby Duncan, who led marches of poor working mothers down the Las Vegas Strip and into its casinos at the height of the city’s Rat Pack glory days, a half-century ago, and who remains a leading advocate for families in the Southwest, put it best. TANF “is not a caring program,” she said. “It’s too late for it to be caring.”

    The post Welfare Is No Substitute for a Child Tax Credit appeared first on Basic Income Today.

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  • 89% of Surveyed Parents Believe It’s Important That Monthly Child Tax Credit Payments Are Restored

    New Survey Reveals Rising Family Poverty and Child Hunger As Second Month without the Expanded Child Tax Credit Approaches

    Original Post: https://parentstogetheraction.org/2022/02/10/new-survey-reveals-rising-family-poverty-and-child-hunger-as-second-month-without-the-expanded-child-tax-credit-approaches/

    According to a new survey from ParentsTogether Action, a family advocacy nonprofit with more than 3 million members nationwide, as the date of the second missed monthly Child Tax Credit payment approaches, parents and caregivers expressed widespread concern about their finances and conveyed real desperation for the payments to continue. 

    The survey laid bare the devastating consequences that ending the payments have had, especially on mid to lower income American families. When respondents were asked about their family’s finances in the two months since the payments stopped: 

    • 57% of respondents said it has been more difficult to meet their family’s basic needs
    • 22% said they have been unable to meet their family’s basic needs

    When broken down further:

    • 41% of respondents said they had to/will need to spend their savings or other money saved for emergencies
    • 34% said they can no longer afford extracurricular activities for their kids (sports, music, etc.)
    • 29% said they can no longer save for their children’s future
    • 22% said they can no longer afford enough food for their kids 
    • 19% said they can no longer afford their rent/mortgage 
    • And 15% said they had to cut back on work hours because they couldn’t afford childcare

    The survey made clear that parents were reliant on these payments: a large majority (75%) said the payments made a “huge difference” for their family. 87% of respondents said they used all of their CTC payments, indicating the urgency in which parents are operating as the pandemic continues to ravage the nation. 77% of respondents said the monthly CTC payments made them less anxious about their finances, and 89% of respondents said it was “somewhat” or “extremely” important for the payments to start up again.

    80% of survey respondents had household incomes of less than $100,000; 74% of respondents had incomes of less than $75,000. 

    “Thanks to opposition from Senator Joe Manchin and all 50 Republicans, the Senate failed to pass the Build Back Better Act in December, effectively abandoning millions of American parents relying on the expanded Child Tax Credit to survive as the pandemic raged. Parents have used this money to pay for the basic necessities: food, housing, and childcare,” said Justin Rubenn, co-Director of ParentsTogether Action. 

    “Now, as the second missed payment approaches, millions of families are on the brink. Ending these lifesaving payments drove up childhood hunger and family poverty, hurting children across the country in a time of great need. American families need the Senate to extend monthly Child Checks now, before more kids suffer.”

    ParentsTogether Action’s survey was conducted from February 4-9, as the second missed monthly payment approached. The last monthly Child Tax Credit (CTC) payment was on December 15, 2021, after the Senate failed to pass the Build Back Better Act passed by the House in November.

    In their own words, parents expressed the importance of the monthly payments:

    “Child checks took the fear of my children experiencing food insecurity away. I was able to provide nutritious food for them throughout the month bc of the child checks. It meant everything to our family.”  Karese, NC

    “As a young mother, I just need some extra help. I work full time and even extra hours to make ends meet. I am only making enough to survive. We are living paycheck to paycheck and just extremely grateful for the help I did receive.” Dana, NV 

    “[Child checks] make a huge difference for struggling families, which helps children twice because if they don’t have to worry about basic needs, they can focus on school and emotional development.” Kate, MN

    “Child checks have had such a positive impact on our lives! My daughter has hemiplegic CP and does horseback riding therapy that is not covered by insurance. We make just over any set limits for help or reduced fees… it allowed my daughter to gain invaluable help, which we now have anxiety worrying about how we are going to pay for this going forward. We have used those funds for our car payment as well, allowing us to not have to worry about paying for our car so we can drive to work or pay for other necessities and other medical services for our daughter.” Michael, IA

    “The check offered stability, where we didn’t have to choose between a roof & utilities vs having food & transportation too. Even still, we didn’t have breathing space, luxuries, or niceties. Now, without it, we’re back to sacrificing one need to maintain another.”  Jenny, WI

    “Financial security appears to be a thing of the past. These checks have helped our family with expenses that we normally cover with income obtained between 2 people. With random school closings, recurring sickness brought home due to unavailability of child vaccination and lack of child care availability, our household income has been majorly impacted.” Christina, OK

    The post 89% of Surveyed Parents Believe It’s Important That Monthly Child Tax Credit Payments Are Restored appeared first on Basic Income Today.

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  • How Jack Dorsey and GoodDollar both envision a universal basic income based on cryptocurrency

    Although the efforts by Jack Dorsey focus on Bitcoin and more traditional options, the GoodDollar initiative has potential.

    By:  Chris Smith.

    Original Post: https://knowtechie.com/how-jack-dorsey-and-gooddollar-both-envision-a-universal-basic-income-based-on-cryptocurrency/

    The concept of a universal basic income (UBI) remains more relevant today than ever before.

    A universal basic income would do good to millions of people, yet building the necessary infrastructure to roll it out remains tough to come by.

    Jack Dorsey aims to push the pace on this narrative, and the DeFi industry may offer a helping hand. 

    The Universal Basic Income Concept

    The idea to create a universal basic income, or UBI, is rather intriguing. It would give all citizens of a population recurring legally stipulated and equal financial grants, paid for by the government.

    Whether implemented nationally, regionally, or locally, the end goal remains the same. A UBI would help people of low income achieve basic needs when they would otherwise be unable to do so. 

    Historically, there have been various attempts at creating a universal basic income. From the Roman Empire to early 20th century efforts, there is no shortage of ideas and proposals to make this a reality.

    Unfortunately, it has never come to fruition on a large and long-term scale. Modern technologies and the support from business people like Elon Musk, Andrew Yang, and Jack Dorsey might help tip the scales. 

    Jack Dorsey Contributes Over $55 Million

    Speaking of Jack Dorsey, the Twitter co-founder is keen on exploring UBI opportunities. More specifically, his idea is to create a universal basic income backed by Bitcoin.

    Using the world’s leading cryptocurrency would make sense due to its transparent nature, code, and policy. Moreover, Dorsey is convinced fiat currency remains inefficient, whereas Bitcoin can facilitate more use cases. 

    For now, Dorsey’s initiative focuses on a closed-loop community of sellers and merchants who use Bitcoin. Eventually, the goal is to introduce the Bitcoin standard on a much broader scale.

    Dorsey expects the action of owning Bitcoin to change people’s mindsets and positively impacts their communities to explore this option in the future. 

    To date, Dorsey has invested over $55 million into various universal basic income initiatives across the US and overseas. Most efforts do not involve using Bitcoin or other cryptocurrencies, though.

    However, some initiatives in the decentralized finance space can bring crypto-based UBI to millions of people in the coming years.  

    The GoodDollar Concept

    DeFi protocol GoodDollar is focused on delivering a sustainable crypto UBI claimable by anyone. The project has almost 300,000 members worldwide and recently underwent a crucial protocol upgrade. 

    The universal basic income through the GoodDollar protocol provides a UBI in G$ token, governed by the GoodDAO.

    Additionally, the protocol leverages liquidity mining rewards and yield farming to ensure capital keeps flowing toward GoodDollar to create a sustainable project. Members can stake in Compound or Aave to earn rewards and help fund the crypto UBI for all. 

    After acquiring the G$ token, holders can sell the asset in the GoodDollar Reserve. All minted G$ are used to reward stakers or distributed as universal basic income on the Fuse blockchain.

    An initial test by eToro – they staked $58,000 – confirmed the money flow, demand, and end-user wallet application were viable.

    Moreover, the recent v2 upgrade ensures liquidity supporters receive G$ rewards for staking, awards GOOD governance tokens, and introduces a Social APY. 

    Conclusion

    Although the efforts by Jack Dorsey focus on Bitcoin and more traditional options, the GoodDollar initiative has potential.

    There are multiple ways to tackle the concept of a UBI and how to distribute it to larger communities best. 

    Moreover, the role of cryptocurrencies in universal basic income discussions will only become more outspoken. Fiat currencies are necessary, but one can always convert from crypto to fiat when needed.

    Saving some crypto by not converting the total amount right away will illustrate why this new form of money is so powerful. 

    The post How Jack Dorsey and GoodDollar both envision a universal basic income based on cryptocurrency appeared first on Basic Income Today.

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  • Chile could include universal basic income in its new constitution

    The Fundamental Rights commission of the Constitutional Convention of Chile proposed 2 different articles to guarantee a basic income. There is reason to be hopeful.

    By: Gabriela Cabana.

    Original Post: https://basicincome.org/news/2022/02/constitutional-convention-in-chile-has-two-proposals-of-basic-income-in-debate/

    During January the Fundamental Rights commission of the Constitutional Convention of Chile proposed two different articles to guarantee a basic income. Following an increasing support and visibility of this proposal, the Chilean Basic Income Network collaborated with 11 members of the convention and proposed a basic income as a way of fulfilling the right to a vital minimum (mínimo vital) through a basic income. The articles proposed to be incorporated in the new constitution are:

    “Article XXX (to be defined): Of the right to a vital minimum and to the universal basic income.

