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Category: THE SOCIAL DEBATE

  • Taiwan holds first online basic income summit

    by Tyler Prochazka

    After over a year of avoiding significant local COVID outbreaks, Taiwan experienced a scare in May with hundreds of cases emerging. This brought the idea of universal cash payments to the forefront of Taiwan’s political debate as millions of jobs were destabilized overnight.

    With this backdrop, UBI Taiwan held its first-ever online basic income summit on August 15, inviting professors, activists, and politicians from around the world to discuss the state of basic income during the COVID pandemic.

    Korea’s Gyeonggi Province Governor Lee Jae-myung opened the summit by noting the importance of the basic income movement in Korea and Taiwan. Lee is currently a frontrunner in the early stages of Korea’s presidential race. He has been called the “Bernie Sanders of Korea” because of his economic proposals.

    “When the world is implementing expansive fiscal policy, basic income is gaining attention as the most rational and remarkable way to prepare for the era of the fourth industrial revolution,” Lee said in his address to the conference.

    As the former mayor of Seongnam, Lee started a youth basic income program for all 24-year-old youth in the city to receive local currency every quarter. The scheme was shown to improve small business activity in the region. He later expanded the program to the province when he became governor.

    Kim Kyeong Soo is part of the Gyeonggi provincial government vision planner. He is the planner of the provincial youth basic income program.

    “What we are doing at our expense is to realize the basic social rights of young people,” Kim said in an interview for the conference.

    This was a useful model during the COVID crisis because the provincial government was able to quickly expand the program to include all residents of the province during the economic downturn.

    Kim also discussed how they increased a myriad of programs during the COVID pandemic and the plans to push for basic income on a nationwide scale.

    “We designed it so that it could only be used in stores with annual sales of 1.2 billion won or less, so that the money could be actually revitalized for the small business owners of the real alley economy,” Kim said.

    Members of the Basic Income Korea Network Mok Hwakyun and Kim Jae-seop attended the summit for the question-and-answer session. They noted how basic income has become a mainstream topic in Korea.

    “The biggest change is that everyone knows about basic income now,” Mok said. “I hope Korea will be the first country” to implement UBI.

    Prominent US activist Scott Santens gave a pre-recorded interview for the conference where he discussed the success and failures of America’s massive COVID relief program. One of the biggest changes that has emerged is the Child Tax Credit, which Santens said he believes will get more people on board with a wider basic income safety net.  

    “I feel hopeful that especially the monthly CTC is going to really change things here and help build momentum for a full UBI here in the US,” Santens said.

    Taiwan’s Yangming University Professor Song-Lih Huang discussed the debate between Universal Basic Services compared to basic income. He concluded that UBS does not provide the same level of individual freedom as UBI.

    UBI Taiwan Chairman Tyler Prochazka evaluated Taiwan’s COVID relief response and noted the inadequacy and complexity of receiving relief.

    The situation became more severe this past May when a local outbreak caused Taiwan to go into level 3 lockdown for the first time during the pandemic.

    Taiwan is experiencing a bizarre contradiction, where record economic growth is fueled by its strong export sector despite the lockdown for other industries. At the same time, the lockdown has caused Taiwan’s employees to experience their worst economic situation in decades, particularly for the service industry.

    As a result of the lockdown, half of Taiwanese experienced wage reductions of 10 to 50 percent, and 74 percent reported some reduction in wages. At the same time, 41 percent said they believed the government’s COVID relief program provided no help. One issue with the relief program is it relies on extensive documentation to prove an individual’s circumstance and can also reject an applicant if a household member has too much money in the bank.

    For example, Taiwan’s unemployment had reached 570,000 people and the number experiencing lower than normal working hours had reached nearly one million during the lockdown. However, only 20,000 people were added to unemployment benefits during June which is less than one-fourth of the increased unemployment for that period.  

    Level two lockdown has been extended until September 6 in Taiwan, which places varying levels of restrictions on how businesses operate and closes some businesses entirely, such as certain entertainment venues. Even as much of the country returns to normal, many businesses will likely experience continued restrictions on their operations as well as reduced demand for the foreseeable future.

    Despite one of the worst employment situations in decades for Taiwan, the government has only allocated around 6 percent of its annual GDP on COVID relief this year. Compared to Japan and the United States, which spent between 16 to 30 percent of their GDPs on COVID relief, Taiwan has given significantly less to its citizens as a developed economy.

