Original post can be read here: https://www.london.gov.uk//press-releases/assembly/zack-polanski/londoners-back-policies-for-universal-basic-income
More than twice as many Londoners back a universal basic income as a way to build financial security after the pandemic than oppose it, according to new data from YouGov commissioned by Green London Assembly member, Zack Polanski.[1]
Fifty per cent of Londoners say they support a universal basic income (a policy that makes sure everyone has an income, without a means test or requirement to work) with just 22 per cent opposed.
For rent controls, which Londoners have previously supported by a large majority in other polls,[2] support reaches more than two thirds, at 67 per cent, with just 11 per cent opposed.
Zack Polanski AM will today propose that the Mayor of London supports a trial of a basic income in a budget-related motion he will propose in the London Assembly.[3]
He says:
“Introducing a national basic income needs a change of policy from Government, but we can act now to show the value of this idea in London and the benefits to people on low or precarious incomes. “The Assembly already backed the idea of trialling a basic income within London in 2020.[4] It is time for the Mayor to step up and help fund the community-led trials that are being proposed. Greens have been pushing for rent controls and a basic income for several years and, while the current Mayor has now committed to pushing for devolved powers to control rents, the Government has so far not listened. We are asking him now to work more urgently, with Mayors from other cities, to allow cities to control rents and help Londoners whose wellbeing is seriously harmed by sky-high housing costs.”
These new data suggest that a plurality of Londoners now recognise that world events may put anyone’s income at risk, and are willing to support a simplified social security system that would ensure everyone has a basic income, regardless of circumstances.
Both measures saw a plurality of support across all age groups. For a basic income, the highest level of support was seen among Londoners aged 25-49, while rent controls saw the highest support in the 50-64 age group.
Notes:
1. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1,166 adults in London (18+). Fieldwork was undertaken between 13th – 17th January 2022. The survey was carried out online. The figures have been weighted and are representative of all London adults (aged 18+).
2. Zack Polanski AM will propose the following motion to the Assembly at the Plenary Meeting on the Mayor’s draft consolidated budget on Wed 26 January:
“This Assembly calls on the Mayor to explore the benefits of a universal basic income for Londoners, by creating a fund to support community-led trials as part of his final draft consolidated budget for 2022-23.”
Webcast of the meeting begins at 10am. Motions will be debated after a short lunch break at around 1pm.
By covering part of the cost of daycare, Child Tax Credit checks have allowed many mothers to continue pursuing a career despite the Great Resignation.
For the first time in six months, I did not receive the expanded Child Tax Credit payment on the 15th of the month. I depended on that money to afford my son’s daycare costs. Now, I’m in a state of limbo.
After a devastating pandemic, many families like mine are trying to get back on their feet, and the Child Tax Credit helped us do just that. Without those payments, I’m giving serious thought to leaving my job to take care of my child full time.
In Georgia, where I live, an overwhelming majority of parents spent the money on essentials like food, housing, and child care. I recently became a mother, and I now know just how many unexpected costs are thrown your way when you have children. The CTC has lifted millions of kids out of poverty and allowed millions of additional middle-class workers like myself to have a bit of breathing room.
When my husband and I decided to start a family, our lives were completely different. We were both working full-time jobs and running a thriving photography business on the side. Things were going well, and we felt financially secure.
By the time I’d given birth to my son in June of 2020, everything had changed. Not only was a deadly virus ravaging the country, but our financial situation had taken a turn for the worse. Our small business was hit hard when in-person photography events were first postponed, then canceled indefinitely.
When my maternity leave ended, I faced the dilemma many mothers know all too well: I needed childcare to work but I didn’t earn enough to justify the high cost of daycare. I wasn’t ready to leave the workforce, but I felt my hand was forced. Then we started receiving the monthly Child Tax Credit payments.
It was a relief to receive the money in monthly payments, instead of having to wait for our tax refund the following year. The $300 checks went straight to our childcare costs. Even though the money covered less than half of our monthly daycare bill, it was enough to allow me to keep working.
Getting the money when we needed it most was life-changing. Our “pandemic baby” was able to remain in daycare, and my husband and I were happy to see him picking up social skills that we’d worried would be delayed as a result of isolation during the outbreak.
Last month, Sen. Joe Manchin blocked the extension of the CTC into 2022. He has argued that parents would misuse the money or cease working. That couldn’t be further from the truth. In fact, a quarter of respondents to a national survey reported that the CTC made it easier for them to work, or allowed them to work more hours.
After the news that the CTC would probably end, I felt dejected. My husband and I both had student loan payments that were about to resume and without the monthly money from the CTC, there would be no way we could afford my son’s daycare bill. It’s been a saving grace that the federal government has extended the pause on student loan repayments, even though that relief will likely end soon.
My husband and I are doing all we can to make it work by picking up odd jobs here and there. We work every day hoping that it will be enough to make it by. I’m dreading the day when my son’s daycare begins to eat up too much of our budget. I’ll have no choice but to leave my job to take care of him full-time.
It’s important to me to pursue a career and to be more than just a mother. I don’t want to lose my sense of self. Now it seems inevitable that I too will join the Great Resignation that has seen so many workers leave their jobs over the past year.
Anyone raising kids now knows that a few hundred dollars a month doesn’t cover a fraction of the costs, especially with rising prices. But for many parents, these payments allowed us to participate in the workforce. There will be a lot more of us leaving our jobs if nothing is done to help working families like mine.
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Pasha Benjamin lives in Conyers, Georgia with her husband and their 18-month-old son. She wrote this piece in partnership with the Center for American Progress Action Fund, which advocates for progressive policies.
One of the most significant impacts of the spread of the omicron variant of the coronavirus is upon us, as a wave of Democrat-controlled school systems has begun announcing a return to indefinite remote learning.
Meanwhile, Democrats are proving incapable of responding to the pandemic in real time, and the child tax credit — the only thing keeping some families afloat — has expired. This one-two punch poses a serious financial challenge for working parents in a time of rising inflation.
With the child tax credit, Republicans have the opportunity to step in and save the day for parents in a year that could decide the legislative majority on Capitol Hill.
So far, the omicron variant has caused the most classroom interruptions in school systems across the country since August, when school reopenings were complicated by the emergence of the delta variant. Given the dramatically higher rate of transmission of the omicron variant, it’s unlikely the classroom disruptions will subside any time soon.
With the final monthly child tax credit payment sent to parents last month, many families will have limited options for managing a return to remote learning.
Since Democrats have failed to pass their partisan version of the benefit as part of a reckless spending bill, Republicans have an opportunity to take up the mantle and provide meaningful changes to the policy in a singular CTC renewal that will benefit the economic well-being of working-class families across the country.
According to a study conducted by Humanity Forward and the Social Policy Institute at Washington University in St. Louis, nearly 30 percent of parents spend some of their monthly checks on child care. The coverage for this expense is likely why one in four parents is actually working more hours thanks to the CTC, according to a recent survey.
According to the Humanity Forward study, less than 6 percent of respondents planned to work less, the majority of whom are parents with infants who will be able to seek longer-term, more gainful employment.
The benefits of the monthly, fully refundable child tax credit are abundantly clear. In six months, it has lifted 3.8 million children from poverty, enabled many parents to return to work, fostered entrepreneurship and cut food insecurity by nearly a quarter.
If the moral imperative of reducing child poverty alone is not a compelling enough reason to continue this policy, the economics surrounding it do the rest of the talking — all while empowering parents, not government.
Despite the demonstrated success of the child tax credit, working mothers are still lagging in terms of workforce participation after the initial job losses of the pandemic.
The Department of Labor estimates that 1.8 million mothers dropped out of the workforce as a result of the coronavirus. If working mothers must navigate a patchwork of inconsistent local and government obstructions amid a new COVID-19 surge without the financial support of the child tax credit, many of the gains they’ve made in the past six months will be lost.
I understand the trepidation from Republicans who are hesitant to step into an intraparty fight amongst Democrats that seemingly can only help them. But we’d be forgoing a long-term opportunity for our party for ill-gotten short-term gains. We’d be ignoring parents’ pleas today for their votes in November.
We’ve got to act now.
More players in Washington appear to be involved now in the future of the child tax credit, as Republican Sens. Mitt Romney of Utah and Susan Collins of Maine have both expressed a willingness to reach across the aisle and come to an agreement with their Democratic colleagues. More may soon follow.
This is good news, as it represents another pathway for parents to continue receiving help from one of the few successful government initiatives since the start of the pandemic.
To kill off this policy without considering the omicron variant and the immediate effects it will have on American families in the coming months would be a mistake and would undermine ongoing gains Republicans are making with the working class and suburban women.
For Republicans in Congress, this represents yet another chance to prove they are the party of solutions.
One mystery of the labor shortage is the missing paycheck: How long can people choosing not to work last without an income?
Nobody’s sure, but clues are emerging. The economy continues to recover from the COVID wipeout, and hiring remains strong. Yet Americans are beginning to report more difficulty paying routine bills, not less, and it’s probably related to the end of federal relief measures that kept millions above water during the last 20 months.
In the Census Bureau’s “household pulse” survey last May, 46.7% of respondents said they had no difficulty paying usual household expenses. By December, that had fallen to 39.9%. During the same time period, the portion saying it’s a little, somewhat or very difficult to pay those bills rose from 45.9% to 49.9%. (The remaining 10% or so did not answer the question.)
Since the economy has been steadily improving, the deterioration in household finances isn’t due to worsening unemployment or falling incomes. But the last stimulus payments went out in the first half of 2021, and emergency federal jobless benefits ended in September. With inflation at 6.8%, buying power is also eroding at the same time aid is drying up.
“There are people who are running out of money,” says Philippa Dunne of TLR Analytics. “It’s getting harder for them to pay their bills. The expiration of expanded unemployment insurance benefits and stimulus payments have taken a toll on household finances.”
There seem to be plenty of jobs for people who need to work. Employers report 10.6 million job openings, nearly the most ever. Unfilled jobs hit unprecedented levels in 2021, as COVID-related anomalies wrought havoc with the labor force. Some parents who want to work must now deal with unpredictable school schedules and an acute shortage of affordable child care. Several million potential workers may still be too concerned about catching COVID on the job to return. Federal aid money has given millions more a financial cushion that could delay a return to work or let them hold out for a better job longer than they may have been able to get before. A record-high quit rate—the portion of workers choosing to leave their jobs—suggests workers have newfound leverage, and they’re using it.
If jobs are there for the taking, people starting to feel a financial pinch should have no trouble nabbing a paycheck or finding new work that pays more or offers better flexibility. But the door to work might not be as wide open as aggregate data suggests. Job-seekers say companies seem to post some listings just to see if they can lure a dream candidate, who never materializes, leaving those jobs open indefinitely. Not all employers are boosting pay and benefits. Some parents can’t find any job offering enough flexibility to let them care for kids or sick family members.
Financial strains could get worse. Another important element of federal relief—an expanded child tax credit—expired in December and it’s not clear Congress will renew it.
The baseline child tax credit remains in place, but the expansion was worth hundreds or thousands of dollars extra to qualifying families. It also allowed those families to claim half the credit in advance, through a monthly bank-account direct deposit or check in the mailbox. The December Census survey showed 39% of child tax credit recipients—nearly 20 million households—spent the money, most likely on necessities. Thirty-eight percent said they used the money to pay down debt and just 26% said they saved it.
One surprise of the COVID pandemic was a broad improvement in household finances, when many economists expected soaring unemployment to make things much worse. Roughly $6 trillion in relief programs passed by Congress gets much of the credit. Consumers also became frenetic savers, since it was hard to spend money when businesses shut down or it felt unsafe to go out. The saving rate rocketed from 8.3% before the pandemic to a high of 33.8% in April 2020. It stayed elevated for the next 15 months, providing a financial cushion as businesses struggled to get back to normal.
That cushion is evaporating. The saving rate in November fell to 6.9%, and Census data shows that more people are now using credit cards to pay for routine expenses. A saving supercycle has now yielded to “dissaving,” when people spend down their surplus and start to borrow more.
None of this means the economy is in particular trouble in 2022, since growth remains solid and robust hiring should resume once the Omicron COVID variant begins to retreat. But tougher economic times for at least some Americans will shape political decisions in 2022 and probably impact the upcoming midterm elections.
There are murmurs in Washington about another round of aid for business and perhaps some consumers still struggling. If it happens, it won’t be nearly as big as last year’s $2 trillion package, but it would reignite disputes between liberal politicians who think Washington should do much more and conservatives who think it has already gone way too far.
Also lingering is President Biden’s “build back better” legislation, which Democrats are revamping in the hope it can pass by the end of February. One of the biggest issues is whether to reauthorize the expanded child tax credit for another year or longer, or revert permanently back to the baseline credit. That bill could also include child care assistance and other measures that might help sidelined workers get back in the action. The question for 2022 is how much help they actually need.
People are being told they will have their benefits cut if they don’t attend job agency appointments, as government resists calls to pause ‘mutual obligation’
A woman with chronic illnesses and an immunocompromised partner and the single mother of a toddler are among those being told they’ll have their benefits cut if they don’t attend face-to-face job agency appointments, despite an unprecedented surge of Covid cases.