    The State recognizes the human right to a vital minimum.

    The State must provide each inhabitant of the Republic with a monetary transfer that is periodic, individual, unconditional and non-seizable.

    To ensure this minimum, a sufficient amount of resources must be allocated within the Budget Law for the preservation of social services and benefits.

    The law that regulates the organisation and implementation of the basic income will guarantee that, in the case of people in contexts of dependency, the administration of their income is in charge, totally or partially, of their caregivers.

    Transitory Article XXX (to be defined): The government will submit a bill for the implementation of the right to a vital minimum and universal basic income within the first two years counted from the entry in force of this constitution”

    The second set of articles to guarantee a basic income refers to a right to a guaranteed basic income and it has the following description:

    “Permanent article.- Every person permanently residing in Chile will have the right to receive a basic income in money, which guarantees the basic necessities of existence. This income will be monthly, unconditional, individual, unattachable and independent of any other income. The law will determine its amount and provide the way for its transfer to be automatic, without any request or justification. The loss of basic income may not be applied as a sanction.

    Transitory article.- The basic income will replace any subsidy with similar purposes and will be implemented in accordance with the progressiveness established by law. The President of the Republic, during the first year of his mandate, must account to the National Congress for the measures that he will adopt for the progression of the effectiveness of this right”.

    The next step in this process is the discussion of these initial proposals in the wider assembly. To be approved, an article must gather ⅔ of votes from the 155 convention representatives.

    The post Chile could include universal basic income in its new constitution appeared first on Basic Income Today.

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  • Should pregnant women get a child tax credit before their baby is born?

    Republican senators and representatives, including Utah’s Mitt Romney and Mike Lee, have signed on to ‘The Child Tax Credit for Pregnant Moms Act of 2022’

    By: Lois M. Collins

    Original post: https://www.deseret.com/2022/2/1/22911345/should-pregnant-women-get-a-child-tax-credit-before-their-baby-is-born-romney-lee-daines-pregnancy

    If a group of Republican lawmakers gets their way, pregnant women will be able to claim the child tax credit for children who haven’t yet been born.

    The effort, led by Sen. Steve Daines, R-Mont., and several of his colleagues, aims to help expectant parents with the cost of carrying a baby and preparing for expenses related to birth and raising a child.

    “Expecting parents begin providing and preparing for their child the minute they learn they’re having a baby — the child tax credit should reflect the fact that unborn children are children too. From prenatal care to stocking up on baby supplies, this tax relief will help parents prepare for the arrival of their baby,” said Daines in a news release Monday.

    The Child Tax Credit for Pregnant Moms Act adds onto the existing child tax credit. It would allow a taxpayer to claim the credit in the year before the birth if a social security number has been issued at tax time or to claim the credit for “the taxable year in which such child is miscarried or stillborn.”

    The latter situation requires an identification number from a certificate of miscarriage or stillbirth to be provided. If the pregnancy was intentionally terminated, it would not qualify for the tax credit. There’s a carve-out for pregnancy that imperils the mother’s life, like ectopic pregnancy, as long as an effort is made to save both mother and child.

    The bill includes a provision that would allow some families to receive a double credit if their child was conceived and born in the same year. The theory is that pregnancy timing could give a woman two credits if the child is conceived in one year and born in another, so providing two credits in the same year when the entire pregnancy takes place in that year makes the benefit equal.

    Daines has twice before submitted this bill, which previously failed to gain traction. Lots of Republican co-sponsors have signed on, including Ben Sasse, R-Neb.; Mitt Romney, R-Utah; Mike Lee, R-Utah, Tim Scott, R-S.C.; Cindy Hyde-Smith, R-Mass.; Josh Hawley, R-Mo.; and Marco Rubio, R-Fla.

    Reps. Jason Smith, R-Mo., and Doug Lamborn, R-Colo., are sponsoring the House version of the bill.

    In a slew of press releases, the co-sponsors hailed the proposal as a way to help families with not just the costs of raising a child, but also the costs of getting ready for a child’s arrival.

    “With one of the highest birth rates in the country, my home state of Utah has a lot of families who know that financial pressures don’t wait for a new baby to arrive,” Romney said in his written statement. “I’m proud to support this effort to allow pregnant moms to claim the Child Tax Credit for their unborn children, which will help alleviate some of the costs for families through pregnancy and in the first months of their child’s life.”

    Who will it help?

    The bill’s proposed changes would apply to the child tax credit that was on the books before the COVID-19 pandemic, not the temporary, expanded version that helped families and was partially delivered monthly as part of pandemic relief. The relief version was bigger and it was also refundable, which meant that very low-income people who didn’t earn enough income to qualify for the credit could claim it by filing a tax form. That expansion ended Dec. 31.

    Daines’ bill would require households claiming the pregnancy benefit to have the existing credit’s level of earned income.

    Some experts told the Deseret News that unless such a credit is refundable, it will leave out the neediest families. But they are happy to see at least some could be helped with the cost of preparing for and raising children.

    “Research shows how important the earliest years of life are for children, including in utero. This recognizes the importance of supporting children during that time. It also helps with a timing issue. The child tax credit comes at tax time, so many families who have a new baby might not receive it for many months after the birth. This allows them to receive the child tax credit in the pregnancy year,” said Angela Rachidi, a poverty scholar at the American Enterprise Institute.

    Medical care and prenatal health are expensive — especially for “the many who fall in the ‘hole’ of earning too much to qualify for Medicaid, but not enough to afford their medical bills,” said Arielle Kuperberg, associate professor of sociology and women’s, gender and sexuality studies at University of North Carolina Greensboro.

    She believes the credit would help some who really need it — including potentially women who don’t have paid parental leave and want to use the Family Medical Leave Act after the baby’s born but can’t otherwise afford that.

    “Also, pregnant women have costs in terms of additional food and vitamins needed, transportation to doctors’ offices and all the costs of preparing a household for a new baby,” Kuperberg said, noting there are also medical costs associated with miscarriage, stillbirth and if medical crisis requires a woman to terminate the pregnancy.

    Others say the bill isn’t really about helping struggling families; rather, the proposal is about curbing abortion.

    “Really this is a pro-life exercise. The goal is to codify in federal law that preborn children get the same tax treatment as born children. This makes it easier to claim that fetal life has rights similar to those accorded to born children. Look at how many of these statements put some kind of pro-life spin on the bill,” said Jennifer Glass of the University of Texas at Austin and executive director of the Council on Contemporary Families.

    She added, “I don’t think this is really designed to help families with children. Clearly the expenses of pregnancy are nowhere near the expenses of a newborn baby. Fetuses neither need car seats nor diapers, formula, breast pumps, cribs, well-baby checkups, etc. And pregnant women (but not mothers afterward) are already eligible for Medicaid and prenatal care.”

    Lee called the bill a “societal statement recognizing the value that children and parents bring to our country and parenthood begins long before birth.”

    “This bill will help protect life, support parents and reduce the number of children born into poverty,” he said.

    Help ripples out

    Research suggests that offering financial support to families who have infants and young children at home helps those children long term — and has benefits for society and the economy, too.

    A meta-analysis in the United Kingdom that looked primarily at U.S. studies found increasing income in poor households created children’s brain development that “appears roughly comparable with that of spending similar amounts on school or early education programmes. Increasing household income,” the researchers wrote, “could substantially reduce differences in schooling outcomes.”

    Time reported on a new study by Columbia University published in the Proceedings of the National Academy of Science that showed reducing poverty boosts brain development: “Brain measurements at age 1 showed faster activity in key brain regions in infants whose low-income families received $300-plus monthly for a year, compared with those who got $20 each month, U.S. researchers reported Monday.”

    “Researchers are still trying to determine why the money altered brain development. It could have purchased better food or health care; reduced damaging levels of parental stress; or allowed mothers to work less and spend more time with their infants,” The New York Times said of that study.

    Experts said once the children in the study are old enough for cognitive tests, the impact on brain development may be clearer.

    Rachidi, the American Enterprise Institute poverty scholar, had a different interpretation of the findings. She told The New York Times the brain development study showed infant bonding really matters. If the findings hold, “they could lend support for policies that help mothers spend more time with their newborns, including paid leave,” the article said. Rachidi said cash aid should be “targeted to those with low incomes, time-limited, and not erode work incentives in the long term.”

    Meanwhile, analysis for The Brookings Institution on the study quoted the Organisation for Economic Co-operation and Development policy report finding that the “United States has among the worst child poverty rates in the industrialized world. The data released this week and in the past month demonstrate conclusively that relatively minor investments in families and teachers can impact children’s growth trajectory. It is a small price to pay for a stronger future.”

    While she’s in favor of providing extra money to parents of infants and young children, Stephanie Coontz, director of research and public education for the Council on Contemporary Families and a professor emerita at The Evergreen State College in Olympia, Washington, said she worries about tax credits.

    “Those often don’t get money to families who need help most and they also often don’t get things immediately to needy parents,” she said.

    But Coontz sees another benefit to the proposed bill that the sponsors are apt to find appealing.

    “When impoverished single mothers receive increases in income, they are far less likely to move in with male partners who are not the father of their children, reducing the incidence of relationships that tend to be especially unstable and often risky for the child,” she said.