    Taiwan’s ruling party Democratic Progressive Party is moving toward another round of stimulus coupons worth 5,000 NT ($180 USD). Due to the stringent conditions associated with COVID relief programs, the universal coupons are the most accessible program from the government’s COVID response for many families. There has been a strong push by opposition parties in Taiwan to provide cash relief now for most Taiwanese instead of coupons and use the administrative savings to give an additional cash boost to poor households.

    “Taiwan’s ruling party said they want to ‘share economic growth’ with all Taiwanese,” Prochazka said. “The real way to share economic growth is with Universal Basic Income.”

    ___________________________________

    Article originally published on Basicincome.org: https://basicincome.org/news/2021/08/taiwan-holds-first-online-basic-income-summit/

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  • A Proposal to Transform SNAP Into UBI

    The government could give all Americans benefits that enable them to purchase what they need for a balanced diet. And I have modeled three different ways this new approach might be implemented.

    By: CRAIG GUNDERSEN

    The U.S. Department of Agriculture is set to permanently increase the value of Supplemental Nutrition Assistance Program benefits by 25% above pre-pandemic levels in October 2021.

    It’s the biggest change since 1979 to this anti-hunger program, commonly known as SNAP, which currently helps over 40 million Americans.

    Eliminating food insecurity in the U.S., as I suggested in a recent paper, would require a larger expansion in both benefit levels and eligibility.

    I’m a scholar who analyzes the causes and consequences of food insecurity, the technical term for when people can’t obtain the food they need for a balanced diet. I believe ramping up SNAP is sure to reduce the number of Americans experiencing food insecurity– a projected 45 million in 2020.

    Previous research I conducted with other experts suggests that the planned increase, from US$121 to $157 per person for a family of four, could cut food insecurity among SNAP recipients by 50%.

    What’s more, prior modeling indicates that in 79% of U.S. counties, people enrolled in SNAP will be able to purchase what they need to eat a balanced diet – a vast improvement. Previously, this was the case in only 4% of counties.

    This increase in SNAP benefits would still not lead to a food-secure diet in many places because of high local food prices.

    At the same time, there are more steps the government can take to end U.S. food insecurity.

    Modeling a more expansive approach to SNAP

    The government is making this change by evaluating and updating the U.S. Department of Agriculture’s Thrifty Food Plan, which estimates what a family of four needs to buy the groceries required for a balanced diet. This calculation, in turn, guides how the government sets benefits.

    Currently, there are three groups of Americans experiencing food insecurity: SNAP recipients who need higher benefits to get all the food they need, people who are eligible for SNAP but aren’t currently enrolled in the program, and people who don’t meet its requirements.

    The planned boost in benefits will make a difference for those already getting benefits. And it could help entice people who have not yet enrolled in the program to do so because higher benefits might make them less hesitant to deal with the paperwork and more willing to experience the stigma associated with enrolling in the program. Eliminating food insecurity in the U.S., as I suggested in a recent paper, would require a larger expansion in both benefit levels and eligibility.

    A universal basic income approach to SNAP

    I’m proposing that SNAP be reconfigured as a universal basic income program. That is, the government could give all Americans benefits that enable them to purchase what they need for a balanced diet. And I have modeled three different ways this new approach might be implemented.

    The first model would entail giving everyone the same benefit, regardless of their income. I calculated that giving everyone the maximum SNAP benefit level per month – $680 for a family of four in 2020 – would reduce food insecurity by 89% and cost $730 billion a year. This is almost 10 times higher than current spending levels.

    However, there are about 200 million Americans who do not run much or any risk of food insecurity. So I also modeled what would happen if the government only gave SNAP benefits to households with incomes up to 400% of the poverty line – roughly $100,000 for a family of four.

    I estimate that giving these people, about 55% of all Americans, the maximum SNAP benefit every month would reduce food insecurity by 89% and cost $409 billion.

    One problem with those two models is that the impact on food insecurity for the people who already participate in SNAP is limited, and that seems contrary to the point of expanding this social safety net program. One way to correct for this is to also increase SNAP benefits from the current rate by $42 per week – the average extra amount of money the program’s participants need to no longer experience food insecurity. This would be slightly larger, on average, than the upcoming increase in SNAP benefits.

    With both of these adjustments in place, my modeling shows that it would cost the government a total of $564 billion to take a much more expansive approach to SNAP. Despite this being less expensive than a full-fledged universal basic income approach for SNAP, it would usher in a steeper decline in food insecurity – reducing it by an estimated 98%.