Welfare mutual obligations, which have been suspended in Covid-affected areas for much of the pandemic, were reintroduced nationally in late October. Last week the government rebuffed calls to pause them, despite soaring infection numbers.
Guardian Australia has confirmed that while some job agencies are allowing people subject to mutual obligations to meet their requirements from home – by conducting meetings by phone or online, for example – others are insisting participants attend in person.
A participant in the disability employment services program, who did not wish to be named, said her provider warned her that she must attend a group job coaching meeting scheduled for next week.
The 23-year-old, who lives in Adelaide, said she lived with chronic illnesses but was most worried about infecting her loved ones.
“My partner has an autoimmune disorder and is on immunosuppressant medication,” she said. “I’m not really comfortable going out and potentially exposing myself and him.
“He works at the airport but he has decided to take unpaid leave because of the risk.”
Jobseekers face having their payments suspended if they fail or refuse to attend a scheduled appointment with their employment services provider.
For much of the pandemic, the government paused mutual obligations – which meant jobseekers could either continue receiving services online, or stop taking part in meetings. During the period, welfare payment suspensions for “non-compliance” were not applied.
This time, the government has rebuffed calls to return to those measures, instead setting lockdowns – which have been all but ruled out by state leaders – as the marker to dictate when mutual obligations might be stopped again.
Lauren Colvin, 38, is another welfare recipient who is being required to attend face-to-face appointments.
“I have to take my toddler [to the face-to-face meeting],” Colvin said. “We’ve been basically isolated. It’s really scary.”
Colvin, who lives near Newcastle, said she was told by Centrelink she would need to attend a face-to-face appointment on Monday with a ParentsNext provider. The program is supposed to be aimed at getting those on parenting payments on to a path towards employment.
But Colvin, who is a qualified primary school teacher, is already in the middle of a career shift, having completed a bachelor’s degree last year. She starts a master’s of psychology this year.
Colvin believes she is not eligible for ParentsNext because she is already studying, a claim backed by guidelines published online, but Centrelink has insisted she must go to the meeting.
“He just kept repeating the same line, ‘We are not currently under lockdown, therefore you must fulfil your obligations,’” Colvin said. “That was what he just kept reverting back to.
“I tried to contact the complaints line, but just haven’t been able to get through.”
Another participant in the jobactive employment program, who is based in Melbourne, asked for his next meeting to be over the phone rather than in person but was refused.
He said he was told “it’s the government’s rules and I have to do it or my payment will be cut”.
“Given this is an office with a bunch of random people going in and out all day, it’s scaring me a lot,” he said.
Cassandra Goldie, the chief executive of the Australian Council of Social Service, said mutual obligations should be suspended.
“We should not be forcing people to attend unnecessary, risky face-to-face activities, like group job-searching or appointments with jobservice providers, under threat of being cut off from their life-sustaining income support,” she said.
Kristin O’Connell, of the Antipoverty Centre, said the government should suspend mutual obligations in a “return to the strategies that kept us safe in 2020”.
“Moving activities online doesn’t go far enough – payment suspensions must be removed immediately,” O’Connell said. “We are desperately searching for Covid tests, trying to meet our basic needs in the face of shortages, and do all this on poverty payments. People need the time and space to focus on keeping themselves safe, and caring for loved ones, and recovering if they fall sick.”
A Department of Employment spokesperson said providers were required to “ensure face-to-face service delivery is safe, permitted by the relevant jurisdiction’s health orders, appropriate to the participant and staff, is reasonable in the circumstances and beneficial to the participant”.
“If a participant feels that they have a valid reason for not attending face-to-face services, such as a health or Covid-19 related issue, they should advise their provider before their appointment or activity,” the spokesperson said.
“Providers are required to find the participant an alternative and suitable service if the participant has a valid reason.
“Additionally, anyone who is sick, whether that be related to Covid or any other illness, is directed to isolate or is caring for someone who is isolating, can seek an exemption to their mutual obligation requirements.”
A spokesperson for the Department of Social Services, which runs the Disability Employment Services program, said participants were “only required to attend face-to-face appointments where it is safe to do so”.
“Participants concerned about face-to-face appointments affecting their health or that of an immediate family or household member, are offered alternative servicing arrangements,” the spokesperson said.
However the spokesperson confirmed it was DES providers that “determine whether appointments and other mutual obligations activities can take place over the phone or digitally”.
When President Joe Biden announced the Build Back Better framework in October, he called it “the most transformative investment in children and caregiving in generations” and “the largest effort to combat climate change in American history.” A month later, the House passed the Build Back Better Act, following through on Biden’s priorities by devoting $775 billion to family benefits and $560 billion to climate. But last week, Sen. Joe Manchin (D-W.Va.) said he “cannot vote to move forward,” denying the reconciliation bill the 50th Senate vote it needs to pass.
Manchin’s statement blames the bill’s size, describing it as “sweeping” and “mammoth,” and cites the Congressional Budget Office’s estimate that Build Back Better would add $3 trillion to the deficit over a decade if programs scheduled to expire were instead made permanent.
More fundamentally, though, the rejection represents a difference in values between the West Virginia senator and other congressional Democrats.
On the issues of child poverty and climate change, Democrats have a closer ally across the aisle.
Where Manchin may not vote to meaningfully address child poverty and climate change, Sen. Mitt Romney (R-Utah) would. In February, Romney released a Child Tax Credit expansion called the Family Security Act, and last week he urged Congress to use that plan as a starting point for bipartisan child benefit reform. Romney has also called for a carbon dividend onmultiple occasions, saying in October, “For the life of me I don’t understand why Democrats right now through reconciliation […] are not planning on putting in place a price on carbon.”
Romney would likely demand concessions on other parts of Build Back Better, especially the House bill’s $275 billion to expand the state and local tax (SALT) deduction and $270 billion to fund childcare. Liberal policy experts, too, have criticized these provisions: SALT expansion favors the rich, while childcare subsidies raise costs for unsubsidized parents, create welfare cliffs that discourage work, and exclude children in non-participating states. Romney’s Family Security Act instead repeals SALT and the Child and Dependent Care Tax Credit, making the plan progressive, especially paired with its child benefit, which is more generous than Build Back Better.
Renegotiating Build Back Better with Romney as the 50th vote could strengthen its anti-poverty and pro-climate impacts, but it’s not the only way to secure an expanded Child Tax Credit and carbon dividend if Manchin won’t vote for them. Nor do Democrats have to convince 10 Republican senators to join Romney and overcome the filibuster. Since the Senate can draft two reconciliation bills each year, they could use one for a Manchin Build Back Better Act and another for a Romney “Child Poverty and Carbon Emissions Reduction Act.”
With kids in poverty and a climate crisis already underway, Democrats don’t have the luxury of turning away allies. Romney could be their key to lasting change.
At least 20 guaranteed income pilots have launched in cities and counties across the U.S. since 2018, and more than 5,400 families and individuals have started receiving between $300 and $1,000 a month, according to a Bloomberg CityLab analysis. If all these programs complete their pilot periods as planned, they’ll have given out at least $35 million.
These figures mark the close of a year of rapid growth for U.S. programs that give some residents direct cash payments, with a half-dozen other pilots promised to launch in cities next year. For many advocates, the concept of “basic income” has evolved from the more expansive UBI — a universal basic income to all residents — to more targeted guaranteed income programs that have the goal of narrowing inequality and dismantling poverty.
As local programs sprouted up in cities across the U.S. in 2021, more than 60 mayors joined a coalition to advocate for the policy in their cities and nationally. Among Democrats, at least, it is no longer considered radical to propose giving low-income residents money with none of the traditional strings of welfare attached. And at the national level, Congress engaged in its own temporary mass cash distribution program, in the form of stimulus checks to the vast majority of Americans.
Still, the local programs are small in scale and duration, and the nationwide push to expand them comes as the quest for a federal guaranteed income policy has not yet succeeded. The fate of the closest thing to it — the child tax credit — hangs in the balance. Since July, the U.S. government has sent eligible parents between $250 and $300 a month for each child they have. With Congress in a stalemate on the federal spending bill, the chance of extending the benefit, which is set to expire at the end of December, looks unlikely. And there is still significant debate among those on the left over whether the massive government investment it would require to take basic income national should be a higher priority than other social programs like universal health care or affordable housing.
So if 2021 was the year of guaranteed income experiments launching and capturing the national imagination, 2022 will be the year we’ll see if these local, targeted experiments can translate into long-term shifts.
“Five years ago, we were talking about robots; we were talking about the future of work; we were talking about jobs in theory just disappearing altogether because machines were going to take over,” said Chris Hughes, an original co-founder of Facebook (now Meta) and the co-founder of the Economic Security Project, during a December panel discussion hosted by the nonprofit. Now, he said, “we’re talking about a new social contract; we’re talking about basic questions of deservedness, of racial and economic justice, of what we owe one another.”
Research findings grow
As the first phases of many of these pilots come to a close in 2022, advocates will have a growing body of research from which to draw policy.
But these initiatives aren’t the first test cases of how basic income works. So research is expanding in scope, beyond the question of whether regular cash assistance helps — proponents are already convinced that it does.
“I think personally that the body of knowledge that we have is already sufficient to push for change in the safety net,” said Stephen Nunez, the lead researcher on guaranteed income at the Jain Family Institute.
“This is a market economy and if you give people money, they’re going to be better off almost by definition by having money. The better question is better off compared to what.”
Evidence from other countries and from U.S.-led cash assistance programs has found that the monthly support sometimes reduces work hours slightly, Nunez said, and increases positive health outcomes. Early research on the 2021 U.S.child tax credit shows that families overwhelmingly spent their extra cash on food and utilities; the Census Bureau also found that the first payment alone corresponded with a drop in food insecurity in households with kids. In Stockton, California, where a basic income trial ended at the beginning of this year, the research group also reported mood improvements, less income volatility, and more full-time employment than before the money — and compared to the control group.
But critics worry that the limited duration and scope of these programs mean they’re not test cases for expansion. Among the most persistent concerns is that a guaranteed income will deter people from working at all — an outcome undercut by a Finland experiment but hard to definitively disprove.
Many of the newer pilots are designed to test optimal designs for these programs — things like the best disbursement methods, the most effective ways to combine them with other social safety net programs, and how to communicate their worth to the public, said Nunez.
Some are designed as randomized controlled trials, where researchers track outcomes for both control and recipient groups.Others are experimenting with different payment methods and periods: Compton compensates families between $300 and $600, on a sliding scale based on their size; Newark, New Jersey, which is starting its second phase this month, is paying half its participants $250 on a bi-weekly basis, and the other half twice a year, in two $3,000 installments.
Time ranges vary, with San Francisco’s $1,000-a-month for 130 artists lasting 6 months, while Hudson, New York, is paying a random selection of 25 low-income residents $500 a month for 5 years.
And unlike a universal program, which would include everyone, regardless of class, many of these guaranteed income pilots are laser-focused on specific communities that have experienced historic disinvestment, or have been most impacted by Covid, such as Black mothers and fathers, artists and low-income families. Other programs still in their design phase will target unhoused youth and foster youth.
Still,advocates emphasize that they don’t view guaranteed income as a replacement for other components of the safety net, but a supplement. “We’re not UBI maximalists,” Nunez said. For the uninsured, for example, he believes insurance would go a lot further. “Cash is not a solution to market failures.”
Shifting poverty narratives
The other goal of these guaranteed-income pilots is to shift narratives about how to address poverty in the U.S., which advocates say has failed to recover from Reagan-era notions about “welfare queens.” The Nixon administration piloted and almost passed a national basic income policy for all but the wealthiest Americans that was supported by even conservative economists.
“If you go back and you read the research on that, and try to understand why it didn’t happen, it really does feel like it came down to this human instinct of fear, or lack of trust, or doubt, in how an individual might behave if you just give them cash,” said Jill Shah, president of the Shah Family Foundation, which funded a guaranteed income program in Chelsea, Massachusetts, that gave 2,040 households up to $400 per month during the worst of the pandemic. “Like, how could it be so simple?”
It’s not enough for progressive circles just to talk about the toll of economic inequality and the promise of guaranteed income, said Aisha Nyandoro, the CEO of Springboard To Opportunities, a nonprofit organization that runs the Magnolia Mother’s Trust, a program out of Jackson, Mississippi, that is now giving its third cohort of Black mothers $1,000 a month. “It cannot be work that is typically only held by organizations that are led by brown and Black individuals,” she said at the Economic Security Project panel.
Nyandaro remembers being asked what she wanted the headline to be if the Magnolia Mother’s Trust was successful. “I want the headline to be ‘we were wrong,’” she said. “Meaning that individuals recognize that the narrative that they tell themselves about Black women is wrong.”
The fate of monthly child tax credit payments, which are set to expire at the end of this month, is murkier than ever after Senator Joe Manchin on Sunday said he wouldn’t vote for the Build Back Better Act, which would extend regular cash injections.