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  • How Targeting Programs to Poor People Leaves Out Poor People

    Some centrist Democrats are pushing to make the expanded Child Tax Credit means-tested. In practice, that often means restricting benefits for the very people who need it most.

    By: JIM PUGH.

    Original Post: https://inthesetimes.com/article/targeted-universal-means-tested-child-tax-credit-biden-democrats

    Less than one year ago, the United States government enacted one of the most effective anti-poverty programs in modern history. The Child Tax Credit (CTC), originally established in 1997, was expanded through the American Rescue Plan to provide families with children substantially larger payments, delivered monthly, while making low-income families eligible for the full benefits. This expansion changed the face of child poverty in the United States, lifting over 4 million children above the poverty line—a decrease in poverty of more than 40% — and decreasing food insufficiency for families with children by an estimated 26%.

    Unfortunately, despite its transformative impact, the expansion of the CTC is now at risk of being lost.

    President Biden’s omnibus Build Back Better (BBB) legislation was intended to make the changes permanent, but blanket Republican opposition and concerns around cost from some centrist Democrats have now put the program into jeopardy. As negotiations continue around the policy, one proposal that’s reportedly gaining traction is to lower the eligibility income cap for the credit, making it available only to families earning less than $75,000. This would change the expanded CTC from a nearly universal program to one targeted to lower-income Americans.

    If your priority is to lift children out of poverty, this may seem like a very reasonable change. Poor families remain eligible for the credit, and the lower price tag makes current negotiations easier and may help keep the program off the chopping block in the future. However, there’s a risk that by making the expanded CTC a more means-tested program, fewer poor children will end up receiving the support.

    While targeting programs seems like an efficient way to allocate resources, these programs often struggle with lower ​“take-up rates” than those that are more universal. Take-up rate is the percentage of families eligible for a program that actually receive the benefit, and it is often far below 100% — Temporary Assistance for Needy Families (TANF), the United States’ main cash welfare program, had an estimated 2016 take-up rate of only 24.9%. In 2019, the UK think tank Development Pathways conducted an analysis of social programs around the world, looking both at how specifically targeted those programs were and at their respective take-up rates. The results were stark: for highly targeted programs, at most 56% and as low as 3% of the intended populations actually received the benefits. In contrast, more universal programs had a far higher take-up rate, exceeding 90% in some cases.

    To understand this discrepancy between targeted and universal programs, we need to consider the possible reasons why an eligible person might miss out on benefits. The person might not know about a program; they might know about a program but choose not to apply; or they might try to apply for a program but be unable to successfully enroll. All three of these reasons can make a difference in take-up when comparing targeted and universal programs.

    Universal programs tend to be better known than targeted ones; when everyone is eligible, the program is more likely to come up in conversations and to be covered more often in media reporting. A good example is the set of cash-based support programs enacted by the American Rescue Plan, which included stimulus checks for most Americans as well as programs to provide rental assistance and Emergency Broadband Benefit (EBB) for low-income people. Comparing the news coverage of these three programs in 2021 using Google Trends, stimulus checks had three times the coverage of rental assistance, and EBB wasn’t mentioned enough to be measured. If programs aren’t being discussed or covered by the media, people often won’t hear about them, or know to apply — as of October 2021, only one in five eligible Americans had enrolled in EBB.

    How the public perceives a benefits program may vary significantly depending on whether the program is more universal or more targeted to low-income people.

    More universal programs tend to be viewed as public entitlements, which are generally perceived in either a positive or neutral light, while targeted programs are often seen as welfare, which carries a heavy stigma.

    The racist myth of the welfare queen has long shaped Americans’ perception of welfare recipients, creating an impression that people enrolled in the programs are lazy or incapable, regardless of substantial evidence to the contrary. This stigma often acts as a disincentive for people to enroll, both due to fears about how others will view them and from having internalized the stigmatized view of the program. In a 2021 study by researchers at the University of California Berkeley, people at risk of eviction were significantly more likely to apply for emergency rental assistance if they first received a de-stigmatizing message about the program, showing that stigma was acting a barrier to enrollment.

    If people have heard about a program and want to enroll, they still need to successfully complete the application process. While applying can be a challenge for any government program, this is particularly true for programs targeted at low-income populations, which are susceptible to added administrative burden, which can make the process so difficult, demeaning and time consuming that applicants eventually give up trying. Low-income families are often the most strapped for time, trying to juggle multiple jobs and childcare, and the time tax imposed by these programs can effectively prevent them from completing the enrollment process.

    Together, these dynamics offer an explanation for the sharp discrepancy observed in take-up rates between universal and targeted programs — and show why lowering the income cap for the Child Tax Credit carries a risk of leaving out poor families. Even when the nearly-universal credit was offered last year, lack of awareness was an obstacle to getting low-income families to enroll, and the issue will become that much more acute if the program becomes more targeted.

    Political negotiations are challenging, and if it comes down to a question of lowering the income cap or ending the expanded CTC for good — which would plunge four million kids back into poverty — the choice is obvious. But if we want to help as many struggling families as possible, we should fight not just to renew the expanded Child Tax Credit, but to make it a more universal program.

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  • Opinion: The enhanced child tax credit was one of the best-designed anti-poverty policies in decades

    America’s Endangered Solution to Child Poverty

    By: Kathryn A. Edwards.

    Original post: https://www.bloomberg.com/opinion/articles/2022-02-08/expanded-child-tax-credit-was-a-crucial-innovation

    The expanded child tax credit lapsed in December as the cost of President Joe Biden’s spending plans became a sticking point in Congress. Yet amid the debate over whether its success in reducing poverty is worth its large price tag, many are missing a crucial feature: It was uniquely well-designed to address the increasingly precarious economic reality that millions of Americans experience.

    Government programs tend to put people in boxes: elderly, disabled, veteran, unemployed, single parent. The most problematic of these labels often overlaps the others: poor. Most programs are means-tested, based on reported income during application, to direct money to those we perceive as the neediest.

    But incomes in the U.S. can actually vary a lot from month to month: Swings as large as 50% are not uncommon.

    This affects people in high and low income strata, with potentially severe consequences for those without the savings to smooth out the peaks and valleys. Shift workers — in sectors such as retail or leisure and hospitality, which together account for 1 in 5 U.S. jobs — must contend with unpredictable schedules. On-demand contract workers such as rideshare drivers and Instacart shoppers face similar uncertainty. Few get paid time off for an emergency or illness. If they don’t or can’t work, the money stops coming.

    This income volatility means families are continually rising above and dipping below the federally defined poverty level. Researchers at the Census Bureau found that over four years, one-third of Americans were poor for at least two months, but less than 3% were poor the entire time. Half of all spells in poverty ended in less than a year, and the long-term poor never made up more than 10% of those in poverty. A separate study examining tax data found that more than 4 in 10 people spent at least one year in poverty between 2007 and 2018.

    Low incomes, volatile incomes and poverty risk all correlate with child poverty. For most children, the poorest their parents will ever be is on the day they are born. People have kids in their 20s and 30s, but workers’ earnings don’t peak until their 40s or later. The poverty rate for children under 4 is always higher than the poverty rate for children 5-17, simply because the poverty rate for adults aged 25-34 is always higher than the poverty rate for adults aged 35-44 or 45-54.

    For children, the consequences of volatility and poverty, even for intermittent periods, can be acute and lasting.

    For example, children’s test scores are lower in the days just before food stamp benefits arrive (when the household is most likely to be short on food), and children whose parents were laid off during their childhood earned less as adults.

    The question, then, is how best to inoculate toddlers from these effects. Income volatility makes for a rapidly shifting target. Anywhere from 30% to 40% of Americans could become poor, but aren’t poor this month. Similarly, many who are poor this month or this year won’t be poor in the next. Poverty and need can strike quickly.

    Social programs, by contrast, are sluggish. Just ask anyone who waited months for their unemployment claim to be processed in 2020, or widows trying to claim Social Security survivors benefits while the field offices have been closed. Indeed, applying for and maintaining public benefits is so onerous that it has become its own subject area of social science research, called “administrative burden.”

    Last year’s child tax credit expansion, an experiment that lasted from July through December, offered a pioneering solution: Pay part of the benefit monthly, in advance, to all parents. In effect, it was an acknowledgement that the government can’t get money to children in need as fast as the labor market creates them. The maximum monthly benefit was $300 per child, so the average paid out to families was close to $400 – not enough to live on, but just enough to insulate children from their parents’ income volatility.

    Reaching all children in poverty or at risk entails a tradeoff: A lot of money goes to families that aren’t in acute need. But in the case of the child tax credit, this was happening before the expansion, too. More than 98% of children in families with annual incomes ranging from $75,000 to $500,000 received the credit – an eligibility design that took on the costs of broad coverage without delivering the benefits that the expansion and monthly advance payments provided.

    All policies have tradeoffs. These can be measured in dollars, but also in efficacy. The expansion to the child tax credit was modern in that it recognized how volatile incomes can undermine the effectiveness of anti-poverty measures. The U.S. can retreat from a particular solution, but not from that problem.

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  • Rashida Tlaib and Mondaire Jones have introduced the End Child Poverty Act

    This week, Rashida Tlaib and Mondaire Jones introduced the End Child Poverty Act in Congress. It’s a watershed bill that would bring the US in line with social democratic countries that boast the world’s lowest child poverty rates.