    In other words, it would nearly eliminate food insecurity in the U.S.

    ____________________________________________

    About the Author: CRAIG GUNDERSEN is a Professor of Economics at Baylor University.

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  • Call for Universal Basic Income to end ‘toxic’ thinking around poverty

    Actor Greg Wise has said it is time to end “toxic Victorian thinking” about the “undeserving” poor and introduce Universal Basic Income.

    By: Judith Duffy

    The TV and film star was one of the speakers who addressed a major online conference organised from ­Glasgow last week, which brought ­together experts from around the world to discuss the idea of ­governments guaranteeing a regular minimum income to every citizen.

    In a recorded message to the ­Basic ­Income Earth Network ­Congress, Wise, who is appearing in this year’s Strictly Come Dancing, said he ­enjoyed financial security today thanks to fortunate circumstances.

    But he said: “Should accident of birth and luck be the only means not to live a precarious life? “A society is judged by how it deals with its least fortunate members – at least, that is how it should be. So how are we faring?

    “Not terribly well. Even pre-pandemic we were seeing a rise in ­childhood hunger, the fast ­disappearing secure band of society, the huge gap between most of us and the few super-rich.”

    Wise argued that “Victorian thinking” about the ethics of the workhouse and the undeserving poor were still ingrained in society in the UK.

    He said an example was his wife, the Oscar winning actress Emma Thompson, appearing on a radio show in which the presenter put ­forward the idea that childhood ­hunger was a ­result of the ­“fecklessness” of parents.

    He said: “Maybe now with the ­furlough scheme having been seen as essential, we can look again at ­Universal Basic Income through a ­different lens, taking whatever toxic Victorian view that we have carried with us and see money given out from the state in a healthier way.”

    He added: “Let’s give it a go, let’s try a Universal Basic Income and ­allow everyone the ability to at least in a small way feel they have some power to navigate, some sense of protection and availability to think beyond just struggling to the end of each month and try and access that principle ­human right – happiness.”

    Scotland has looked at the feasibility of piloting Citizen’s Basic Income, concluding it would be desirable but the powers to run such a scheme lie with Westminster. Last week the Scottish Government announced plans to start work on a minimum ­income guarantee, which is targeted at those on lower incomes.

    First Minister Nicola Sturgeon also addressed the conference in a video message, saying the gathering was an opportunity to “make the case” how Universal Basic Income can help ­create fairer and more equal societies for the future.

    She added: “That won’t be an easy task, but the past 18 months have shown us that things that can seem difficult or even impossible can ­indeed be implemented when we have the will, the imagination and the ambition.”

    Experts from around the world shared research and experiences of Universal Basic Income at the gathering, which concluded yesterday.

    Simone Cecchini, of the United ­Nations Economic Commission for Latin America and the ­Caribbean, said many countries in the region had introduced an emergency ­basic ­income as a response to the pandemic.

    He said extending this into a full Universal Basic Income would be ­costly, but said it could be done gradually by initially targeting groups such as children, to prevent a “lost generation” as a result of the impact of ­Covid.

    “We think the medium and long-term policy goal is to implement a universal basic income,” he said.

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  • In Florida, DeSantis cut jobless aid just as virus began terrifying new wave

    Unemployed residents struggling to survive on low state benefits are a preview of what could come nationwide as federal pandemic aid programs expire

    By: Yeganeh Torbati

    By June, Meli Feliciano’s family appeared to have finally found a measure of stability after being jolted by the economic devastation of the coronavirus pandemic. Her husband had secured a good job in construction, and she was receiving hundreds of dollars in weekly federal and state unemployment aid, giving her some breathing roomwhile she submitted job applications each week. She kept records of it all in a pink binder that her daughter had once used in kindergarten.

    That’s when calamity struck.

    Her husband fell ill, temporarily wiping out his income. Florida Gov. Ron DeSantis (R) slashed her jobless aid by more than half to $197 per week, arguing that the federal boost to unemployment insurance was keeping people like Feliciano from getting back to work. The bill for her daughter’s college tuition and textbooks is due soon, nearly $1,000 that the family doesn’t have. And just as her husband was cleared to go back to work in August, her stepson Julian tested positive for the coronavirus, requiring the household to isolate for two weeks.

    Last year, when their jobless aid briefly lapsed, the couple sold one of their cars to get by. But now they are running out of options. Do they draw further on the generosity of neighbors? Sacrifice tuition? Delay paying rent as long as possible?