The senator from West Virginia has cited the bill’s cost and its potential to exacerbate inflation. He has also said he wants there to be a work requirement to receive the benefit and to limit payments to those making less than $200,000 annually. “I want social reforms to the point that [there is] responsibility and accountability,” he said in an interview with MetroNews on Monday.
Overwhelmingly, people who have received the child tax credit payments have used it for food, rent, and utilities and to pay off debt, data from the U.S. Census Bureau has found.
The credit functions as an advance for the tax refund two-parent households making less than $150,000 per year receive. Parents and caregivers get up to $300 per month for every child in their household under six and $250 per month for each older child. Families received the last of the six installments on December 15. The White House is exploring doubling payments in February, if legislation to extend the benefit passes.
So far, the majority of households making less than $50,000 per year are putting the payments toward debt, an August survey by the U.S. Census Bureau found. Higher income families were more likely to be saving the money.
Another report from the Center on Budget and Policy Priorities found 91% of households making less than $35,000 per year used the money to pay for food, shelter, clothing and other necessities. Black and Hispanic families were more likely to use their credits on education-related costs, such as school supplies.
The Biden administration has touted the initiative as a way to reduce child poverty. A study from Columbia University found that making the payments permanent could reduce child poverty in the U.S. by 40%. After the first credits went out in July, food insecurity in households with kids dropped from 11% to 8.4%, the Census bureau found.
One in four parents with young children also use the creditsto pay for child care, an October survey by the Census Bureau found. The Build Back Better Act sets aside $390 billion for subsidized child-care costs and universal, free pre-school.
In the face of the COVID-19 pandemic, and with economic and ecological crises only intensifying, it is easy to understand why so many people feel hopeless for the future. All the more so after this year’s UN Climate Conference (COP26) failed to provide the radical roadmap we need to avert climate catastrophe and as governments are trying to take us back to a dystopic, unequal “normal” despite early promises of a post-COVID re-set.
There are, however, hopeful signs of change, visible beyond the negative wall of impossibility erected by the corporate-captured media. One of these comes from South Korea, where the Democratic Party’s candidate for the presidency, Lee Jae-myung, is running on a platform arguably unmatched in its radicalism anywhere in the industrialised world.
Let me be clear at the outset that Lee is a controversial figure who is the subject of considerable critique from the left and the right, not least because of some allegedly questionable personal and political decision-making. This article, therefore, does not intend to uncritically lionise him as any kind of saviour. But the platform he is running on for the March 2022 presidential elections has such potential that it merits wider discussion.
Lee, who served as governor of Gyeonggi Province until October, is promising three major reforms: unconditional basic income (UBI), a land tax, and a carbon tax. Alone, each of these would be radical; together, they form the basis of a programme that could be transformative.
UBI is an idea almost as old as capitalism itself, and it aims primarily to attenuate the injustices of that economic system. It involves providing all people a regular cash stipend without a means test or work requirement. This would replace the complex, costly and often inefficient “benefits system” with a universal transfer set at an amount sufficient for survival.
Although simple, the implications of such a reform could be seismic.
Scholars argue that by removing the threat of destitution at the heart of the “free” market (either you accept whatever job is on offer or you starve), a UBI scheme could reduce deprivation and exploitation, liberate creative energy, allow women to leave abusive relationships, encourage men to trade work for child care, and enable all of us to re-train or pursue further learning. Perhaps just as significantly, UBI portends a shift in societal values away from “the more you are paid the more you matter” towards “we all matter so we are all paid”.
The idea of a land tax is similarly progressive. First floated by the Victorian reformer, Henry George, a land tax aims to reduce the economic rent that accrues to scarce or monopoly-controlled resources like land with a view to redistributing wealth and fostering productivity. George recognised that when the resources that we all need to survive are privatised by a select few, they can extract exorbitant rates from those able to pay while excluding those who cannot.
This leads to ever-greater concentrations of wealth alongside rapidly rising inequality, which – economists like Thomas Piketty argue – we need wealth taxes to address. It is no coincidence that Lee’s manifesto refers to the land tax as “a corrective”.
Also corrective is his manifesto’s third radical pillar – the carbon tax. Carbon taxes are widely advocated across the political spectrum as a way to wean our economies off of carbon dependence and move towards the clean, green technologies that will be vital if we are to avoid the worst of climate chaos.
The principle is similar to that underpinning the taxing of tobacco and cigarettes: we know that both are damaging, so elected governments impose tariffs to make their use less and less attractive and to fund public spending with the proceeds. In Lee’s case, the dividends would be used to fund a transitional UBI before other revenue streams come online, making the link between the economic and ecological crises and how to deal with them thrillingly explicit.
Indeed, beyond the potential that each of these individual reforms has, it is precisely the fact that they are woven together in a coherent attempt to tackle climate and capitalist crisis that is so exciting. Lee’s manifesto boldly states that its goal is to foster the “transition to a sustainable economy…[to] transform a carbon civilisation into an ecological civilisation…[and to] transform the rent-seeking economy into an innovation-seeking economy”.
These are worthy goals in any context and echo calls for a Green New Deal on both sides of the Atlantic.
What makes them radical in the full sense of that term (which derives from the Latin word meaning “root”) is that they collectively aim to address the underlying causes of the interlinked issues we face, and not just their symptoms.
Lee’s project is far from perfect. A major issue, for example, is the arguably paradoxical attempt to marry radical transformation with sustained growth – surely, a chimera when we live on a finite planet and an idea subject to sustained critique from de-growth advocates and steady state economists alike. However, his proposals match in their ambition the seriousness of the task before us and they far outstrip what is on offer in other advanced economies.
Should Lee go on to win next year’s election, then South Korea could come to represent the model for other progressive leaders to emulate. For such a victory will show that hopeful, transformative visions still have a place in our politics.
OTTAWA – This morning, NDP MP Leah Gazan (Winnipeg Centre) introduced a private member’s bill to develop a national framework for a permanent Guaranteed Livable Basic Income (GLBI) in Canada. Gazan says, as the pandemic continues, it’s never been clearer that people in Canada need financial support and a stronger social safety net.
“Since the pandemic began more people are living in poverty, while the wealthiest have become even richer. It’s shameful that the government is standing by and letting this happen,” said Gazan. “This bill is a response to calls for a guaranteed livable basic income from Indigenous, territorial, provincial and municipal jurisdictions who clearly recognize the need to modernize our social safety net. A GLBI is not only good for our economy but also critical to ensure that all individuals are able to live with dignity and security – rights afforded in the Canadian Charter.”
Gazan is proposing a GLBI for all people living in Canada over the age of 17 regardless of participation in the workforce or an educational training program. Regional differences in the cost of living are considerations addressed in the bill and there are provisions to ensure a GLBI would not mean clawbacks to services or benefits meant to meet an individual’s exceptional needs related to health or disability.
NDP critic for finance, Daniel Blaikie, joined Gazan to speak to media about the important initiative.
“While many factors contribute to the problem of poverty, there is no way to solve the problem without ensuring people have a liveable income,” said Blaikie. “The pandemic has shown how fragile our collective and personal economic well-being truly is… but it also showed that, when we work together, we have the power to provide financial security and dignity to our fellow Canadians. Leah’s bill would make income security a fundamental part of Canada’s economic framework grounded in respect for the rights and dignity of human beings. I am proud to second her bill and call on Canadians from coast-to-coast-to-coast to support this initiative for social and economic justice.”
Besides helping everyday families cover the cost of rent, food and other expenses, Gazan says a GLBI would help to protect people who are made most vulnerable by systems in our society.
“This isn’t just good financial policy; there is a direct correlation between increased rates of violence and poverty,” said Gazan. “The National Inquiry into Missing and Murdered Indigenous Women and Girls calls for a guaranteed livable basic income as a critical, life-saving measure for Indigenous women, girls and Two-Spirit individuals. If the government is serious about reconciliation, they need to get this done.”
Advocacy groups like Basic Income Manitoba, Coalition Canada and Basic Income Canada Youth Network have also expressed support for Gazan’s bill.
A panel recommends South Africa gradually implements a basic income grant, beginning with the institutionalisation of a monthly welfare payment introduced last year to offset damage wrought by the coronavirus pandemic.
“There is no alternative to a system of income support for income-compromised adults from the ages of 18 to 59 as a permanent part of the social protection framework,” Alex van den Heever, chair of social security systems administration and management studies at the University of Witwatersrand and a member of the panel, said on Monday.
The panel was appointed by the department of social development, the International Labour Organisation and the UN-backed Joint Sustainable Development Goals Fund.
The monthly welfare payment of R350, which was reintroduced after civil unrest in July, is set to end in March.
While about 18-million South Africans, or a third of the population, receive welfare payments, most come in the form of old age pensions and child support payments.
Finance minister Enoch Godongwana last month resisted calls by civil society groups for increased welfare spending and the introduction of a basic income grant, a policy business organisations say is unaffordable. The National Treasury has said it will only set aside additional funds for social relief if state finances improve by February next year.
While about 18-million South Africans — a third of the population — receive welfare payments, most come in the form of old-age pensions and child support payments.
SA is one of the world’s most unequal nations, according to the Thomas Piketty-backed World Inequality Lab.
It appears that the Government is moving ahead with a plan to provide Barbadians with a universal basic income, which may come in the form of a “citizen’s dividend”.
Avinash Persaud, Special Envoy to the Prime Minister of Barbados on Investment and Financial Services, in a recent posting on Facebook, indicated that this was on the cards.
He suggested the “citizen’s dividend may be combined with the annual reverse tax credit to form some kind of universal basic income”.
A Universal Basic Income (UBI) is defined as a government programme in which every adult citizen receives a set amount of money regularly. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.
“We are moving towards universal basic income across three fronts,” he said while commenting on the absence of a government representative on a panel discussion being hosted on the subject.
Persaud wrote: “Despite all the pressure from international agencies to ‘target’ we hold the line on universality. That’s why we restored free tertiary education for all. International studies have shown this is critical to social mobility and opportunity. The less well-off cannot take on the payments, risk and worry of getting heavily in debt to secure their future.
“It’s also why we created the new Business Interruption Benefit for self-employed National Insurance Scheme (NIS) members, giving them some basic income support for the first time even without them having a standard employment contract. The Government is reviewing all NIS benefits to make sure they are relevant to modern work and that all continue to view the NIS as their social security system and not just those in traditional employment.”
Persaud also spoke to the Government’s Sovereign Wealth Fund, which he said will own all of the Government’s assets and the administration will “make them work for all Barbadians”.
He said the assets “not needed for government operations” will not be sold but used to generate income or swapped for assets that can.
“The idea is that some of the income produced every year would be given back to all citizens over the age of 18, perhaps in the form of a citizen’s dividend.
Over time the citizen’s dividend and reverse tax credit could form the basis of a universal basic income and create a greater sense of belonging to all of our people. We welcome other practical, effective ideas on how to achieve this goal quicker.”
The Government advisor added that one of the critical issues of the universal basic income was the mechanism of financing.
“Barbados’ highly innovative reverse tax credit, introduced by the Owen Arthur Administration – the envy of many developed countries – was the first [foray] into a universal basic income. That was long the objective. Under the reverse tax credit, if your income is not above some basic level, the Government will top it up with a payment or reverse tax credit.
“This is one of the practical ways a developing country could quickly get to the universal basic income. Therefore, it was regrettable that in 2016-2017, the last Government stopped paying it – they said they had no money. But everything is a tradeoff.
Like free tertiary education, they should have prioritised this kind of instrument. Since 2018 it has been paid and extended,” he stated on the social media platform.
Speaking at The Wall Street Journal’s CEO Council Summit on Tuesday, West Virginia Senator Joe Manchin issued a dire warning about the threat of inflation. “The unknown we’re facing today is much greater than the need that people believe in this aspirational bill that we’re looking at,” he said, referring to the Build Back Better Act, a multitrillion social spending bill. “And we’ve got to make sure we get this right. We just can’t continue to flood the market as we’ve done.” Manchin has expressed similar concerns before, but the timing here was not accidental: Senate Majority Leader Chuck Schumer has said he hopes to pass the bill before Christmas.
While Manchin was droning on about inflation, House Democrats and Republicans were finalizing a $768 billion defense bill, which would ultimately pass on Tuesday in bipartisan fashion: 363–70. That bill—whose ultimate figure was higherthan what the Pentagon had even asked for—would authorize a 2.7 percent raise for the military, block the Pentagon from acquiring products produced with forced labor by Ugyhurs in China, and create an independent commission to examine the war in Afghanistan (better late than never!). The bill, known as the National Defense Authorization Act, or NDAA, has not passed the Senate yet, but it is expected to sail through with far less fuss than the Build Back Better Act. Naturally, among the things that favor its chances, is the fact that Manchin has said little about how the outlay could accidentally spur inflationary fears or any such concerns about a huge sum of money getting spent. It is essentially a blank check.