    By: MATT BRUENIG.

    Original Post: https://jacobinmag.com/2022/02/epca-congress-eitc-child-tax-credit-welfare/

    On Thursday, Rashida Tlaib and Mondaire Jones introduced the End Child Poverty Act. The ECPA is by far the best child allowance proposal introduced in Congress and should serve as a blueprint for future Democratic efforts in this area of policy.

    Current law delivers basic cash benefits to American families through three main tax credits: the Earned Income Tax Credit, the Child Tax Credit, and the Credit for Other Dependents. These credits are extremely complicated, duplicative of one another, and not available to the poorest families in the country.

    The ECPA replaces this current tax credit mess with the following new programs:

    1. A universal monthly child allowance set equal to the difference between the one-person poverty line and the two-person poverty line, which is currently $393 per month. This benefit would be paid out by the Social Security Administration (SSA) using the same rules that the SSA currently uses to pay out Supplement Security Income (SSI) and Survivors benefits to children. Children would be enrolled in the program at birth at the same time that they apply for their Social Security number.
    2. An annual $600 fully refundable credit for adult dependents. This replaces the current nonrefundable $500 credit for adult dependents.
    3. An annual $600/$1,200 fully refundable credit for single/married tax filers that phases out at $20,000/$40,000 of income. This replaces the non-child aspects of the current EITC and ensures that no family is cut back from their current level of tax credit benefits.

    This policy would dramatically reduce child poverty in the United States. Relative to the current baseline, I estimate that child poverty would decline by two-thirds.

    More importantly, the child allowance contained in this bill fully eliminates what we might call the child component of poverty, meaning that, after its enactment, no family would ever find themselves below the official poverty line solely because they have children. They may be in poverty for some other reason, such as unemployment, which should be addressed through other policymaking. But they will never be in poverty because of their children.

    The universal design of the child allowance would make the program dramatically easier to administer.

    Because the SSA would not have to apply an income test, it would not need to gather any information from families other than what is necessary to send money to the relevant parent or guardian. It would not need to know the parent’s marital status, their income for the year, what tax filing status they will use, or other similar bits of information used in other programs.

    Once enrolled at birth, the child benefit would go out every month until a child’s nineteenth birthday. Families would only ever need to interact with the SSA to update their banking information or the custody status of their child. This is contrasted with means-tested tax credit programs that require families to file paperwork every year.

    This kind of program would bring the US child benefit system up to the level seen in countries like Denmark, Sweden, Norway, and Finland, which have the lowest child poverty rates in the world. This is a proven design with a proven track record of success, and the United States would be wise to bring the program to its residents.

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  • Opinion: The Corporate Attack on Our Democracy Is an Assault on the Working Class

    When wages are stagnating at the same time that big business is accumulating a staggering amount of wealth, it is an indictment of our democracy.

    By: ERICA SMILEY.

    Original Post: https://www.commondreams.org/views/2022/01/30/corporate-attack-our-democracy-assault-working-class

    The one-year anniversary of the attack on the Capitol has come and gone, and a lot has been said about the need to fight back against existential threats to our democracy. Not enough is being said, however, about what’s being fought for and won in workplaces across the country.

    “This historic rise in worker power wouldn’t be possible if not for programs that gave workers cash, and thus the breathing room needed to finally have a choice.”

    Make no mistake, that fight is about democracy too

    It’s no accident that workers across the country are choosing this moment to demand better. The global pandemic dramatically shifted people’s priorities—and who has leverage in a tight labor market. Tens of thousands of Americans across industries have demanded wage increases, more humane schedules, and an end to dangerous work. And they’re winning, because employers facing labor shortages are finding it harder to force people to accept poor working conditions and pay.

    Understanding how we got here is critical to building upon this progress.

    This historic rise in worker power wouldn’t be possible if not for programs that gave workers cash, and thus the breathing room needed to finally have a choice. Part of the federal government’s pandemic response has been a short-term strengthening of the social safety net. The American Rescue Plan provided $850 billion for stimulus checks, increased unemployment insurance, and an expanded Child Tax Credit that provided a guaranteed income floor for nearly every family with kids under 18.

    That government support saved lives, saved jobs, and kept millions of people out of poverty. But it also gave workers options in the wake of a national disaster that had left many re-evaluating their priorities. Having a little cushion empowered millions to demand higher wages, or simply leave for better-paying jobs.

    This “Great Resignation” is a welcome course correction after a decades-long trend toward increased corporate power. Since World War II, workers in other countries have used their leverage to force the government to provide a social safety net that included health care, retirement, and sick leave provisions. While American unions were forced to spend the intervening decades bargaining for those same rights, meaning they were intrinsically tied to having a job, unions in other countries were freed up to fight for everything from higher wages to better working conditions.

    Americans fell behind because the compromises made here were anchored in achieving labor peace instead of pursuing democracy. And those compromises go back further than the 1940s and 1950s.

    The grand project of building a healthy, multiracial democracy in America has been in the works for over 150 years. During Reconstruction, we ratified the 13th Amendment to the Constitution to abolish slavery and all forms of forced labor. We passed the 14th Amendment to guarantee citizenship to those born in the United States, and the 15th Amendment to give the right to vote to Black men. These are all monumental attempts to build a true democracy for America.

    Reconstruction was left incomplete, of course, stopped in its tracks by those who wanted to reclaim control for a select few—people who wanted to put Black, Indigenous, and immigrant communities back in our place, if not on a plantation then as exploitable wage laborers.

    “Workers across the country are putting their lives and their livelihoods on the line because they are serious about forcing change”

    Even the protections eventually won for wage labor often exempted roles traditionally filled by women and people of color, such as farm and domestic workers, and continue to exclude immigrants and people who are incarcerated or disabled. Meanwhile, corporations have established subcategories of work with limited rights, such as the modern-day gig worker, or the misclassified independent contractor.

    Democracy isn’t just a system of political practices. It must be applied to participation and decision-making in all aspects of our economic lives as well. When wages are stagnating at the same time that big business is accumulating a staggering amount of wealth, it is an indictment of our democracy.

    The last year has demonstrated the challenges and opportunities to change this status quo. Hourly wages have increased 5.1 percent over the last year—and that’s benefited many of the lowest-paid workers—but rising prices are outpacing those gains, and the pandemic is still surging.

    We’ve learned from the example of pandemic relief that a permanent, federal guaranteed income would provide security to the workers who need it most, and shift the power balance enough to help us win long-overdue structural change.

    And we can buttress that by finally compelling corporations to do their part by paying fair wages, recognizing unions, and contributing their fair share in taxes.

    Today, workers across the country are putting their lives and their livelihoods on the line because they are serious about forcing change. They’re out to prove this isn’t an isolated moment or an aberration in our history. Our task is to ensure that we seize this opportunity to unite against white supremacy and corporate control, so we can finally complete the 150-year project of building a thriving multiracial democracy.

    _________________________________

    ERICA SMILEY

    About the Author: Erica Smiley is the organizing director of Jobs With Justice, a national network of grassroots-based labor and community coalitions.

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  • Study shows that carbon dividends should be coupled with education

    Carbon dividends must be coupled with educational efforts to inform citizens about how much the carbon price is increasing their costs and that the carbon fee and dividend system is generating a net income for most households.

    By: By Dana Nuccitelli

    Original post: https://citizensclimatelobby.org/blog/policy/study-shows-that-carbon-cashback-must-be-coupled-with-education/

    A new study published in Nature Climate Change made some waves with its assertion that dividends do not increase the popularity of a carbon price. The reason — somewhat buried in the paper and associated stories from the Atlantic and  David Roberts’ Volts newsletter— is that citizens in countries with carbon fee and rebate systems tend to overestimate their carbon costs. The paper notes of carbon fee and dividend in Canada:

    “The policy is highly progressive, with 80% of households receiving more in dividends than they pay in carbon taxes … Canadians who learned the true value of their rebates were significantly more likely to perceive themselves as net losers even though most Canadians are net beneficiaries.”

    Study shows that carbon cashback must be coupled with education

    There’s an important lesson to be learned here — it’s not enough to provide carbon cashbacks that exceed the carbon fee costs. If you only take one thing away from this study, make it this: dividends must be coupled with educational efforts to inform citizens about how much the carbon price is increasing their costs and that the carbon fee and dividend system is generating a net income for most households. We can show people the size of their dividends on checks, but individuals’ carbon fee costs are much tougher to add up, and this study indicates people may tend to overestimate them.

    With that key takeaway highlighted, let’s dig deeper into this paper.

    What did the study do?

    The paper looked at the two countries that have carbon fee and rebate systems in place today. Canada is the most relevant example, with a carbon price whose revenue is currently rebated via an income tax credit. Switzerland returns its carbon tax revenue through a discount on health insurance premiums.

    These are rather opaque ways to provide dividends to households. (Canada will begin mailing dividend checks to households this July, and the study authors will then gather more data.) Unsurprisingly then, the study found that citizens are poorly informed about the rebates. Specifically, 25% of residents in Saskatchewan and 45% in Ontario did not even know they had received a rebate, and on average individuals underestimated the size of their dividends by 40% and 32%, respectively. Only 12% of Swiss respondents knew that carbon tax revenues were redistributed to the public at all.