    “When you’re stressed as a parent, you don’t want it to show, but sometimes it shows,” said Feliciano, 42. “It’s a different issue going on every day. You just take it day by day and do the best you can.”

    Feliciano and her family have been thrust squarely into a vast social, political and economic experiment that has no parallel or precedent. DeSantis and 25 other governors nationwide, all but one of them Republican, opted this spring and summer to reject extra federal aid intended for people who lost their jobs because of the coronavirus, contending that the more robust social safety net was leading to widespread labor shortages. But the coronavirus’s deadly delta variant, which has overwhelmed Florida in recent weeks, shows just how fragile the economic recovery still is. Some people, like Feliciano, can’t even envision moving forward. They are worried about losing what little they have.

    “We really have no say,” she said. “The only say we have is who we get to elect for whatever position. But once they get there, they forget that entirely.”

    Few political leaders have rebuffed federal economic aid and public health guidance as much as DeSantis, a presumptive 2024 presidential candidate whose political campaign sold T-shirts that read, “Don’t Fauci My Florida.” His derision of Anthony S. Fauci, the nation’s leading infectious-disease expert, and virtually any other public health expert he disagrees with has made him a conservative hero but a divisive figure in his home state, which is now leading the nation in the number of people hospitalized with covid-19.

    DeSantis, also 42, has attempted to restrict mask mandates in schools and banned businesses from requiring vaccination, enraging some companies, parents, school districts, and people like Feliciano. He has trumpeted many of his policy changes in news conferences and cable news appearances while brushing aside the inevitable impact, dismissing the rising infections as a “seasonal pattern.”

    Christina Pushaw, a spokeswoman for DeSantis, said his decision to end the federal benefits early stemmed from conversations with “countless” small-business owners, who had found it nearly impossible to hire workers.

    “Small-business owners pointed to the federal benefits as the major reason for these challenges, and it makes sense — small businesses should not be forced to compete with the government printing money to pay people to stay home,” Pushaw said.

    But as the virus extends its grip over Florida, interviews with unemployed workers show the economy here is not as strong as the governor has suggested. And for some people, it’s only getting worse.

    Twenty-five miles west of Tampa, in the coastal town of Dunedin, several dozen people lined up at a food bank in a grassy lot behind a church on a recent Thursday morning. The food bank, Dunedin Cares, sits just across the street from Dunedin High School, where a young DeSantis excelled on the baseball field more than two decades ago. Joe Mackin, president of the food bank’s board, said the organization is serving 40 percent more people this year than last year, something he attributed to wider awareness about its offerings.

    “There’s a lot of people out there that need food,” he said.

    One of those people is Nicole Pinkel, whose husband had been making good money as a bartender for local theaters when the coronavirus shuttered their programs. Now he is back to work but receives far fewer shifts than he used to. And looming over the family is the risk of new closures of entertainment venues, given the sharp rise in infections.

    The extra $300 per week in federal unemployment benefits that her husband received through June was helping the family get by, Pinkel said. Then it stopped. “That’s what we were paying our bills on and living on,” she said.

    The economic tensions that have confounded policymakers for months are evident all over Central Florida.

    “Help Wanted” signs are staked outside many restaurants, and some hotels now warn guests that their rooms will be cleaned only every few days because of a shortage of housekeepers. Nationwide, there were more than 10 million job openings as of June, according to data from the Bureau of Labor Statistics.

    But many Floridians said there are complicated realities behind those headline figures. People from all walks of life said they are still struggling to find work, stymied by a lack of child care, the new wave of covid infections and some employers who seem uninterested in hiring older workers or those without a college degree.

    The unfolding situation in Florida and other mostly GOP-led states that cut off extra aid early is a taste of what may be in store soon for the rest of the country when federal benefits expire for millions next month, even as more than 8 million people remain jobless.

    “We know that the job market is improving, but we don’t know how quickly people are going to be able to find those jobs and how well-matched the unemployed are to the available jobs that are open,” said Andrew Stettner, a senior fellow at the Century Foundation, a liberal think tank.

    An analysis by Stettner this month found that some 7.5 million people stand to lose their jobless benefits as of Sept. 6, when three federal pandemic-related benefits programs expire. They include 4.2 million people traditionally ineligible for jobless aid, such as gig workers and the self-employed. Another 3.3 million people would be cut off from a program that had been helping those who had exhausted their state aid without finding work. The stories from Florida suggest that the vast majority of those people will not simply return to work. In fact, many of them could face dire financial hardships.