Much has been made of the Build Back Better Act’s price tag—$1.7 trillion at this moment, cut down from an initial wish list more than twice as high—and its potential effect on inflation and the larger economy. For conservative Democrats like Manchin, the figure is astronomical—more than a trillion bucks!—and potentially unconscionable, given things like the rising price of gas and other commodities.
But that figure is somewhat misleading. The $1.7 trillion in spending is spread out over 10 years—meaning that the actual yearly outlay is much lower. The defense spending bill, on the other hand, applies only to 2022. If that figure was dealt with in the same fashion, it would come to north of $7.5 trillion. And yet it has hardly registered either politically or in the media. The social spending bill, however, has been a furious subject of granular debate for several months, much of it focusing on cost—with Republicans and Democrats insisting that the country simply cannot afford to pay such an immense figure for things like paid family leave and universal pre-K.
The biggest reason the defense bill has largely flown under the radar—despite being massive—is bipartisanship. Most Democrats and Republicans agree that giving raises to the military is a good thing and spending more (and, in this case, it’s worth underlining: literally spending more than the Pentagon asked for) on defense is an unalloyed good. Because there is relatively little debate over the bill—and, crucially, because the mainstream of both parties reflexively support it—the mainstream press is covering it, unsurprisingly, as a fait accompli. This bill will ultimately pass without much in the way of argument or debate or intraparty disarray, and therefore there’s nothing to cover.
For a media that is primed only to cover politics as a conflict between a red team and a blue team, this bill is basically a nonentity.
And given the press’s squeamishness in covering the military more broadly—emblematic most recently in the disastrous coverage of the withdrawal from Afghanistan, itself a product of the mass media’s cozy relationship with camera-ready celebrities from the military and intelligence fields—little effort goes into even suggesting that there might be anything remotely controversial about military spending. All of this is happening, it’s worth adding, in a presidential administration that has wound down both the war in Afghanistan and the drone war.
The coverage of the Build Back Better Act has been an entirely different beast, and it can be hard to parse the logic why. Its provisions are not just popular with the public but exceptionally popular and, in most cases, on a bipartisan basis: By and large, Americans want universal pre-K, cheaper prescription drugs, and paid family leave. But the bill has ended up being defined not by its merits, or by the public’s needs, but rather by headline-ready conflicts between politicians.
On one front, Republicans insist that the bill is too large and will lead to inflation, while conservative Democrats like Joe Manchin have raised a host of vague objections.
This is catnip for the political press: the usual partisan conflict with the added thrill of one party in disarray. These objections have thus been pushed into stories over and over again in print and on cable news, cementing them in the minds of voters. On a second front, there is a gaping empty space that the media’s coverage has left unfilled, due to a lack of effort in explaining what programs will or could end up being funded or expanded by the actual bill, and an unwillingness to offer a comparison to other types of government spending—such as military spending, which is always deemed to be “must pass.”
The comparison is instructive. Both parties have no problem swiftly moving through a gargantuan military spending bill. Meanwhile, one containing a host of social spending programs and increases is endlessly debated not on its merits but on its cost: Can we really afford to spend $400 billion over 10 years on universal pre-K? Can we do so now at a time when gas costs more than $3 a gallon?
In doing so, the media is facilitating a context collapse that keeps ordinary people in the dark, creating an odd situation in which massive military spending is treated as not just a perennial inevitability but something that is simply never up for any serious debate, when it is, in fact, a choice. Meanwhile, popular social programs that would help limit generational poverty are being treated as not just a choice but an extravagance. Right now, these programs are something that serious people will argue cannot be considered in a time of rising costs. Of course, if we weren’t experiencing an inflationary blip, a different set of arguments would simply get dusted off and pressed into service. As always, “But how will you pay for it?” remains the dominant question—at least for some things we’re paying for! People like Joe Manchin, meanwhile, will never ask the military to tighten its belt. They will demand that Democrats consider jettisoning a popular agenda.
As Congress continues to debate the Democrats’ Build Back Better legislation, a new analysis finds that almost 10 million children could potentially fall back into poverty without the extension of the enhanced child tax credit (CTC).
An estimated 27 million children will receive less than what they are currently getting, or will receive nothing at all, if the current credit is not extended past this year, according to the Center on Budget and Policy Priorities (CBPP). More starkly: An estimated 9.9 million children will fall back behind the poverty line without the monthly enhanced payments.
Among other changes, the CTC was increased this year from $2,000 per child to as much as $3,600 per child, as well as extended for the first time to families who do not typically file a tax return because their income is too low. Half of the full amount is also being sent out in monthly installments rather than as a lump sum at tax time, with the final 2021 payment scheduled to be disbursed Dec. 15. Additionally, 17 year-olds qualify for the payment for the first time.
These changes have helped millions of households, particularly low-income households, pay for basic necessities like groceries and clothing, reports and Census data have shown. If the changes are extended beyond this year, as President Joe Biden and other Democrats are pushing for, then the number of children experiencing poverty is expected to fall by more than 40%.
But “if the expansions end in 2021, this historic progress would be reversed, driving child poverty up substantially,” the CBPP reports.
Without it, the payments will shrink — the maximum credit would fall by $1,000 per school-aged child and $1,600 per child under 6 — and the lowest-income families would be ineligible once again. It would also revert to a lump sum payment included in the household’s tax return, as opposed to the monthly payments families have come to expect.
Some lawmakers worry that, at a price of $100 billion a year, it is too costly to continue in its enhanced form. Sen. Joe Manchin (D-W.V.) has said he wants to impose a work requirement on the credit and limit the program to families earning $60,000 or less. Democrats need all 50 senators on board to pass their agenda.
But many economists support the extension of the advanced credit, arguing that “can dramatically improve the lives of millions of children growing up in the United States and promote our country’s long-term economic prosperity” by reducing child poverty.
Workers’ share of corporate revenues has fallen for two decades to the benefit of owners and investors.
The labor shortage is closing that gap, and companies will have to shift cash from profits to pay, the bank said.
That means the end of corporate excess and a return to profit margins seen in the 1990s.
Morgan Stanley says it’s time for corporations to roll back their profit margins to where they were about thirty years ago — all in the name of worker power.
The investment firm’s research division released a report this week highlighting the gap between corporate profits and worker wages. The discrepancy has taken on new relevance in the pandemic-era economy amid the extraordinary labor shortage. Businesses have struggled to rehire, and workers continued to quit at record rates in September. The trends have fueled a new focus on decades of meager wage growth — and fresh scrutiny of companies’ blockbuster profit gains.
To make up for underpaying workers, Morgan Stanley says corporations should dial back their own profits for the next five years to retroactively fill the gap. After all, the other option to make up for the higher wages being demanded by workers is to raise prices. Those profits, researchers write, should resemble their 1990s level.
“Real wages currently still have to grow by 7.3% in excess of productivity growth to make up the gap,” the report reads. “If this catch-up takes place over the next 5 years, unit profits will fall 33% from current levels… This would move the corporate profit share back to its 1990s average on a pre-tax basis, and leave it just marginally above on a post-tax basis.”
The team, led by chief US economist Ellen Zentner, argues that reducing the gap between profits and worker pay can serve as a “buffer” against higher wages driving prices higher. In turn, trading profits for higher wages would help minimize inflation while reaching the Federal Reserve’s “maximum employment” goal, the team said.
The labor shortage is the US’s new normal
The chasm between compensation and productivity is a relatively new one, Morgan Stanley added. There was a “tight” relationship between the two in nearly every industry from 1950 to 2000. As businesses’ revenues rose, worker pay generally climbed in lockstep.
That link snapped in the 2000s, according to the bank. Workers’ wages started to lag profit growth. Institutions that boosted worker power like unions and high minimum wages weakened. Corporations’ owners and shareholders, meanwhile, benefitted from booming earnings and soaring stock values, Morgan Stanley said.
The gap between company profits and worker compensation in the past two decades is unprecedented and threatens the structure of the economy, the bank said.
“This divergence between real compensation and real productivity had never before been seen in the recorded data,” they said, adding the drop in worker pay “marks a break in the fundamental structure of the economy.”
Closing the gap wouldn’t be a seamless transition, the bank added. Raising wages in today’s tight labor market could put downward pressure on stocks in the near future. Still, strong corporate earnings and “ample liquidity” would cushion against a major selloff, the team said.
Reverting to the profit-wage structure of the 1990s is less radical than it may seem, the economists added. Wage growth rebounded during the pandemic as businesses scrambled to attract workers. The unusually tight labor market is already reversing the trend of the last two decades and policy is “[tipping] the scales in favor of labor,” the team said.
It turns out, the labor shortage already kickstarted that economic time travel.
Nine days later, however, Reynolds signed legislation that pays vaccine refusers to do just that: sit on the sidelines. Under the new law, anyone “discharged from employment for refusing to receive a vaccination against COVID-19 … shall not be disqualified for benefits.” Reynolds is one of many Republican politicians who openly advocate, and in some states have successfully imposed, a two-tiered system of unemployment insurance. It’s not a left-wing policy of money for everyone or a right-wing policy of money for no one.
It’s a policy of pernicious hypocrisy: welfare for vaccine refusers, tough love for everyone else.
Under these new laws, any worker who gets fired for broadly defined “misconduct,” such as flunking an employer-imposed drug test, is disqualified from unemployment benefits—but employees who refuse COVID vaccination are glorified, protected, and subsidized. The state must guarantee, in Reynolds’ words, that these reckless freeloaders “will still receive unemployment benefits despite being fired for standing up for their beliefs.”
The GOP’s coddling of vaccine refusers makes a joke of its rhetoric about self-reliance. This summer, for instance, Tennessee Gov. Bill Lee ended the federal government’s supplemental COVID-era unemployment benefits. “We are paying people to stay home. That needs to change,” he declared. But two weeks ago, Lee signed legislation that pays vaccine refusers to stay home. Under Tennessee’s new policy, the state’s normal rule about employees fired for “misconduct”—that they lose their eligibility for unemployment benefits—can no longer be applied to anyone who is terminated for “refusing to receive a vaccination for COVID-19.”
In fact, the Florida law says that if you’re unemployed and you’re offered a job that requires vaccination, you can turn it down and stay on the dole.
Last week, Kansas adopted the same policy: You can keep drawing unemployment checks while declining job opportunities, as long as you specifically refuse “work that requires compliance with a COVID-19 vaccine requirement.” And if you were recently fired for refusing vaccination—or if you were previously denied unemployment benefits because you refused job offers that entailed vaccination—the state now promises that you’ll be “retroactively paid benefits” going back to the beginning of September. This bonus payout is yours, as a special kind of welfare recipient, even if you have “not requested retroactive payment of such benefits.” Tennessee has enacted a similar clause promising “retroactive payment of unemployment benefits,” without a specified time limit.
Prior to the enactment of these laws, the standard policy about job termination for “misconduct” in most states—i.e., that such offenders were disqualified from unemployment compensation—was generally understood to cover vaccine refusal. Kansas law, for instance, defined misconduct as “a violation of a duty or obligation reasonably owed the employer as a condition of employment including, but not limited to, a violation of a company rule, including a safety rule.” Under Florida law, misconduct included “disregard of the reasonable standards of behavior which the employer expects of his or her employee.” Tennessee’s law was almost identical. Refusing vaccination, in the midst of a respiratory pandemic that has killed millions of people, was a pretty obvious safety violation. Now it’s been elevated to a sacred right.
The new state laws also make a mockery of religion. Under Florida’s statute, if an employee simply “presents” a statement “indicating that the employee declines COVID-19 vaccination because of a sincerely held religious belief,” “the employer must allow the employee to opt out of the employer’s COVID-19 vaccination mandate.” Iowa’s policy is similar. The Kansas law orders employers to accept such requests for religious exemptions “without inquiring into the sincerity of the request.” By framing vaccine refusal as religious freedom—while making it impossible to ascertain whether the refusal is truly grounded in religion—the GOP is wrapping its constituency of anti-social moochers in a cloak of martyrdom.
Republicans also argue that vaccine refusers deserve special treatment because it’s wrong, as a matter of personal autonomy, to let employers dictate workers’ health decisions. As DeSantis put it two weeks ago, “We are respecting people’s individual freedom.” But that’s not how DeSantis treats marijuana. Under Florida law, if you flunk an employer-imposed drug test, that’s “misconduct,” and it bars you from unemployment benefits if you’re fired. And if you apply for a new job—but you’re rejected for failing a drug test “required as a condition of employment” in that job—you’re further disqualified from unemployment benefits “for refusing to accept an offer of suitable work.”
Let’s pause to appreciate the Orwellian majesty of this sequence. 1) You, a responsible citizen, have gotten your COVID shots and want to be productive, so you apply for a job. 2) The prospective employer demands that you take a drug test. You test positive for marijuana, so the employer rejects you. 3) Based on the employer’s rejection of you—not your rejection of the employer—Florida declares that you have refused the job offer and are therefore disqualified from unemployment benefits. However, 4) your neighbor, who was fired for refusing COVID vaccination and has turned down two subsequent job offers that required COVID vaccination, continues to collect unemployment checks.