    The study authors took advantage of this lack of information to conduct an experiment. They performed a survey in which half of participants were informed about the size of their carbon rebates. Survey participants in this experimental group answered much more accurately when asked about the size of their rebates. Education works!

    Study shows that carbon cashback must be coupled with education

    But the experiment did not include any information about the participants’ increased carbon costs, and as noted above, most Canadians incorrectly believed that the rebates were insufficient to cover those costs. As a result, receiving information about the size of the rebate actually decreased support for the fee and dividend system among members of the Canadian Conservative Party due to an overestimation of their carbon costs.

    In Switzerland, where the carbon fee revenue was distributed in the form of reduced health insurance premiums, the rebate information slightly increased citizens’ already strong support for the country’s carbon fee. However, it did not significantly increase support for raising the carbon price — a proposition that was narrowly defeated in a national referendum last summer. Switzerland’s current carbon price ($105 per ton, rising to about $130 this year) is nevertheless already one of the highest in the world.

    Carbon fee and dividend is already popular

    Another key take-home point from this study is that while the dividend information did not increase support for carbon pricing in Canada or have very much effect on support in Switzerland, the policy is already broadly popular.

    The study survey found that Swiss support for their existing carbon price averaged about a 3 out of a 4-point scale. Canadians are evenly split in their support and opposition to the country’s carbon fee and dividend, but Justin Trudeau has remained Prime Minister in the two elections held since the carbon fee was enacted, including a recent election held after his government announced that the carbon price will rise to $170 per ton by 2030.

    Perhaps most tellingly, the Canadian Conservative Party now includes a smaller carbon fee and dividend plan in its own platform. They view opposing the policy as a losing political position, and Conservative voters have a net positive view (+17%) of their party’s new carbon fee and dividend platform.

    In surveys of American voters, close to 70% support a revenue-neutral carbon price, including nearly half of Republicans. Simply put, carbon fee and dividend is already a pretty popular policy. But public support isn’t the only requirement for a policy to become law. For example, the vast majority of Americans across the political spectrum have long supported universal gun background checks, and yet no such law has been passed. Policy popularity is important, but it isn’t the only thing that matters.

    Carbon cashbacks are smart policy

    Increasing the popularity of a carbon price isn’t the only (or even the most important) reason why dividends are good policy. If we make polluters pay for their carbon pollution, they will pass those costs along to consumers, and low-income households spend the largest proportion of their income on energy costs. Without dividends, carbon pricing tackles the climate crisis on the backs of low-income Americans. CCL does not consider that an acceptable approach.

    On the other hand, as the Household Impact Study illustrated, sending carbon cashbacks equally to taxpayers generates a net income for nearly all low-income households because they have relatively small carbon footprints. 

    Study shows that carbon cashback must be coupled with education
    Percent of American households receiving a net income (dark green) or minor net loss (light green) by income quintile from the poorest 20% to the wealthiest 20% of households, from the 2020 Household Impact Study. 98% of lowest-income households come out ahead from carbon fee and dividend.

    A Nov. 2021 study in Nature Climate Change also estimated that a $50 per ton carbon fee and dividend would lift 1.6 million Americans out of poverty. 

    And a new study in the Proceedings of the National Academy of Sciences found that monthly dividends provided to low-income families changed children’s experiences and increased their brain activity, which “has been associated with the development of subsequent cognitive skills.” 

    In other words, carbon cashbacks can alleviate poverty and give children in low-income households a better chance to succeed in life while simultaneously helping to preserve a stable climate for their future. It’s just good policy.

    Partisanship is a problem. CCL is working on it

    Most of the coverage of the new study has focused on political partisanship because carbon fee and dividend support remained lower among conservatives even when survey participants were educated about their rebates. But partisanship colors support all climate policies. Some folks believed the Clean Electricity Performance Program (CEPP) would be more politically palatable than carbon fee and dividend, but the former was nixed last October while the latter still remains in the mix of possible policies with at least 49 Senate votes supporting its inclusion in Build Back Better more than three months later. 

    As the CCL communications team said, “It seems that partisanship is a big factor in whether people like the policy or not. That’s part of why CCL works in a bipartisan way to build support all across the political spectrum.” We’re also working hard to educate the public about the benefits of climate policies like carbon fee and dividend. As noted above, education works; another new study found that a brief exposure to pertinent facts increased Irish support for their country’s carbon price.

    In short, carbon fee and dividend remains one of the single most effective climate policies, and CCL will continue to work on educational efforts with people of all political persuasions to carry it and other smart climate policies across the finish line.

    ________________________________

    About the Author:

    Dana Nuccitelli is an environmental scientist and climate journalist with a Master’s Degree in physics. He has written about climate change since 2010 for Skeptical Science, for The Guardian from 2013 to 2018, and since 2018 for Yale Climate Connections. In 2015 he published the book “Climatology versus Pseudoscience”, and he has also authored ten peer-reviewed climate studies, including a 2013 paper that found a 97% consensus among peer-reviewed climate science research that humans are the primary cause of global warming.

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  • Public support for a universal basic income is dependent on the way it is funded

    The concept of a universal basic income has received increased attention since the start of the Covid-19 pandemic. But what do the public think about the proposal? Drawing on a new study, Leire Rincón illustrates that a key factor affecting support for a universal basic income is the way it is funded, with more people likely to back the policy if it is funded by increasing taxes for those on higher incomes.

    By: Leire Rincón.

    Original Post: https://blogs.lse.ac.uk/europpblog/2022/01/25/public-support-for-a-universal-basic-income-is-dependent-on-the-way-it-is-funded/

    Support for a universal basic income is one of the key political puzzles of our time. This once utopian idea, mainly advocated by philosophers and writers, is now an increasingly viable alternative with rising salience in political and public debates. Defined as a universal, unconditional, and individual cash payment made to all of the population with no strings attached, the concept stands in stark contrast to the orthodox approach to welfare which mainly relies on means-testing or conditional cash transfers.

    The puzzle

    The Covid-19 pandemic has prompted unprecedented interest in the potential benefits of a universal basic income, and there has been a notable rise in support for the policy.

    Yet, we know little about what determines support for the proposal. Previous studies have shown that support is higher in some countries than others, and that being unemployed, on a low income, young, and left-wing increases support.

    These studies, however, cannot fully unveil the dynamics behind support for the policy. What is it about a universal basic income that generates support or opposition? What feature is particularly appealing to individuals and what are the aspects that reduce support? Current work, which mostly relies on survey data, is not equipped to decipher this. Traditional survey questions typically ask respondents to give a rate of support for the overall definition of a universal basic income, hence, they bundle up a series of features and it is difficult to disentangle the rate of support.

    The approach

    To overcome this limitation, in a recent study I employ a conjoint experiment that allows for an assessment of the effect of different policy characteristics on support for a universal basic income. I design the experiment in such a way that I can account for support for a universal basic income as opposed to other policy alternatives on the table like child benefits, unemployment schemes, and minimum incomes. The experiment can also separate support for a universal basic income from support for similar proposals such as a negative income tax, a participation income, or a euro dividend among others.

    Theoretically, I propose a simple yet novel argument concerning the origins of opposition to a universal basic income. Because a universal basic income’s most characteristic features of universality and unconditionality present a radical departure point from the orthodox welfare rationale of giving to those in need or who are deemed deserving, it is likely that these are the features that generate the greatest resistance from the public. Additionally, I argue that this is especially the case if a universal basic income is funded by reducing current welfare expenditure.

    Key findings

    I find that this is only partly the case. Universality does reduce support for a universal basic income, but not unconditionally (see Figure 1). Individuals prefer targeting those in need rather than having a universal cash transfer for everyone. Nevertheless, when it comes to establishing behavioural conditions, respondents are much less sensitive to the kinds of conditions that are imposed. Other important features of a universal basic income, like the fact it is received on an individual basis, the level of its generosity, or the associated legal requirements, play only a minor role in securing support for the policy.

    Figure 1: Support for individual features of cash transfer systems

    Note: The figure shows ‘average marginal component effects’ (AMCE) of support for different features of cash transfer systems. These features are separated into categories with the last feature in each category acting as a baseline. The dots indicate whether average support for this feature is higher or lower than the baseline feature in each category and the extended lines show 95% confidence intervals. Findings are significant when the whole of the line is located either above or below the middle line (0.00). For instance, funding cash transfers through a personal income tax (PIT) on those with the highest incomes significantly increases support as the horizontal line is located entirely above 0.00 in the ‘funding’ category.  

    Crucially however, I find that funding mechanisms matter greatly to support for cash transfers in general and a universal basic income in particular. Support for cash transfers is significantly reduced when these transfers are funded by reducing existing welfare expenditures. This suggests that if a universal basic income or another form of cash transfer replaced existing welfare systems then it may struggle to gain the support of the public. Conversely, funding a cash transfer system by increasing personal income tax for those in the highest income thresholds is found to boost support more than any other feature. This suggests there is strong demand for a redistributive cash transfer system.

    Picking up on the finding that it is universality that undermines support, I move on to explore the conditions under which support for this feature may develop (see Figure 2). I find that essentially no design element has the potential to increase support for universality. Contrary to an intuitive expectation, attaching behavioural conditions to a universal cash transfer does not increase support for this feature. However, restricting eligibility criteria to citizens as opposed to residents does generate significantly more support for universality. Benefit generosity does not matter greatly, but I do find that low quantities are unpopular.