    While pressure from activists and liberal lawmakers spurred the Biden administration to renew a moratorium on evictions, there is almost no chance at this point that a similar extension is in store for the jobless benefits. Congress is unlikely to even vote on any proposal until well after the benefits expire, and President Biden said in June that it “makes sense” that the $300 weekly payments will expire next month.

    “The evidence so far shows that the pandemic programs have had little impact on job growth, and so I’m surprised that the Biden administration and Democrats in Congress are not doing more to push for a policy that so many workers continue to rely on,” said Peter Ganong, a public policy professor at the University of Chicago.

    The administration has opened the door for state-by-state extensions of some of the programs using federal funds, and a White House official pointed to Biden’s wider economic agenda, including an expansion of the child tax credit and support for schools and local governments.

    After she prepares her 7-year-old daughter for the school day, Feliciano settles in around 8 a.m. for a round of calls and emails with potential employers, the property management company that liaises between her and her landlord, and hunting through a tangled, complex web for any aid that may help them get by. She posts frequently on local Facebook unemployment groups, offering her hard-won knowledge to people navigating the same system.

    “I have to call about this application. I have to call about rental assistance. I have to get in touch with the landlord. I have to call and reschedule this bill and post it out further so I can juggle it,” she said. “It’s like playing chess, and I suck at playing chess.”

    She closely followed the tense last-minute efforts by Democrats to extend a federal eviction moratorium this month, knowing that her family’s ability to stay in their home would depend on it.

    Feliciano’s evenings are filled with her job search. Before she was laid off in April 2020, she worked as an office manager. She estimated she has applied for around 10 jobs per week in the time she has been unemployed, mostly through the job search site Indeed.

    But though there are lots of advertised openings, they seem to evaporate with no concrete offers. In one recent example that she said was emblematic of her overall experience, she applied for a role as a recruitment coordinator July 21 and received a reply from the company Aug. 11 asking for her preferred salary. She responded the next day and followed up a week later but has yet to hear back.

    All the while, she has to balance her need for a paycheck with practical limitations: Until recently, the kids were home for the summer, so she was looking for jobs she could do from home. The school year has now begun, so she has more options. But given that the couple now has only one working vehicle, she has to look for positions close to home, where her neighbors might be able to help her with rides.

    And Feliciano, who did not go to college, is painfully aware of the fact that even some entry-level jobs require an associate’s degree.

    As Republican governors across the country, including DeSantis, cut off federal aid this summer, they contended that it was dissuading people from going back to work. Dane Eagle, executive director of Florida’s Department of Economic Opportunity, said the decision would “help meet the demands of small and large businesses who are ready to hire and expand their workforce.” But labor experts and economists say the evidence that has emerged thus far contradicts the assertions of Republican leaders.

    Data from Homebase, which makes a time-tracking tool used by small businesses, found that employment in small businesses was down 3 percent nationwide in early August compared with the same period in July. States that ended the extra benefits early saw employment decline by 5.6 percent, while in states that did not end the benefits early, employment declined by 4.3 percent, said Adam Beasley, manager of data products at Homebase.

    Ganong’s research shows that extra unemployment aid has proved to be a small disincentive for people to go back to work — far less than many economists expected before 2020.

    An analysis of anonymous banking data for more than 18,000 mostly low-income people, released by academic researchers on Friday, found that for every eight workers who lost their benefits in states that cut them early, just one worker found a new job. The average worker affected by the cuts lost $278 each week and reduced their spending by $145 per week in response, leading to a collective $2 billion in lost spending between June and early August in the 19 states analyzed.

    “An abrupt stop in that assistance really does not benefit families. It does not in any way force people back into the workforce,” said Cindy Huddleston, a senior policy analyst at the Florida Policy Institute. “And it has the effect of pushing people into poverty and feeling hopeless with no end in sight to the pandemic.”

    Asked for evidence that employment has grown in Florida since the benefits were cut off, DEO spokeswoman Emilie Oglesby pointed to state data showing that more than 17,000 online job ads were added between June and July, for a total of over 545,000 postings — although job ads do not equate to actual employment. Florida’s current unemployment rate of 5.1 percent is below the national rate of 5.4 percent, though it has ticked up slightly since January.

    A few miles south of Dunedin, outside an employment office in Clearwater this month, workers described a range of obstacles to finding a job. Morg DeJesus, a 31-year-old single mother of two, said she lost her job at a local factory last month when a covid-19 outbreak forced it to close.