Meanwhile, under the same Florida law, employees who leave their jobs because they’re afraid of getting COVID become ineligible for unemployment benefits, unless they can prove to the DeSantis administration that this fear constituted “good cause” to quit. They’re treated more harshly than people who quit because they’re afraid of a federally approved vaccine.
This is how Republicans define “personal responsibility.”
Iowa has the same rule about employer drug tests. Its law specifically names marijuana as a substance that merits disqualification of the user from unemployment benefits. Under the Kansas statute, a “positive breath alcohol test or a positive chemical test” is “conclusive evidence of gross misconduct,” with extra penalties—beyond ordinary misconduct—for anyone seeking unemployment assistance. And in Tennessee, losing your job for “refusal to take a drug test or an alcohol test” can be “deemed to be a discharge for misconduct connected with work,” rendering you ineligible for assistance. When Republicans claim that their defense of vaccine refusers is based on a principled commitment to the physical autonomy of employees—as they did at a Senate press conference on Tuesday—don’t believe a word of it.
This isn’t a party of personal autonomy, moral responsibility, free enterprise, limited government, or self-reliance. It’s a party that has casually tossed aside each of these values, first for Donald Trump and then for COVID. Today’s GOP believes that the government should control workplace policies and should subsidize freeloaders who endanger their communities. It’s the party of socialism for anti-vaxxers.
FORT LAUDERDALE, Fla. (AP) — The Democratic Florida congressional candidate who lost a special election primary by five votes has filed two lawsuits asking that the result be thrown out, alleging his opponent’s support of a universal income plan amounted to bribing voters.
Dale Holness alleges Sheila Cherfilus-McCormick’s support of a proposal that would pay most U.S. adults $1,000 a month was an attempt to illegally bribe voters. His lawsuit also wants counted 18 overseas mail-in ballots received from military members and others that were rejected by elections officials because they arrived after Election Day and, officials said, didn’t qualify for an extension. He also says Cherfilus-McCormick should be disqualified because she did not file a financial disclosure form with the U.S. House.
Sheila Cherfilus-McCormick waits for the results of a machine recount at the Voting Equipment Center in Lauderhill, Fla., Nov. 5, 2021.
Cherfilus-McCormick, a health-care company executive, won the Nov. 2 primary to replace longtime U.S. Rep. Alcee Hastings, who died of cancer in April. Florida’s 20th District is overwhelmingly Democratic and she is heavily favored to win the January general election to fill the last year of Hastings’ term. The state certified her victory two weeks ago, saying she received 11,662 votes to Holness’ 11,657.
“None of the three allegations are even close to having merit. They are not in a gray area,” her campaign’s attorney, Mitch Ceasar, said Tuesday. He said the issues were already raised with the canvassing boards that oversaw the election and were dismissed.
In the lawsuits, filed jointly on Thanksgiving Eve in Palm Beach and Broward County circuit courts, Holness pointed to several campaign fliers and billboards where Cherfilus-McCormick touted her support for the “People’s Prosperity Plan.” It calls for the federal government to pay $1,000 monthly to every adult who makes less than $75,000 annually. While some progressive Democrats in Congress have supported such plans, there is no chance one would pass in the foreseeable future.
Holness, a Broward County commissioner, called Cherfilus-McCormick’s support “a gimmick designed only to motivate people to vote for her.”
“The ‘plan’ is intended to offer false hope to underserved communities with the intention and purpose of procuring votes,” Holness’ attorneys wrote. They said some district voters told elections officials they had cast ballots for Cherfilus-McCormick and wanted information on how to claim their $1,000.
Ceasar said Cherfilus-McCormick’s proposal is an “aspirational hope” that is protected by her First Amendment free speech rights.
Holness also claims Broward County erred when it rejected some mail-in ballots as being late. Under Florida law, mail-in ballots must be received by 7 p.m. Election Day with one exception: ballots sent by military personnel and other Floridians living outside the country have 10 additional days to arrive, if postmarked by Election Day. Broward County officials said they rejected the ballots, which arrive in special envelopes, because they appeared to have been mailed from within the United States or had no postmark indicating where they were mailed from.
Holness argues the lack of proof that the ballots were sent from a foreign country should not disqualify them, but Ceasar said some of the ballots were postmarked within the district.
Holness also said Cherfilus-McCormick’s failure to file a financial disclosure form with the House disqualified her from running. She loaned about $2 million to her campaign and Holness argues voters have a right to know how she earned that money. While the forms are required, many non-incumbent candidates fail to file them and that does not result in their disqualification as the House cannot punish someone before they are a member. Ceasar said she has filed for an extension.
Guaranteed income programs are popping up everywhere in the US. It is time to expand beyond local pilot programs and embrace a nationwide Citizen Dividend, an annual distribution of a share of business profits to every American, to beat back against rising economic inequality and hold true to our deepest American values.
Three years ago, perhaps the only widely known American guaranteed income program was the Alaska Permanent Fund which doles out annual payments to every Alaskan funded from state oil and gas revenue. In recent years, pilot programs giving $500 – $1,000 a month to low-income residents have been implemented or proposed in Stockton, California; Jackson, Mississippi; Phoenix; Pittsburgh; and Chicago.
Perhaps the simplest, widest-reaching, and easiest to implement form of guaranteed income we could adopt would be the Citizen Dividend. The debate around guaranteed income often boils down to two fundamental questions: Who deserves the income and how can we pay for them? With a national Citizen Dividend, we answer both of those questions clearly and compellingly.
First, who deserves this income? We all do. No business in this country turns a profit without using wealth we all own together – our natural resources; our societal resources like our roads, our public safety, and our education system; and our inherited systems like our Constitution and our courts. Every citizen has an equal ownership stake in these forms of collective wealth. Therefore, each American deserves some slice of the profits realized by their use. Sure, individual hard work, talent, and good strategy help bring about business success. Imagine though trying to create value without energy, roads, courts, and an educated workforce. It would be downright impossible.
Second, how do pay for this income? A Citizen Dividend is funded through one form of our collective prosperity – business profits. Businesses should retain 95% of their profits to invest in growth, return wealth to private shareholders, and pay the government for the services our society needs (e.g. taxes). But 5% of those profits should be returned to each American in recognition of the collective wealth that was used to create those profits.
Easy to understand and clear in its funding, a Citizen Dividend would have a meaningful positive impact on the lives of Americans and on the fabric of our economy.
Using 2015 estimates on business net income, a Citizen Dividend could return $570 to each American every year – or over $2,200 for a family of four. This payment – which amounts to nearly two months of rent or food for the median American family – could stave off some of the harshest impacts of rising inequality. But perhaps more importantly, it would challenge the false narrative that profit is created merely through individual action and that wealth should be hoarded by those who have the opportunity to do so. Instead, it would reinforce a deeper American story, that we are our best as a nation when we come together across all our differences to blaze a trail toward a common future.
A Citizen Dividend breathes life into the spirit of our nation’s first motto – E Pluribus Unum– out of many, one.
It is time we recognize what truly belongs to every American and be bold in our willingness to build an economy that reflects our best values. It is time for a Citizen Dividend.
Almost twice as many voters support the idea of a universal basic income compared to those who oppose the idea, a new poll for LFF has found.
The poll, carried out by Savanta:ComRes, found that 44% of respondents support the idea of a universal basic income compared to 23% who oppose it.
A universal basic income (UBI) is a regular cash payment every individual receives, without any reference to their other income or wealth and without any conditions. A UBI would help alleviate poverty, provide a degree of economic security and give people real freedom over their lives. It would also remove the uncertainty and stress that so many who receive means-tested benefits face, fearing a sudden withdrawal of support that will push them into poverty, as we saw with the government’s decision to scrap the £20 uplift in universal credit which it is estimated will push 200,000 children into poverty.
While critics argue that ‘free money’ will mean a greater number of people dropping out of work, studies of UBI trials have found the exact opposite.
While 33% of 18-24 year olds support the idea of a universal basic income, the number rises to 46% of those aged 65 and over.
When it comes to party affiliation, 41% of Conservative Party voters support the idea of a universal basic income as do 55% of Labour Party voters, 54% of Liberal Democrat voters and 57% of Green Party voters.
Opposition to a universal basic income was highest among Conservative Party voters at 29%, with just 17% of Labour Party voters and 20% of Lib Dem voters opposing too.
A spokesperson for Basic Income UK told LFF: “This poll is broadly in line with previous opinion polls on universal basic income, although it’s unusual in finding more support amongst older people than younger people.
“It would be interesting to know whether that’s an effect of the government measures around covid-19, or the rise in state pension age affecting many over 65, or a combination of these factors. Younger campaigners for UBI call it ‘our generation’s NHS’ and we’ll continue to spread the word that everyone deserves the means to live.”
The question asked was the following: Universal Basic Income (UBI) is a system in which all adults regularly receive an equal payment paid by the government without a means test. To what extent, if at all, do you support the idea ofa Universal Basic Income
Representative poll of 2184 GB adults. Prepared by Savanta: ComRes
During the pandemic, women have exited the labor force at twice the rate of men; their participation in the paid labor force is now the lowest it has been in more than 30 years
They call it “the Great Resignation”. According to the Bureau of Labor Statistics, 4.4 million Americans quit their jobs in September. The analytics firm Visier puts it in even starker terms, reporting that one in four workers quit in the past year. Job separations initiated by employees – quits – have exceeded pre-pandemic highs for six straight months. After the insecurity of the pandemic and the mass layoffs in hard-hit industries, many had predicted that the Covid crisis would yield more job retention and sterner worker competition as people sought stability in an uncertain time. Instead, employees are showing themselves more willing than ever to quit or change their jobs. The result has been a labor shortage, as employers struggle to find people to work and wages have finally been forced up. In an unexpected twist, the dawn of the post-pandemic era has brought with it a surprising moment of labor power.
Most popular explanations for the Great Resignation focus on the shifting sentiments of workers. “The pandemic was sort of a nationwide awakening during a very stressful time,” Anthony Klotz, a psychologist at Texas A&M who coined the term “Great Resignation”, told NPR. “Most people were reflecting on their lives at the same time that work was causing them burnout, or they were really enjoying working from home.”
But while the introspection occasioned by quarantine may have led some workers to reassess their priorities and willingly change their lives, such an explanation for the sudden disappearance of so many people from the job market might be better explained by material factors.
The fact of the matter is that when we speak of the Great Resignation, we are really referring to a great resignation of women. During the pandemic, women have exited the labor force at twice the rate that men have; their participation in the paid labor force is now the lowest it has been in more than 30 years. About one-third of all mothers in the workforce have scaled back or left their jobs since March 2020. That labor shortage? It’s being felt most acutely in sectors like hospitality, retail and healthcare – industries where women make up a majority of workers.
When we speak of the Great Resignation, we are really referring to a great resignation of women.
Why are women leaving the workforce at such a disproportionate rate? It’s not because they have been on personal journeys of soul-searching and self-discovery. It’s because they have nowhere to put their kids. Schools were closed for much of two straight school years; many still face interruptions, quarantines and closures. And for the parents of even younger kids, daycare centers, already unaffordably expensive and in dramatically short supply before the pandemic, closed in record numbers over the past year. Now, costs have been driven even higher; waiting lists can stretch for months.
It might be more accurate, then, to say that as far as working mothers are concerned, the Great Resignation doesn’t reflect women leaving the workforce. It reflects them being forced out.
The pandemic made women’s exit from the labor force rapid and highly visible. But the loss of female workers is nothing new. Women’s workforce participation rate has been declining steadily since the 2008 financial crisis. The pandemic merely accelerated an already alarming trend. Childcare – along with its generational inverse, elder care – have always been among the primary culprits. American disinvestment in the care economy has waged a war of attrition on women’s employment, with women forced to chose between jobs where they are paid too little and childcare solutions that cost too much. The result has been a massive loss of talent, creativity and human potential from the paid economy. When care is not invested in, women are not prioritized – and that means that half of the nation’s minds risk being exiled to the domestic sphere.
Women are forced to chose between jobs where they are paid too little, and childcare solutions that cost too much.
The economic impact of women’s expulsion from paid work is being felt acutely now, as the service and healthcare sectors struggle to find workers. But the moral impact has been felt for decades. The first time the first woman sat down and calculated that sending her kids to daycare would cost more than she could earn at her job, the nation was already in crisis. The loss of women from the paid workforce – a trend not seen on anything like the same scale in countries with sane and responsible investments in their care infrastructure – makes the US economy less competitive, and makes families less prosperous, leading to worse outcomes for households over the long term. And it also makes women less equal, less powerful and often less challenged and fulfilled in their individual lives – a great loss unto itself.
The trend of women leaving the workforce to care for their children has often been explained as a matter of women’s personal choices. But to the women facing the stark financial reality that they can’t afford both their own professional ambitions and to meet the needs of their kids, it doesn’t feel like much of a choice at all. It feels like their options have been narrowed so much that the choice has been made for them.
Maybe commentators have become blind to women’s needs, or accustomed to ignoring them.