    Figure 2: Support for universality when combined with other features

    Note: The figure shows the ‘marginal means’ (an indication of average support for each feature) when features are combined with universality.

    The implication of this latter finding is that a proposal with symbolic quantities such as a euro dividend may struggle to win the backing of the public. One potential explanation for this is that the public are unlikely to see the merit in a cash transfer that includes everyone, including those who may not need it, and which is of such a small quantity that it would not allow those who actually need it to meet a level of subsistence.

    Finally, and most importantly, I find that how a universal cash transfer is funded greatly affects the support it may receive. Reducing existing universal welfare expenditure as part of a new cash transfer system compromises support, but increasing taxes for those on higher incomes is popular. Crucially, the latter funding mechanism is enough to make universality as popular as targeting benefits to those in need. The key finding of my study is therefore that there is potential public backing for a universal cash transfer that is funded by taxing those on higher incomes.

    However, this is not the end of the puzzle. Taxing the rich may be rooted in a demand for redistribution, but it could also be the case, as some previous research has indicated, that this finding reflects the perceived costs of social policies. Misperceptions on the position that one occupies in the income distribution are commonplace, and rarely do individuals self-identify as being ‘rich’. Hence, this demand for higher taxation may indicate a desire for redistribution but equally it could emerge from material self-interest.

    Future research should explore the mechanisms underpinning these preferences and identify the key supporter coalitions behind the different cash transfer proposals on the table. In the meantime, my study shows that policy design and the funding structure of cash transfers are a key factor in shaping public support.

    __________________________________________

    About the author

    Leire Rincón is a Post-Doctoral Researcher at the Chair of Political Sociology and Social Policy in the Department of Social Sciences at Humboldt University.

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  • Is opposition to basic income support for vulnerable adults informed by evidence or ideology?

    Ideology is a frequent discriminatory stumbling block that fuels opposition to basic income support for millions of South Africans

    By Alex van den Heever.

    Original post: https://www.dailymaverick.co.za/article/2022-01-30-is-opposition-to-basic-income-support-for-vulnerable-adults-informed-by-evidence-or-ideology/#Echobox=1643571804

    The recent ‘leaking’ of a President’s Economic Advisory Council note arguing against basic income support for millions of South Africans raises many questions about whether this is really a debate about technical constraints or one that is ideological — with technical considerations largely irrelevant.

    For over two decades, pretty much the same thinking has dominated economic policy in South Africa — with what appears to be a perpetuation of poor economic and social outcomes.

    The question is whether these poor outcomes are an accident of fate, or just the result of the repeated application of the same kinds of thinking.

    In this respect, it is worth noting that if the Republicans in the US were to impose their dystopic vision on any society from scratch, it would pretty much look like South Africa today.

    It would be characterised by structural poverty and deep social divides arising from market failures in the distribution of income and its close relative, the social distribution of risk.

    Only the well-off would have any form of social security and the rest, well, that’s not the problem of government or the privileged.

    So, why is the distribution of risk so important to incomes?

    There are many events that can disrupt the flow of incomes to families.

    These include the death, disability or illness of a breadwinner as well as normal activities such as giving birth and looking after an infant child or losing employment due to old age.

    In addition, the loss of employment due to the structure of the economy and economic cycles imposes severe costs and hardships on individual households outside of their control.

    The operative phrase here is “outside of their control”.

    While the occurrence and duration of these various events cannot be predicted at the individual level, they are, however, predictable at a societal level. This is quite simply why social security systems pool these risks.

    Not only will most of these events occur at some point in any household’s lifetime, but they will happen to some households somewhere at all points in time.

    However, the effects of these events are not evenly distributed.

    Not unexpectedly, the more precarious a household’s social condition, the more catastrophic the impact of such an event, with the effects harming the lives and life paths of households.

    The converse is equally true: the less precarious a household’s social condition, the greater its ability to mitigate the effects of such an event alone.

    Think of a game of “snakes and ladders”, where for most of the population there are many more snakes than ladders. For the privileged few, in contrast, there are few or no snakes and just ladders.

    In such a game, “winning” and “losing” outcomes are structured into the game and have little to do with effort levels, competence or even chance.

    In any society that individualises the bearing of such income-harming events, socially predictable risks are implicitly transferred onto the households that have no real ability to manage them on their own.

    Only a very small percentage of households will be able to manage such risks on their own — roughly equivalent to half of the highest-earning 10% of households.

    The systemic outcome of individualising the distribution of risk in this way is to cement in disadvantage, which then “mysteriously” manifests as endemic poverty and inequality.

    Social protection regimes redistribute the snakes and ladders, expanding access to ladders and reducing the impact of snakes.

    To conventional economists, the social implications of these risk distributions are invisible — and therefore, to them, do not exist.

    There was a time when surgeons also did not recognise the importance of washing their hands prior to surgery.

    Why? Because the existence of “germs” was just a theory, as no one could see them.

    It took the invention and use of the microscope to convince surgeons they were killing their patients.

    This mindset is age-old and reflects the path dependency of entrenched practices and thinking where emergent evidence will not be considered until such time as it becomes overwhelming and obvious to pretty much everyone.

    The recent note by the President’s Economic Advisory Council (PEAC) on the extension of basic income to income-compromised adults closely resembles this failure on the part of surgeons.

    As with bad waiters, there are “none so blind as those who do not wish to see”.

    Conventional economists, in fact, have no technical expertise or models to understand the social and economic transmission mechanisms associated with social income-pooling schemes.

    They are therefore not in any position to comment with authority or evidence on the social and economic effects of any social security arrangement, whether in reference to a system of basic income or social insurance.

    Conventional macroeconomic models, used for relatively basic projections or limited policy assessments, also over-aggregate the key features of any economy (and society), and cannot be used for anything other than the crudest of appraisals.

    So, what such economists, using such models, cannot see, effectively “doesn’t exist”.

    When it comes to the resulting policy analysis, the evidence gaps are invariably filled by selecting assumptions that reflect the prejudices of the economists involved and drive all the results. Alternatively, they just cut out the middleman and run with assumptions.

    If we leap back in time to reflect on the utilitarian economists of the 19th century, it illustrates in fairly stark terms how evidence-free theorising in economics persists to this day.

    For instance, there was a UK Royal Commission that in 1834 examined and reported on the workings of the “poor laws” which governed income relief (social assistance) paid by local authorities to those without adequate incomes.

    A particular target of the commission was the so-called “Speenhandland system”, which supplemented the income of poor households based on the price of bread (a food poverty line of sorts) and family size.

    These measures had been introduced via the “poor laws” system to address the fact that even earned incomes were insufficient to support poor families.

    The Royal Commission, however, determined that the system of relief for the poor had the following outcomes:

    • “paupers claimed relief regardless of their merits”;
    • “large families received the most relief, therefore improvident marriages were encouraged and this led to larger families”;
    • “women were able to claim relief for their illegitimate children, so the system encouraged immorality”;
    • “labourers had no incentive to work hard and be thrifty when worthless idlers got more relief than could be earned by honest hard work”;
    • “employers kept wages deliberately low”;
    • “paupers had no respect for an employer when they knew that their wages would be supplemented by the parish”; and
    • “men were discouraged from providing for their families and aged parents because they could ‘be put on the rates’”.

    These outcomes were not informed by evidence and instead reflected views that “the existing ‘poor law’ undermined the prosperity of the country because it interfered with the ‘natural’ laws of supply and demand”.

    The commission worked from the premise that poverty was inevitable (“the poor are always with you”) and that only the “deserving poor” merited support.

    If you were able-bodied, you were by definition “undeserving”.

    The commission consequently recommended a “poor laws” regime that expressly punished the able-bodied poor through a draconian workhouse system.

    This, they assumed, would create an incentive for the poor to sort themselves out.

    The idea that being poor was the outcome of structure rather than conduct was beyond the limited worldview of the utilitarian Benthamites of the period.

    But how different are these views from those that inform government policy in South Africa today?

    Importantly, how much evidence is used to inform such views?

    It is worth noting that this 1834 position was comprehensively thrown out with the post-World War 2 European consensus on social protection, where redistributive schemes were systematically and comprehensively introduced to eliminate poverty and inequality.

    After all, how could you ask the (majority) poor to fight for you against Hitler and Stalin when your society offered them nothing but hardship and suffering?

    It was plainly understood that if you treat people like dirt, they may, and probably will, treat you the same at some point.

    Were a Sweden or a France to eliminate their redistributive schemes now, their levels of poverty and inequality would gravitate towards South Africa’s outcomes.

    Stable societies require that resources are reasonably pooled at the societal level using good institutions to transfer the burden of social risks faced by everyone, from individual households to society as a whole.

    In simple terms: you restructure the distribution of snakes and ladders to provide the maximum opportunity for advancement to all.

    To a large extent, the PEAC rejects this view and instead reflects the conventional wisdom espoused by the Royal Commission, arguing that social support for the “able-bodied” will allegedly undermine employment and fiscal sustainability:

    “Significantly increased social grant spending would likely weaken the position of poor South Africans as it would erode public services and infrastructure, slow down employment creation and result in a crisis for public finances that would take years to resolve.”

    This mirrors Commissioner Nassau Senior’s argument (from the Royal Commission) that “the great test which must be applied to any project of state action in regard to relief [social assistance] is the question whether it has any tendency to increase that which it is proposed to diminish”.