With so much of the labor shortage being driven by women’s forced exit from paid work, why has the “Great Resignation” been spoken of as a shift in sentiment and attitudes, rather than as a response to women’s caregiving responsibilities? Maybe one reason is that commentators have become blind to women’s needs, or accustomed to ignoring them. That might explain why major economic shifts have been explained with theories about gender-neutral emotions – rather than gender-specific material realities.
But to be fair, not all of the labor shortage can be explained by the childcare crisis pushing women out of the workforce. No doubt there are, in fact, many workers reassessing their priorities and demanding more from their employers – as well they should. But workers who are quitting their jobs for other reasons have the power and flexibility to do so because of a labor shortage caused in part by a mass forced exit of women from the workforce. It’s a reality that casts the victories of rising wages and employer concessions in a more complex light. This moment of worker power – a social good – has been in part subsidized by the expulsion of mothers from the workforce – a generational tragedy.
Tens of thousands of low-income families who signed up to receive the expanded child tax credit before the November 15 deadline could receive six months of payments next month.
The size of the tax credit was increased as part of President Joe Biden‘s $1.9 trillion coronavirus relief package earlier this year and made fully available to families without tax obligations.
The credit is now $3,600 annually for children under the age of six and $3,000 for children aged 6 to 17. Six months of payments were advanced on a monthly basis through the end of 2021, meaning eligible families receive $300 monthly for each child under six and $250 per older child.
Eligible families were automatically enrolled, based on their 2020 tax returns, but those who weren’t legally obligated to file returns because they don’t earn enough had to sign up to receive the payments.
Low-income families who signed up before the November 15 deadline will receive all the money they are owed in the December 15 payout, according to the Internal Revenue Service. That means a payment of up to $1,800 per child under six and up to $1,500 per child over six.
They had to register using GetCTC.org, a non-filer sign-up tool built by the nonprofit Code for America in collaboration with the White House and the Treasury Department.
Registering in Time
David Newville, senior program director for tax benefits at Code for America, estimated that up to 50,000 families may have registered in time to get six months’ worth of child tax credit payments next month.
But he clarified that not everyone who filed by the November 15 deadline will get the December 15 payment. “I think for most people, it’ll probably go through,” he told Newsweek. “But if there’s like an issue with the return or the IRS flags it, it may get held up and they may not get that payment in time.”
A Treasury spokesperson told Newsweek: “Returns are still being processed and we don’t have a final count right now. We want to emphasize that non-filer families that didn’t sign up by the deadline can still claim their full Child Tax Credit during next year’s tax season.”
Newville said Code for America launched the non-filer tool to ensure families eligible for the child tax credit are signed up to receive it.
“Some of the lowest income families, they don’t really interact with the tax system at all. They don’t earn much money so they’re not required to file a tax return,” he said.
Describing the credit as “transformational,” Newville added: “We’ve all seen the impact it’s had for families in a few short months already, in terms of lowering hunger and improving housing security, and health outcomes for children and for families. All those positive outcomes [have] quickly shown up along with the very rapid drop in poverty.”
The COVID-19 pandemic and unprecedented nationwide protests against racial inequity in 2020 shined a necessary light on the systemic racism embedded in our country’s policies and institutions. The Child Tax Credit is one striking example. From the time it was enacted in 1997 until this year, the Child Tax Credit, which was expressly intended to help struggling families, was not fully available to 50 percent of the Black children in this country (as compared to just 20 percent of white children) because their families’ incomes were too low. This statistic should stop us all in our tracks.
As Congress continues to debate one of the most significant pieces of legislation in our lifetimes — a nearly $2 trillion Build Back Better “reconciliation” bill that would expand childcare, health care, and education funding among so many other overdue structural supports to our economy — we need to push for an extension of the Child Tax Credit beyond 2022 and make it permanent.
This is a critical opportunity to not only create an infrastructure that supports historic, sustainable long-term economic growth but also helps close the racial wealth gap.
For the first time since its enactment, the Child Tax Credit included a temporary increase and refundability provision that made it fully available to families whose incomes are too low to owe any federal income tax and distributed those payments periodically, instead of just once per year during tax season. This change in policy helped prevent millions of families from slipping into poverty during the pandemic and allowed working parents to start building savings to offset future economic downturns.
Congress is now debating whether to make these temporary changes permanent, which researchers from Columbia University estimate would cut the child poverty rate for Black children by more than 50 percent and for all children by 45 percent. This would lift over 4 million children above the poverty line and provide significant long-term benefits for children’s academic progress, health, and future earnings as adults.
We are already seeing significant gains from the temporarily expanded Child Tax Credit. Within just the first month of the initial payment being issued, the number of households with children reporting that they did not have enough to eat dropped by 3.3 million or nearly one-third. By boosting household consumption of goods and services and spurring economic activity in local communities, the impact of the Child Tax Credit has extended far beyond households with children and those experiencing poverty.
An issue at the heart of the current debate in Congress — that making the expanded Child Tax Credit permanent could discourage parents from working — is unfounded. More than 400 economists recently signed a letter of support for making expanded availability permanent, explaining, “recent empirical studies suggest that the income provided through the program is unlikely to meaningfully reduce parental labor supply.” In fact, according to a new study by Humanity Forward, 94 percent of Child Tax Credit recipients said they planned to continue working or even pursue overtime opportunities since they would be able to afford child care and other child-rearing expenses. Similarly, the National Academy of Sciences projected that 99.5% of working parents receiving the Child Tax Credit would continue to work.
Beyond a poverty-fighting tool, the expanded Child Tax Credit has the power to set millions of Black families on an upward path toward long-term economic and social mobility. By making it permanently fully refundable at current levels — $3,600 per child for children under five and $3,000 per child for children between six and seventeen — the Child Tax Credit would generate an increase of $76 billion in children’s future earnings in adulthood and nearly $536 billion in increased benefits caused by children’s improved health outcomes. This kind of economic mobility benefits the entire national economy — the estimated $800 billion current and future value of this tax credit to society is roughly eight times the $100 billion initial cost. It is rare that any public policy achieves such a high return on investment.
We have a once-in-a-generation opportunity to lift over 4 million children out of poverty and shore up structural damage in the U.S. economy by correcting a provision in our tax code that has systemically prevented Black families from thriving for decades. Congress needs to make the fully refundable expanded Child Tax Credit permanent and continue to distribute those payments periodically. There should be no debate.
In addition to its ethical imperative, economist and writer Evelyn L. Forget also believes and argues persuasively that such programs make economic sense
Basic Income for Canadians: From the COVID-19 Emergency to Financial Security for All
Evelyn L. Forget | James Lorimer & Company Ltd. (Toronto, 2020)
$24.95 | 255 pp.
Economist Evelyn L. Forget has been thinking about the often contentious issue of guaranteed basic income for decades. An earlier version of this book was shortlisted for the prestigious Donner Prize in 2018-2019, and the current republication has been rewritten to take into account learnings from Canadian COVID-19 and CERB experiences.
Unlike many who pontificate about poverty policies, Forget has had some lived experience growing up poor. By the time she got to university in the 1970s, she knew she wanted to find a way to work for positive social change.
Studying economics under Ian McDonald at Glendon College in Toronto, she learned of Minicome, a bold, experimental program being conducted in Manitoba. She was impressed with the simple elegance of a redistributive program that reduced poverty by making more money available to poor people. What a concept!
“I have never understood,” she notes wryly, “why the same critics argue that giving money to poor people causes them to work less but giving money to rich people by cutting their taxes causes them to work more.”
The Manitoba Minicome experiment, which ran from 1975 to 1978, is only one of the many pilot projects and research efforts into guaranteed minimum income around the world that Forget describes and analyzes in this carefully written book. She introduces the reader to experiments conducted in the Netherlands, in Finland, at several locations in the U.S. and, perhaps most exotically, in Ontario. While each of these experiments differ in detail, some of the results are clear across the research literature.
Providing people at the bottom of the income ladder with a modest guaranteed income does not lead, despite the dire warnings of right-wing pundits, to orgies of sloth and dissipation. Most people who benefit from guaranteed basic income use it to feed their kids, cover unexpected expenses and provide a small margin of financial safety. Anyone who has read Wilkinson and Pickett’s classic study of the economic determinants of health The Spirit Level, will not be surprised that these studies show evidence for improved physical and mental health in recipients as their income goes up and is more predictable.
Forget clearly believes there are strong, ethical arguments in favour of these programs and would like to see Canada adopt a national guaranteed basic income. She also believes and argues persuasively that such programs make hard-nosed economic sense as well. Her case is strongly made.
Michael Tubbs had the odds stacked against him while growing up in Stockton, California, as the son of a young single mother and an incarcerated father.
Tubbs, 31, felt the expectations for his life as a Black man in America were either prison or death, he writes in his new memoir, “The Deeper the Roots.”
But Tubbs defied that grim future when he was accepted to Stanford University. After graduating, he returned to Stockton to serve as city council member. He upended expectations again when in 2017 he became the city’s first Black mayor and, at just 26, the youngest mayor ever of an American city.
While in office, Tubbs created a guaranteed income experiment that gave certain residents $500 per month, a program that has since been replicated in other American cities. He also worked to help make it possible for other students like him to achieve their college dreams.
In 2020, however, he lost his bid for re-election, a defeat he writes about in his new memoir.
CNBC.com caught up with Tubbs before he kicked off a virtual book tour featuring a Q&A with Oprah Winfrey, who published the memoir through her Flatiron Books imprint.
Lorie Konish: Your story begins with your mother saying, “Don’t tell nobody our business.” Why did you decide to write a book telling your story now?
Michael Tubbs: Growing up, so many memoirs really inspired me, particularly memoirs about the transition from adolescence to adulthood. I think of “Black Boy” by Richard Wright. I think of “Makes Me Wanna Holler” by Nathan McCall and others. The unique experiences I had growing up in Stockton, but also being the first Black mayor of a major city, of Stockton, being the youngest mayor of a big city ever, that’s just a unique perspective and experience that I felt was worth to capture while it was still fresh in my mind, while I was still living it.
LK: Your father was in jail while you were growing up, which was something you hid. Why?
MT: I was so embarrassed because I thought it would cause people to make judgments of me, or view everything I did through that prism. I was afraid of what if that was a prophecy for me and my contributions to society or how my life would be. I didn’t want anyone to make judgments of me or my family based off that.
LK: You talk about how coming up in the educational system, you encountered racism or condescending teachers. You defied expectations when you were accepted to Stanford University. How did that educational experience change your perspective?
MT: From elementary school up until I graduated high school, I just did not get along with a lot of my teachers. And all of them were not racists, but some absolutely were. The classroom didn’t feel safe for me. I felt that it was always a struggle or a fight. I felt that my teachers were trying to control me or bring me in line or put me in my place. I just really rejected all of that.
And it wasn’t until Stanford where the same things I would get in trouble for in high school, like really kicked out of class for, was the reason why I was a teacher’s pet, was the reason all of the professors wanted me to TA for them, was the reason why all of the professors wanted to be my mentor and write recommendations for me. They valued someone who was questioning, someone who was challenging, someone who was really excited about learning and wanted to debate ideas and discuss. That was the biggest surprise of Stanford, actually, was I didn’t get controlled in class, that I was the teacher’s pet. It was the exact opposite in high school or elementary school.
LK: As an intern in President Barack Obama’s White House, you found out that your cousin Donnell had been shot and killed in Stockton. What was that like, and how does Donnell’s death influence you today?
MT: That was very jarring. Just dealing with the pain, the anger, the grief, the feeling of helplessness, almost feeling nihilistic, and also doing so from a place of privilege, like being in the White House, and being at Stanford and having been at Google before that. And really thinking about how was anybody’s lives better because these things were happening for me? Or how is this helping anyone else? It really caused me to think, OK, what do I want to do in the world?
And that pain and that anger and that grief drove me to run for city council and it still drives the work I did and do now around gun violence reduction and creating safer communities and reducing homicides in communities like Stockton. It was so real and so visceral, and then realizing that the No. 1 cause of death in this country for young Black and Latino men between 14 and 25 isn’t cancer, isn’t Covid, it’s gun violence. It’s unacceptable, and I felt like I had to do something to try to change it.
LK: When running for city council, you had serendipitous run-ins with people like Oprah Winfrey and MC Hammer, who helped you financially. What was that like?
MT: It was so random in the best way. It was also confirmation that even though it was unlikely, even though it sounded like a crazy idea, that this was aligning with a greater purpose, that this was what I’m supposed to be doing. Because who can plan for that?
No one plans to run for office and have MC Hammer give them money for a city council race. It just reminded me that this was something bigger. It was bigger than me and bigger than this race. And it came at pivotal inflection points when I wanted to give up, when I felt like I didn’t have enough. I’m still in shock, amazed, surprised to this day, like 10 years later.
Michael Tubbs, pictured here as a 22-year-old Stanford University graduate, worked to change his hometown of Stockton, California as a city council member and then as mayor.
LK: Have you kept in touch with them?
MT: MC Hammer lives like 30 minutes away from Stockton. So we’ve had a couple dinners, we text, we did a Clubhouse conversation recently about basic income. I call him Uncle Hammer now.
Oprah, we hadn’t kept in touch until she picked up the book and said, “I want to publish it.” And we’re having a conversation about the book, which I’m excited about.
LK: You write about how happy your mother was on the last day she used a local check-cashing service. How did those services influence your family and the Stockton community?
MT: In some parts of Stockton, you’re going to find check-cashing places. Given the way paychecks work, you get paid the 15th and the 31st, but your bills are due the 12thor the 10th. To see my mom having to go to check-cashing places, not because she would never have the money, but because she didn’t have the exact amount the day it was due, and would need like two more days to wait for her pay check. That really gave me a passion for economic security and that’s where basic income comes from, and that’s where a lot of the work around financial inclusion comes from, is seeing how predatory and how terrible these institutions are in that they keep people in the cycle of debt and keep a rat race that’s very hard to pull out of.
LK: Did that contribute to the idea for the guaranteed income experiment?
MT: My belief in basic income came from thinking how would my mom use that money, how would that help my mom raise me and my brother.
LK: What lessons have you learned about guaranteed income now?
MT: That dignity has to be attached to humanity before it’s attached to work. What you dignify is inherent to who we are as people. That’s a big lesson. There’s this idea of time. Money is proxy for power and agency. And so the ability to own your time and decide what you want to do and how you want to do it is important. And that you can trust people. You can trust them to make decisions for themselves and their family.
LK: A big part of your efforts in the community have also been with education. Why has that been such an emphasis for you?
MT: It also comes from personal experience. I’ve seen how four years getting a master’s and bachelor’s at Stanford has really set me up to be doing the work I’m doing now. It opened up my horizons, opened up my mind, I met my wife. It also taught me critical thinking. It taught me how to challenge. It gave me a network of people of support to draw from. And it’s empowered me to go back to my community. And to think about the potential of education and critical thinking to really create the changes we need to see in our local communities, in our state and in our nation.
LK: What would you like your legacy of your time as Stockton’s mayor to be?
MT: I want my legacy as Stockton’s mayor to be a mayor who wasn’t afraid of hard things, who believed that the city belonged to all people and who changed Stockton’s perception from a city with problems to a city where there’s solutions.
LK: Now you’re planning to launch an anti-poverty project?
MT: It’s an anti-poverty initiative called End Poverty in California, and it’s really about really sort of using all the tools at our disposal, from media to policy to art to research to piloting to really elevate the issue of poverty as a top issue for Californians to solve and really muster the political will to solve it. In January, we’re rolling out with a policy paper, because I’m a policy nerd, and then we have some other stuff in the works.
LK: Why California specifically?
MT: California is the Golden State. It has so much wealth, so much opportunity, but it also has the highest poverty rate in the country. It just seems antithetical to our values as a state. And as California goes, so goes the nation. It’s hard, as we’ve seen, to move things on a national level. As a state, we can organize and actually get things done.
LK: How did this idea come about?
MT: I’ve always been obsessed with ending poverty, and that’s kind of where some of the guaranteed income work comes as well. When I lost the election, it was like what do you want to do? I still want to work on this issue. This issue is still that important. It’s worth losing for. It’s worth trying again for.
LK: What are the moments that have offered you the most satisfaction?
MT: The fact that we have 60 mayors signed up to be part of Mayors for a Guaranteed Income. When I started, it was just me. There was one mayor for guaranteed income in this country, and now there’s 60. I am incredibly proud of all of the kids who are in the Stockton Scholars program, who are getting scholarships for four years or two years or trade school, who speak so beautifully about their community and ways to come back and ways to serve and continue the work that was started. My two kids, they get up every day and are hopeful, excited, laughing and growing. All of those give me hope.
About 80 people marched to the offices of the National Treasury in Pretoria on Thursday, protesting against the budget announcements last week and calling for a Basic Income Grant, an increase in the Covid-19 Social Relief of Distress grant and its extension beyond March 2022.
The march was led by activists from #PayTheGrants, Fight Inequality Alliance and Gauteng Housing Crisis Committee. They held placards which read, “Austerity – the pandemic of the poor”, “Towards a BIG Basic Income Guarantee of R1,500”, “#Austerity kills” and “Extend the SRD grant.”
They complained that Finance Minister Enoch Godongwana had not discussed increasing the Covid-19 SRD grant from R350 a month in his Medium Term Budget Policy Statement on 11 November. They want the grant increased in line with the current Food Poverty Line of R624 per person per month.
In a memorandum handed to Lutendo Ramalebana of the National Treasury, the activists demanded that the minister “abandon the present path of budget cuts, recognise the Covid SRD grant as a necessary interim solution and commit to a fair and open process for debating and developing income support policy.”
Addressing the group before handing over the memorandum, General Moyo, Gauteng coordinator of Fight Inequality Alliance, said the minister should consider a Basic Income Guarantee of R1,500 a month.
“The R1,500 is a start. Essential things such as petrol, paraffin, and transport increase every year, but not our grants,” said Moyo.
In a statement, the civil society organisations said, “The Medium-Term Budget Policy Speech delivered yet further promises of austerity. Promises we expected, but cannot accept. Without genuine opposition, the National Treasury will continue to push our people into destitution in the name of ‘fiscal consolidation’.”
Melita Ngcobo from shack dweller movement Abahlali BaseMjondolo said because of Covid-19, many people had lost jobs and could not buy food. “We have the right to healthy food. We have the right to land. We don’t have places to stay.” Thwala Lucky of the Sisonke Revolutionary Movement said they were tired of corruption and looting in the government, with the rich getting richer and the poor poorer.
YOUTH living in Windhoek’s 8ste Laan informal settlement are demanding a basic income grant (BIG), while accusing the nation’s leaders of intentionally keeping the country in an enforced state of poverty since independence.
Christa Nekwaya (20), who was speaking at a BIG Coalition media conference today in Otjomuise, accused Namibia’s three presidents of being the engineers of poverty in the country.
Another speaker, Kevin Wessels (25), said the government should be held accountable for the low employment rate and poverty in the country.
“The BIG can help improve the lives of the youth. The N$750 we got from the government as Covid-19 relief funds last year has proven that it can help alleviate and reduce poverty,” Wessels said.
He added that the youth are told to create opportunities for themselves, but are expected to do so without funds.
“We are demanding a basic income grant. We are telling the president that the 42 000 people he wants to give the BIG to is nonsense. How do you determine that only 42 000 people are going to get it? That is where you create inequality,” Wessels said.
Josephina Nekwaya (21) said the majority of the country lives in poverty, which has exacerbated unemployment.
“Our supposed freedom only exists on paper but not in practice because we, the majority, which is 1.6 million Namibians, live in our own country as impoverished slaves and are struggling to survive while being lied to that Namibia is doing well,” she said.
WASHINGTON ― Rising prices have crushed consumer sentiment and become a major political story as President Joe Biden struggles to enact the broad social policy agenda that helped him win the White House last year.
But inflation is actually just one of several big economic stories happening right now. There has also been a big reduction in child poverty ― and Congress could make it permanent.
Since July, the reduction in family poverty has been mostly sustained by monthly payments worth as much as $300 per child. The payments have lifted between 3 and 4 million children above the poverty line each month.
“The sheer magnitude of just that number is not what we normally see on a regular basis, especially from a single policy,” Megan Curran, director of policy at Columbia’s Center on Poverty, said in an interview.
Democrats are planning to continue the payments through next year as part of the Build Back Better social spending bill that they hope to pass in the coming weeks. If Democrats succeed in entrenching the policy, it would represent a dramatic shift for the American welfare state in favor of families.
One of Democrats’ biggest obstacles is inflation, with news that prices rose 6.2% since last October prompting fresh warnings from Republicans and even some Democrats that Build Back Better is a bad idea.
“From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day,” Sen. Joe Manchin (D-W.Va.), a pivotal Senate vote, said in a tweet last week.
Higher prices weaken the spending power of every paycheck, but for most families with children, the monthly child tax credit payments more than make up for that erosion. In October, Moody’s Analytics estimated that for households earning the U.S. median income of about $70,000 a year, higher inflation costs them $175 a month. The child payments are worth $300 for each kid under 6 years old and $250 for kids under 18; that money comes on top of wage growth that is already outpacing inflation for lower-income households.
In Washington, reducing poverty means pushing family incomes above an arbitrary threshold corresponding to the number of people in the household. For the actual people affected the extra money can be a lifesaver; low-income families report using the child payments mostly for necessities like food, clothing and shelter. Monthly survey data from the U.S. Census has also foundthat households with children reported notable declines in difficulty obtaining food and meeting basic expenses before and after child payments went out, changes that were absent in households without children. Research suggeststhat people who grow up poor tend to earn less money, have worse health outcomes and a higher likelihood of winding up in trouble with the law.
In short, the new child tax credit payments are cutting down on real human misery by partially making up for the labor market’s indifference to parents, who have more expenses and less flexibility to work at whatever jobs might be available.
Sen. Sherrod Brown (D-Ohio) listens during a business meeting with the Senate Committee on Veteran Affairs on Capitol Hill on Oct. 20 in Washington, D.C.
Sen. Sherrod Brown (D-Ohio) said the new policy isn’t getting its due in the national conversation about the economy.
“We don’t talk about it enough, and, not to tell you what to do, but you guys don’t cover it enough,” Brown said, referring to the press. “The discussion is, ‘Democrats can’t pass these next two bills,’ instead of the discussion being, ‘Look what the child tax credit has done.’”
Brown said that “90% of families in my state who have kids under 18 have gotten at least a $3,000 a year tax cut. And that should be said over and over and over.”
Ally Rykiel has received $550 per month since July for her two kids age 5 and 11. She had another baby in October, though she has not yet been able to update her family’s information with the IRS to get another $300 for the new child.
Rykiel, 33, said her family hasn’t particularly noticed inflation, partly because she and her husband don’t drive, partly because they recently moved to Richland, Washington, to be with her family, and partly because they shop for food at different grocery stores and are used to finding different prices for similar goods.
Still, the cost of food has been a burden ― especially after her husband took off four weeks from work to help with the baby and received no pay from his employer. The child tax credit has been helpful.
“If we didn’t have that, we would have had nothing,” Rykiel said. “Counting on that $550 in the middle of the month has been huge. We just expect it now.”
The child benefit policy might not deliver to the fullest extent Democrats said it would. It was supposed to slash poverty by 40% annually, but because they structured the payments as advance refunds of the child tax credit, and because low-income households aren’t required to file federal tax returns, the Internal Revenue Service has been unable to reach millions of eligible households. As a result, the poverty reduction from the child tax credit has ranged between 25% and 29% each month since July, according to estimates from Columbia’s Center on Poverty and Social Policy.
The federal government determines the official poverty rate on an annual basis; the center produces its monthly poverty estimates by comparing household budgets to a poverty threshold one-twelfth the size of the annual one. For a two-parent, two-child household, that monthly poverty line is about $2,300 per month. If Democrats continue the benefits through next year as planned, the monthly poverty reduction could translate to a similar annual impact, at least according to the federal government’s supplemental poverty measure that accounts for cash payments from the IRS.
A political problem for the child tax credit is that because economists say inflation has been caused partly by increased consumer spending colliding with supply problems ― with the increased consumer demand resulting partly from Congress giving everyone more money ― Republicans can skewer the child tax credit as just another thing causing inflation, rather than something that mitigates its impact for most households.
“The economy has an inflationary problem ― this makes it worse,” Sen. Lindsey Graham (R-S.C.) told HuffPost earlier this month, referring to the child tax credit. “The more you expand government, the more money you put in the system, the more inflation you’re gonna have. Now’s not the time to do these policies.”
The cash payments do boost aggregate demand, said economist Dean Baker, co-founder of the Center for Economic and Policy Research, but to such a small extent that it shouldn’t contribute much to inflation. Baker has argued that the burst of inflation this year will likely wane as companies resolve supply chain problems and increased demand for durable goods subsides.
“I see this as a story where people are actually doing pretty well with higher pay and many getting the CTC, but they are hearing about inflation in the media 24-7, so they think the economy is going to hell,” Baker said in an email.
Many people do think the economy is going to hell, with consumer sentiment falling to its lowest level in a decade in November, according to the University of Michigan’s surveys of consumers. And people’s moods could be consequential for what happens with inflation, because if consumers expect higher prices and in return demand higher wages, a self-perpetuating cycle could develop. The University of Michigan’s Richard Curtin said his consumer surveys show people believing their own income gains will be wiped out if inflation continues.
“Nominal income gains were widely reported but when asked about inflation-adjusted gains, half of all families anticipated reduced real incomes next year,” Curtin wrote. “The reactions of consumers to surging inflation should be no surprise, as it has been reported during the past several months.”
SEOUL — Universal basic income, which has been gaining buzz on the fringes of mainstream economic thought, has become a central pillar in the platform of a South Korean presidential candidate.
Should Lee Jae-myung, the ruling Democratic Party’s pick, come from behind in the polls to win in March, South Korea could become the world’s first major economy to adopt a version of UBI.