    The commission’s argument is simple: if you provide income support to able-bodied people, they will have no incentive to work.

    And economists, “as everyone knows”, are the “pre-eminent experts on incentives”, at least in their own minds.

    But if the fear of starvation worked as an incentive to generate economic growth, South Africa would be the fastest-growing economy in the world.

    However, very little has changed with respect to both poverty and inequality from 1994, and there are no policies proposed — outside of income support for those in income poverty — that are any different to what has been proposed before.  

    Along these lines, the PEAC effectively adopts an ideological posture, arguing that “inclusive economic growth must be built on employment creation. Our vision must be to promote employment rather than ever-increasing state-funded income support. For those of working-age, grant support should be temporary with clear pathways to employment… We face a real danger of policy error at a macroeconomic level where we will limit our economy’s growth and job creation potential by increasing the system of social grant payments in an unsustainable manner that would weaken economic [sic] and undermine the country’s capacity to address poverty and unemployment” (p. 14).

    According to this thesis, labour markets are primarily responsible for the distribution of income, and growth expands labour markets.

    Along the same lines as the Royal Commission, therefore, income support to the able-bodied undermines the integrity of the labour market and therefore growth.

    It is worth noting that this proposition isn’t really arguing that income support for working-age adults is not feasible. It is in fact arguing that it should not be done at all. Ever.

    With this reading, and consistent with those of the Royal Commission, even if funds were available, this policy should not be pursued.

    Invoking macroeconomic arguments and fiscal constraints, therefore, comes across as mere window-dressing for ideological opposition to such an income-support programme.

    That is, when poor households are concerned.

    For consistency, such a position would require a re-assessment of all programmes funded through the fiscus that involve income support provided to working-age adults in South Africa.

    It may surprise many to find out that we have many such programmes, and they are not cheap.

    They have the following features in common: they subsidise the top 10% of income earners; they largely fly under the radar as they are provided through the tax system; and they have no associated macroeconomic or other appraisals to support their social and economic outcomes.

    The estimates in 2018 values are (Annexure B – Tax Expenditure Statement):

    • Tax subsidies for retirement provision, which include deductions against contributions and the elimination of the 18% withholding tax on retirement fund assets in 2003:

    o   Subsidies on contributions: R87-billion

    o   Subsidies related to the return on investments of retirement fund assets:   R46-billion (own estimate — also see Social Budget bulletin 2)

    o   Total = R133 billion

    • Tax-free savings accounts: R3.4-billion
    • Employment tax incentive: R4.5-billion
    • Participation exemption, which exempts foreign dividends from income tax if a South African resident holds at least 10% of the total equity shares and voting rights in a foreign company declaring a foreign dividend: R11-billion

    In total, these subsidies amount to an annual set of permanent obligations on the fiscus for working-age adults quantified in 2018 values at around R146-billion.

    In contrast, the potential maximum recurrent value of the Covid-19 social relief of distress (SRD) grant in 2021 prices (not 2018 values) is around R56-billion with a maximum, but unlikely, ceiling value of around R76-billion at maturity.

    The PEAC proposal for the Covid-19 SRD grant is, however, R0.

    The irony should not escape anyone that, according to the PEAC, it is fiscally and macroeconomically irresponsible to provide income support to the millions of income-compromised adults of working age in South Africa, while government presently funds working-age adults in the top decile to the tune of R146-billion per annum (in 2018 values).

    In the game of snakes and ladders, the PEAC clearly has no concerns about more ladders for the privileged and more snakes for the poor.

    This is important because it raises clear questions about the authenticity of the PEAC’s admonitions about fiscal and macroeconomy responsibility.

    Importantly, therefore, there is ample scope for a restructuring of the fiscal snakes and ladders to achieve a more effective social outcome with available resources.

    Not exercising this discretion to support income-vulnerable households is therefore quite evidently a policy choice and not an imposition conditioned by an unfortunate set of time-bound economic circumstances.

    Let no one be fooled.

    Professor Alex van den Heever is chair in the field of Social Security Systems Administration and Management Studies at Wits School of Governance and chairperson of the Expert Panel on Basic Income Support.

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  • A BIG deal: Universal basic income could resuscitate South Africa’s economy — report

    Basic income support also helps boost investment aimed at improving nutrition, healthcare, housing and transport, the report adds.

    By: Sarah Smit

    Original Post: https://mg.co.za/business/2022-01-28-a-big-deal-universal-income-support-could-resuscitate-south-africas-economy-report/

    Despite its heavy price tag, a basic income grant (BIG) should be viewed as a means of addressing South Africa’s triple challenges: poverty, unemployment and inequality.

    This is according to a report commissioned by the National Economic Development and Labour Council, which found a basic income grant could add 0.5% to GDP growth by 2025 by improving household demand and boosting employment.

    The release of the report comes off the back of growing calls to implement a basic income grant, especially as South Africa’s unemployment crisis continues to deepen. In the third quarter of 2021, the unemployment rate rose to 34.9% — the highest recorded level since 2008.

    Finance Minister Enoch Godongwana is expected to make a call on whether a basic income grant is feasible when he delivers his maiden budget speech next month.

    The report, which considers the fiscal feasibility of providing income support to individuals between the ages of 18 and 59, concedes that the cost of implementing the grant is significant. 

    Based on the treasury’s base scenario for economic growth, the cost of extending the R350 social relief of distress grant to 2025 ranges from 2.8% to 2.9% of nominal GDP. This increases to 9.7% to 10.4% of nominal GDP over the projection period if a universal basic income grant is introduced at the upper-bound poverty line, which at the time the report was written was R1 268.

    But, according to the report, this high cost may very well be worthwhile. “Implementing a BIG has the potential to make significant inroads into improved income equality in South Africa and possible economic gains through the multiplier effect,” the report reads.

    The R350 grant, the report notes, has the potential to reduce the concentration of income of the top 10% to 49.9% in 2019/2020 on an income per capita basis to just below 47.1% by 2024/2025. The share of household income per capita as a percentage of the total in the lowest income decile is projected to increase from 0.8% in 2019/2020 to 7.0% by 2024/2025. 

    On top of addressing inequalities at the household level, the basic income grant “could impact macro-level economic growth directly, through increasing household productivity and employment, stimulating aggregate demand, affecting labour force participation and influencing savings and taxation”, the report notes.

    Basic income support also helps boost investment aimed at improving nutrition, healthcare, housing and transport, the report adds.

    The report weighs up whether a basic income grant could be funded by hiking personal income tax. The R350 grant, the report found, would result in an approximate average increase in effective tax rates of 8.2%. A universal BIG at the upper-bound poverty line

    would result in an approximate average increase in effective tax rates of 30%.

    The government has been cautioned against increasing the personal income tax, which would further burden South Africa’s small tax base. But, the report notes, “there are strong moral arguments given South Africa’s history and high-income inequality” for expanding personal income tax to fund a basic income grant.

    Given the significance of the cost attached to a universal basic income grant, the report suggests looking into whether a wealth tax should be implemented. 

    But a wealth tax may only be practically implemented over the medium term, the report notes. This means that personal income tax, corporate income tax and VAT remain the alternatives over the short-term if the implementation of a basic income grant takes place within the short term.

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  • Opinion: Basic income for people with disabilities would be a step forward for the whole UBI movement

    Real headway is being made in securing a basic income for people with disabilities in Canada – and that’s good for the whole basic income movement.

    By: Roderick Benns

    Original Post: https://basicincomecanada.org/a-basic-income-for-people-with-disabilities-is-a-step-forward-for-the-whole-movement-rabia-khedr/

    Disability Without Poverty’s national director, Rabia Khedr, says real headway is being made in securing a basic income for people with disabilities in Canada – and that’s good for the whole basic income movement.

    “I support all people having a livable income,” Khedr said. As people with disabilities, we believe everyone has the right to have their basic needs met, regardless of their ability to work. We should be supporting society’s members with their basic needs so they’re not struggling.”

    A basic Income is a guarantee that no Canadian will have to live on an income far below the poverty line, as is currently the case for thousands. This is not meant to be a substitute for needed public services, but rather a federal government cash transfer made directly to individuals. It would serve to replace provincial income assistance programs like Ontario Works and serve to augment the incomes of those who work but not enough to stay out of poverty.

    Khedr says basic income though is most clearly on the table for people with disabilities at the moment, given the most recent throne speech committed to the creation of a new Canadian Disability Benefit for people with disabilities.

    The national director says her organization came about specifically as a result of the pandemic, which pushed people with disabilities “further into the margins.”

    This was obvious, she says, in the way the government reacted with benefits once the pandemic took hold.

    “Working age, able-bodied people? No questions asked – they got $2,000 a month. It speaks to our values,” says Khedr.

    “People with disabilities didn’t make the cut because many hadn’t worked consistently enough.”

    A smaller, one-time benefit of $600 came later in the pandemic, almost as an afterthought, she noted.

    However, Khedr feels optimistic about the road ahead for a basic income for people with disabilities, given the consultation process has been well underway and the government finally seems committed.

    “If we make headway with this, we’re setting a precedent for a livable income for all. Something great is definitely going to happen.”

    She points out that about 89 per cent of Canadians in a recent Angus Reid poll supported a livable income for people living with a disability, showing there is great public support.

    At this time, Khedr’s organization is trying to speed up the process, so that instead of three years of consultations – which the federal government proposed — it would get narrowed down more quickly. This could especially happen, she says, if more people with disabilities were involved in the benefit’s design.

    Last year, about 26 op-eds were published in media outlets in support of a basic income for people with disabilities, and after the last election there was an open letter supporting the movement signed by 200 prominent Canadians. Recently, a parliamentary e-petition was circulated by the new federal Green Party MP Mike Morrice, closing with nearly 18,000 signatures.

    Khedr points out that StatsCan reports that 22 per cent of Canadians have a disability of some kind. “That would be progress, to have nearly a quarter of Canadians’ needs looked after” in the form of a livable income.

    “One step forward is a step forward for more.”

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  • Opinion: COVID-19 Proved That Universal Basic Income Is Necessary

    This pandemic is not the last crisis that the U.S. labor market is going to face. UBI offers protection for the American people when crisis strikes again.

    By: KC Ellen Cushman.

    Original Post: https://dailyutahchronicle.com/2022/01/27/cushman-covid-19-universal-basic-income-ubi/

    During the 2020 primary election, Andrew Yang had a unique plan to deal with the economic challenges facing America: Universal Basic Income (UBI). Yang’s UBI plan would give $1,000 each month to every American over 18 years old. Many Americans are skeptical of, if not downright opposed to UBI. I was in that camp, too, until the pandemic. COVID-19 changed my opinion on UBI — and it should change yours, too.

    When Yang proposed UBI, I, like many Americans, immediately brushed off the idea. I had never heard of a welfare program that gave payouts to everyone, regardless of need. I’ve always been a supporter of social welfare programs like universal healthcare, more paid leave for parents and aid for people experiencing poverty. But UBI doesn’t work in the same way as those programs. However, COVID-19 revealed a huge weakness in America’s social safety nets and stimulus checks showed the potential that UBI has to fix it.

    Crisis Doesn’t End With the Pandemic

    The pandemic kept many people out of work for our nation’s safety and lockdown financially devastated many households. By April 2020, 32% of upper-income Americans said they or someone in their household had lost their job or taken a pay cut, and that number increased to 52% among low-income Americans. Paying bills, let alone saving money, was difficult for many. As a young person who hasn’t established a career yet, I was especially vulnerable. When lockdown started, my catering job disappeared with no notice, forcing me to work a job with a much lower wage as I moved into my first apartment. For the next year, I struggled to keep up with my bills.

    The pandemic made the rich richer, and the poor poorer, as low-income Americans were much more likely to lose work and struggle to pay their bills during the lockdown.

    In response to this financial devastation, the government stepped in, giving Americans stimulus checks. For me and many others, those checks were a financial lifeline as the pandemic made the labor market unpredictable. However, labor around the world will continue to change drastically, just like it did during the pandemic, as automation and climate change will cause millions of jobs to disappear.

    While the estimate on how many jobs will be lost to automation by 2030 varies from 20 to 45 million, one thing is certain — automation will force people out of jobs. As many as a quarter of U.S. jobs are vulnerable to being lost to automation. Like the COVID-19 unemployment crisis, automation is set to affect low-income workers the hardest, as they are more likely to perform menial labor. UBI, like stimulus checks, would be a financial lifeline to people affected by automation, allowing them to pay their bills as they search for other employment.

    Similarly, as we transition towards renewable energy, thousands of jobs in the fossil fuel industry will be lost, a trend we’ve already started to see. Those workers may not have the resources to easily find a job that can pay their bills in the same way. UBI can act as a cushion for these workers that oftentimes have spent decades in the fossil fuel industry. Also, as destructive weather events continue to get worse, UBI will help families stay afloat if they have been displaced by extreme weather.

    Stimulus Checks Are Proof

    One criticism of UBI is that it de-incentivizes work, ultimately harming the economy and employment. But, research on UBI has shown that any decreases in employment are offset by higher spending, which creates a greater demand for workers. Stimulus checks, which function similarly to UBI on a small scale, prove that UBI is feasible in the United States. Not only did stimulus checks significantly reduce food insecurity and financial instability, but, among poorer Americans, almost half of the stimulus money was reintroduced to the economy within only ten days.

    This shows that UBI effectively reduces financial stress and gives poor Americans more money that cycles back into our economy.

    A UBI would make it easier for Americans to get a college education to improve their work options. And, it consistently gives people more spending money to support American businesses and labor.

    This pandemic is not the last crisis that the U.S. labor market is going to face. UBI offers protection for the American people when crisis strikes again. Additionally, it will allow poorer Americans the ability to engage with the economy more, making a better economy for all Americans. I understand why the idea can seem absurd or outlandish, but it is a viable solution to the weaknesses of our current social safety nets and it is a policy we should pursue.

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  • Opinion: It’s Time for a Guaranteed Basic Income in Washington State

    Participants in the proposed program would receive monthly payments for up to three years equal to the cost of rent for a 2-bedroom apartment unit wherever they call home.

    By Shaun Scott and Rep. Liz Berry 

    Original post here: https://www.thestranger.com/slog/2022/01/27/65560161/its-time-for-a-guaranteed-basic-income-in-washington-state

    We believe everyone deserves the essentials: A roof over their head, a stocked pantry, and a doctor they don’t have to be afraid to visit when they get sick. But far too many Washington families are living in or on the brink of poverty.

    A new survey of 10,000 grocery workers in the Western United States showed that 78% of them struggled to afford basic needs like shelter, food and child care. Washingtonians deserve a government that works as hard as they do. When it comes to solving the problem of poverty in our state, the answer is simple: Give people cash.

    Basic Income isn’t a radical idea. In 1971, Seattle was selected by the federal government to participate in “Income Maintenance Experiments” that lasted over a decade. Under the program, 4,800 low-income Seattle households were given the inflation-adjusted equivalent of $23,000-$34,000 per year.

    And not that long ago, the federal government gave nearly everyone $2,000 in the first nine months of the pandemic, no strings attached, to help stave off the negative economic impacts of COVID-19, lifting nearly 12 million people momentarily out of poverty in the process. That was a form of Guaranteed Basic Income (GBI)—a promising approach that local governments have been reprising in the last few years to great success.

    After two years of $500 monthly checks, Stockton, California residents increased full-time employment by double digits, lowering overall stress and improving well-being. In Jackson, Mississippi, Black mothers received $1,000 per month for a year, more than tripling their ability to pay bills, and allowing nearly half of them to save for emergencies for the first time.

    The recent successes led to a nationwide campaign, “Mayors For A Guaranteed Income,” where mayors across the country advocated for GBI—including here in Washington, where Tacoma families just began receiving $500 monthly payments of their own under the leadership of Mayor Victoria Woodards. A study released recently showed that when poor mothers were provided cash stipends for the first year of their children’s lives, their children recorded brain activity associated with stronger cognitive development.

    With basic incomes, more people are able to afford food and housing, pay off debt, get full-time jobs, save for emergencies, and get the physical and mental health support they need. Cash payments dramatically improve the lives of our neighbors and communities. That’s a source of hope. Unfortunately, the very need for GBI also reveals just how many of us are close to losing everything; even people working multiple jobs that offer little security for workers.

    That’s why we’re fighting this legislative session to pass a Guaranteed Basic Income in Washington State. The Legislature is considering a bill that would institute the Evergreen Basic Income Trust, a GBI program that provides regular, unrestricted cash payments to recipients who meet certain criteria. We’re championing this bill because we trust our neighbors to take care of themselves and each other. This program offers the freedom and dignity of self-determination, allowing participants to decide for themselves how to best provide care for their loved ones and families.

    Participants will receive monthly payments for up to three years equal to the cost of rent for a 2-bedroom apartment unit wherever they call home. That’s about $1,050 in Yakima County, $1,126 in Wenatchee, and $1,940 in Snohomish and King Counties. Not only will the program finally allow families to meet their essential needs, it will also go a long way toward closing the wage gap in communities of color throughout our state.

    Government decides how our economy is structured – not the “invisible hand” of the market. For too long, those at the top have benefited from rules that have been rigged in their favor. And our upside-down tax code — the worst in the nation — has only made things worse. We have an opportunity to flip things in favor of families and everyday Washingtonians by putting money in the pockets of ordinary people. We can fund this important work to end poverty and positively impact the lives of millions of Washingtonians by ensuring those with the most pay their share.

    Now is the time for Washington to fund measures that keep households afloat during tumultuous times. And we can do it with the Evergreen Basic Income Trust. As advocates and organizers, we must fight for Washington’s families. They deserve all the support we can provide right now, so tell your legislators to support House Bill 2009. Show up to testify and sign on in support at the upcoming hearing on Feb. 1 at 8 a.m. before the Housing, Human Services and Veterans House Committee. Let’s get economic relief for the people who need it most through the finish line this legislative session.

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    About the Authors:

    Shaun Scott is the Policy and Field Campaign Manager for the Statewide Poverty Action Network. He is the author of the forthcoming book, Heartbreak City: Sports and the Progressive Movement in Urban America (2023, UW Press).

    Liz Berry is a Democratic state representative serving the 36th Legislative District, which includes South Lake Union, Belltown, Queen Anne, Magnolia, Ballard and Greenwood.

    The post Opinion: It’s Time for a Guaranteed Basic Income in Washington State appeared first on Basic Income Today.

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