The lawyer-turned-politician is pledging to hand out 1 million won ($840) to every citizen and 2 million won to 19- to 29-year-olds. The annual payments would begin in 2024. The plan has ignited debate over how best to distribute wealth in a country suffering from a widening gap between haves and have-nots.
“The Republic of Korea is now an advanced economic nation,” Lee said in his acceptance speech last month. “On top of increasing national wealth, we should guarantee people’s basic livelihoods. I will make [South Korea] the first country in the world to pay universal basic income, guaranteeing basic livelihoods with basic housing and basic finance.”
Universal income has been suggested and tested in many countries. In a landmark experiment, Finland in 2017 gave 560 euros ($642) a month to 2,000 randomly chosen unemployed people for two years. Andrew Yang — an entrepreneur who ran for the Democratic nomination for president in the last U.S. election cycle — advocated monthly $1,000 checks for all Americans. In Japan, Nippon Ishin no Kai (Japan Innovation Party), wants to consolidate much of the country’s social welfare system into a UBI program.
Lee’s plan has the potential to shake up Asia’s fourth-largest economy, one that has adopted a version of capitalism that has many of the country’s 51.7 million surviving on the margins.
Lee Jae-myung campaigns in Seoul on Oct. 10 on his way to winning the ruling Democratic Party’s nomination
South Korea’s growing wealth gap is driving the UBI debate. Disposable income for the top 20% was 5.59 times higher than that for the bottom 20% in the second quarter, according to Statistics Korea. A year earlier it was 5.03 times. The country had a Gini coefficient (0 = complete equality, 1 = complete inequality) of 0.345 in 2018, making it more unequal than neighbor Japan (0.334), according to the OECD.
There are concerns that the gap will widen in the medium- to long-term, as advancements in artificial intelligence and other technologies eliminate manual labor positions.
South Korea is an industrial powerhouse with major companies such as Samsung Electronics and Hyundai Motor. But it is also where college graduates struggle to find quality jobs and where many elderly collect cardboard in the street to make ends meet.
Lee, 56, knows the margins. He was born into a poor family in Andong, North Gyeongsang Province. After graduating from elementary school, he worked at baseball glove and watch factories in Seongnam, Gyeonggi Province, while studying for his middle school and high school diplomas. He went on to read law at Chung-Ang University in Seoul, passing the bar in 1986.
He built his political career by paying “youth dividends” of 250,000 won per quarter to 24-year-old Seongnam residents when he was the city’s mayor. He went on to adopt the program in Gyeonggi Province, the country’s most populous, after becoming governor in 2018.
Lee’s UBI would be distributed in the form of a regional currency, an experiment Gyeonggi Province has already tested with coronavirus-linked assistance. Each resident last year received 100,000 won worth of a regional currency but had to spend it within three months so as to hasten the circulation of money in the local economy.
On top of the national plan, Lee has touted basic housing and basic finance programs. The public housing plan would provide 1 million low-rent houses where residents can stay for up to 30 years. The finance plan would enable any resident to borrow 10 million won at a low-interest rate.
Young people who have benefited from Lee’s basic income in Seongnam and Gyeonggi Province have welcomed his national plan, saying the money has helped them enjoy some previously unaffordable luxuries.
A 24-year-old college student in Seongnam said Lee’s youth dividends allowed her to have a family photo taken in a professional studio for the first time.
“It also eased my burden to get nail care and buy clothes,” said the student, who asked to be identified as N, in an interview with Korea Labour & Society Institute. “It would be better if I get more, but I know that it is not a realistic idea.”
The unemployment rate for young people in South Korea is far higher than it is for the rest of the population.
Whether the government can afford to make good on Lee’s annual payments is a major issue. South Korea’s sovereign debt has increased sharply under the Moon Jae-in administration. The International Monetary Fund last month said the country’s general government net debt-to-GDP ratio is expected to reach 20.9% this year, up from 9.6% in 2017. The IMF forecasts that the ratio will increase to 36.3% in 2026, marking the fastest pace among 32 advanced economies.
Park Cyn-young, an economist at the Asia Development Bank, said the UBI would help gig economy workers but dig a hole in the government’s finances.
“Providing this UBI as cash transfers is quite comforting for many people,” Park said. “As we go more digital and move to a gig economy you are likely to have less employment tied [to] social protection. The full shift to UBI is going to be very costly. There can also be considerations like having a quasi UBI, which can be a bit more targeted [toward the most] vulnerable groups.”
Private sector financial institutions also see UBI programs on the horizon. Japan’s Nomura said earlier this month the pandemic has pushed governments to focus on redistributive policies.
“Increased appreciation for front-line service sector workers [cleaners, delivery people] will likely sharpen the focus on how the benefits of growth are and should be shared between labor and capital, with an increasing focus on minimum wages and minimum working conditions,” Nomura said in a report. “We could even see some progress towards universal basic income type policies in some countries.”
Political opponents and some economists slur Lee as a populist.
“I am afraid that Lee may spend too much money on the universal basic income program if he becomes president, hurting the country’s fiscal soundness seriously,” said a senior economist at a foreign investment bank, who asked not to be named.
Yoon Seok-youl on Nov. 5 was named the presidential candidate of the main opposition conservative People Power Party. More than 10 percentage points ahead of Lee in several opinion polls, he did not hold back on attacking Lee in his acceptance speech.
“This presidential election is a battle between Yoon Seok-youl with common sense and Lee Jae-myung with nonsense,” he said. “It is a battle between a rationalist and a populist.”
Yoon last month said universal basic income does not make sense, without elaborating.
A woman walks on a street in Guryong village near the Gangnam district on Nov. 24, 2020. Just steps away from the glitzy area, some residents survive by scavenging bottles.
The national government remains wary of the idea. “Our priority right now is overcoming the coronavirus crisis, and the debate on basic income can wait,” Finance Minister Hong Nam-ki said last year. He has since avoided the topic.
The public also appears worried. In a poll conducted by Mono Research last month, 65.1% of respondents said they oppose the program, with 34.9% supporting it. Those against the plan fear it might create moral hazards and hurt the country’s financial stability.
A Finnish government agency found that the country’s experiment had small employment effects, but provided better perceived economic security and mental wellbeing. McKinsey wrote in a report that “a critical lesson of the Finnish experiment is the complexity of implementing a basic income. Policy makers need to decide how it should interact with a large number of other policies, such as child benefits, housing benefits, pensions, health insurance, and taxation.”
Universal basic income may be the only meaningful policy debate ahead of the election, as the candidates appear more focused on slinging mud, bringing up scandals and spotlighting the negative.
Should he win, Lee appears determined to push through with his plan and is looking at ways to finance the program.
“For the universal basic income program, which pays all citizens equally, I think we need to create new revenue streams,” Lee told senior local journalists last week. “What I am considering is to impose taxes on carbon emissions and land ownership.”
You hear a lot about how high tax rates discourage rich people from working. You hear less about the same problem at the bottom of the income ladder, where the perverse incentives are far worse.
If low-income workers increase their paychecks too much, they can lose means-tested government benefits such as housing vouchers and food stamps. They fall off the “benefits cliff” and their overall resources decline. That may not fit the definition of a confiscatory tax, but it definitely discourages people from working more hours or for higher pay.
This chart shows an example, using an online tool created by the Atlanta Fed, for a fictitious 25-year-old single mother of two children, ages 3 and 5, who is working full time and living in Springfield, Mass. Her family receives food assistance, Medicaid for herself and her children, housing subsidies and several tax credits. When her net resources are below zero, she must borrow or spend less than the assumed minimum. When her net resources are positive she has some discretionary income. She is deciding whether to switch to a higher-paying career in health care. The landscape she faces is daunting.
The problem of the benefits cliff — or really cliffs, since they appear at different income levels — has been known and studied for decades. Recently the search for solutions has intensified, as I found out when speaking to Raphael Bostic, president of the Federal Reserve Bank of Atlanta, in August. The challenge is that one way to eliminate the benefits cliff is cruel and another way is costly. The cruel way is to get rid of benefits to the poor so they don’t lose anything when they work more. The costly way is to stop phasing out benefits as people earn more, which means giving money even to the middle and upper classes, which would be similar to a universal basic income.
Social workers who counsel low-income workers often try to help them get past the pain of the benefits cliff by encouraging them to keep their eyes on the prize: a level of income high enough that the loss of government benefits is a worthwhile trade-off. People who feel trapped by dependence on government benefits need moral support as well as financial support to get on a path to self-sufficiency, says Richard Barr, vice president for strategic and organizational development at the South Carolina Center for Fathers and Families. “We want to be tour guides,” he says, “not travel agents.” For people about to take a job that will threaten their benefits, “The fear factor is difficult to overcome: ‘Can I do it? Will they accept me? Will I stick and stay?’”
A complementary strategy is to provide financial assistance during the transition to better-paying work, so that families’ resources decline less or not at all. There are dozens of such programs in the federal and state governments, some of which include incentives to save or to prepare for higher-paying work. The U.S. Department of Housing and Urban Development’s Family Self-Sufficiency program, offered through public housing agencies, gets the incentives right: For families that opt in, when their rent increases because their earnings rise, the housing authority contributes the difference to an escrow account that becomes available to them when they “graduate” from the program and are off assistance. Congress created the program in 1990 at the request of President George H.W. Bush and Jack Kemp, who was the secretary of housing and urban development.
The benefits cliff not only discourages work; it also creates incentives for dishonesty. Residents hide income. Housing managers learn to look the other way. It doesn’t have to be this way. David A. Smith, founder of the Affordable Housing Institute in Boston, says that until 1969 HUD didn’t raise rents on tenants when their incomes went up.
There are many other solutions on offer. A slew of state initiatives aimed at fixing the benefits cliff are listed on a website called benefitscliff.com, which was created by the nonprofit Leap Fund. The Atlanta Fed highlighted several interesting efforts in the Southeast in a conference that it co-sponsored last year.
One person I interviewed for this newsletter was Anne Kandilis, director of Springfield WORKS/Western Massachusetts Economic Development Council. She’s supporting a state bill that would experiment with redirecting the state’s earned-income tax credit to counteract the fall from the benefits cliff, topping up families’ resources so they don’t decline when adults in the household increase their earnings. “We’ve made it really simple,” she said. “We just want to plug a gap.”
Plugging gaps is a great idea, but it’s not enough. If all you do is keep people at the same level of resources when their income rises, meaning they keep none of the extra money they earn, they’re facing an effective marginal “tax rate” of 100 percent. They’re stuck on a plateau. (Contrast that with the current top federal tax rate of 37 percent.)
A plateau is better than a cliff, but it still severely discourages work, says Alexander Ruder, an organizer of the Atlanta Fed’s conference who is a principal adviser on the bank’s community and economic development team.
Ruder mentions another big problem: If you’re a low-paid nursing assistant who’s receiving government benefits, work-force-development people might encourage you to train to become a licensed practical nurse, the next rung on that career ladder. But a licensed practical nurse without benefits may wind up with fewer resources than a nursing assistant with benefits. For many people, the benefits cliff effectively yanks away the career ladder that is presented as the way out of poverty. One answer is to train to become a registered nurse, which is a better-paying job than licensed practical nurse, but that’s more ambition than many people can realistically handle.
Barr, of the South Carolina Center for Fathers and Families, says one way to avoid the poverty trap created by the benefits cliff is earlier intervention: Teach teenagers about their career options so they can get the training and education they need before they have children to take care of. “When you put on weight it’s hard to use wings,” he told me. “Fly while you can.”
TOKYO, Nov 5 (Reuters) – Japan will spend roughly 2 trillion yen ($18 billion) on cash payments to households with children under the age of 18 as part of an economic stimulus plan aimed at blunting the impact of the COVID-19 pandemic, the Yomiuri newspaper reported on Friday.
Under the plan, households with be entitled to receive 100,000 yen per child regardless of household income around spring next year, the paper said without citing sources.
The government will tap its reserves in state coffers to fund the cash payouts, the paper said, suggesting the plan will not lead to a huge issuance of government debt.
New Prime Minister Fumio Kishida’s administration is also considering offering cash payouts to low-income households and temporary workers, the paper said, adding that details were being worked out by the ruling party.
“Compared with the previous blanket payout covering all households, more of the money could be funnelled into consumer spending this time because it targets those in need of cash,” said Masato Koike, senior economist at Dai-ichi Life Research Institute.
Kishida has promised to compile a large-scale stimulus package this month and the government is aiming for it to be passed by parliament by the end of this year. Kishida has, however, offered few clues on potential size of the spending and the amount of additional debt issuance.
“The prime minister has repeatedly said the administration is ready to offer payouts to those suffering from the pandemic. Discussions will proceed based on this understanding,” Economy Minister Daishiro Yamagiwa told reporters on Friday when asked about Yomiuri’s report.
The idea of offering cash to households with children was a campaign pledge from Komeito, a coalition partner of Kishida’s Liberal Democratic Party, made ahead of the Oct. 31 general election. It differs somewhat from Kishida’s call for targeted payouts to those in most need of help.