    St. Petersburg resident John Surprenant, 63, lost his position at a large retailer in February. He estimates that he has applied for 40 to 50 jobs since then, while he tries to get by on a little over $100 a week in state unemployment benefits in addition to his Social Security check.

    “I get no response,” he said. “I don’t know if it’s because of my age or what.”

    He had been receiving the extra $300 each week before DeSantis cut it off in June, and that money was helping him get by.

    “Now I have to sit home, watch my meals. Like I don’t eat breakfast, I’ll have a light lunch and then have a good dinner,” Surprenant said. “I don’t know why the governor is doing all this.”

    Deiondrick Roberts, 32, estimates he has applied to between 200 and 300 positions since he lost his job in June. He is trained as a digital user experience and interface designer, and said he is finding those positions in short supply.

    “I know there are jobs being created but it depends on what type of jobs are being created,” he said. “That kind of adds to the frustration and competitiveness of trying to get a job.”

    Roberts receives around $575 every two weeks in state unemployment benefits. That’s not enough to pay his bills, so his family and roommate have stepped in to help in the meantime, help he is not accustomed to needing.

    “I’ve never been the type of person to ask others for assistance,” he said.

    Some out-of-work Floridians have banded together to sue DeSantis in an effort to win back the federal benefits. They are buoyed by the recent success of such efforts in other states, including Arkansas and Maryland. If they win, unemployed workers throughout Florida could retroactively receive federal benefits owed since late June, said one of the attorneys for the plaintiffs, Scott Behren. A judge is set to hear arguments in the case this coming week.

    A hearing for the case took place last week, and Feliciano followed via live stream. That morning, she had checked on her stepson, still recovering from his covid infection, then followed up on a rental assistance application and checked for updates on her job search. As she listened to the judge lay out his view of the issues at stake, she sipped her coffee and answered messages from strangers seeking her advice with their unemployment claims.

    _________________________________________________

    Original article posted in Washington Post: https://www.washingtonpost.com/business/2021/08/22/unemployment-economy-desantis-florida/

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  • A new Basic Income Lab has been established to research how it could apply in Australia

    Pandemic a ‘natural experiment’ for universal basic income proposals

    By: Matt Wade

    The massive government support to JobSeeker and JobKeeper during the pandemic has given researchers a rare opportunity to test how a guaranteed basic income for all adults could work in Australia.

    Proposals for a universal basic income (UBI) – an unconditional regular flat payment from the state to all adults – have gained international attention during the past decade amid high unemployment, weak wages growth and perceptions of growing inequality in many Western nations.

    A new Australian Basic Income Lab involving academics from Sydney University, Macquarie University and the Australian National University has been established to research how basic income policies may apply here.

    “The pandemic, and particularly the government support package responding to it, have stimulated interest and created a wealth of data on what steps towards a basic income approach might look like,” said lab co-director Ben Spies-Butcher from Macquarie University.

    This week Anglicare became the first major charity in Australia to call for a state-funded basic income.

    Anglicare said a “guaranteed basic income above the poverty line” was now necessary to offset growing employment insecurity as the labour force changes.

    “Whether it is achieved through a universal payment or a guaranteed adequate income for every Australian over the poverty line, it is clear that such a scheme would tackle poverty and income insecurity across Australia,” a report by Anglicare said.

    An Ipsos survey of a representative sample of 1000 adults, commissioned by Anglicare, found three in four Australians (77 per cent) back an unconditional basic income above the poverty line.

    A similar YouGov poll conducted for the Green Institute last year found only 58 per cent of surveyed Australians supported the introduction of a UBI.

    However, critics have warned the huge cost to the federal budget of funding a UBI could threaten the viability of public services now provided by the state such as health and education.

    Dr Spies-Butcher says the COVID-19 experience has provided researchers “with a ‘natural experiment’ testing how a basic income could work here and how those lessons can be adapted to permanent practical policy recommendations.”

    A recent study by Spies-Butcher, Ben Phillips and Troy Henderson evaluated the effects of a basic income payment of $14,650 a year which would taper off as an individual’s income rises and not apply to those earning more than $180,000 per year. Under the scheme, JobSeeker and Youth Allowance would not be required. The proposal would have an estimated annual net cost of $103 billion. A more generous payment of $18,500 per year would have an annual net cost of $126 billion.

    Such a payment would lift tens of thousands out of poverty and dramatically reduce economic inequality in Australia, the study found.

    Anglicare Australia executive director Kasy Chambers said Australia had a form of basic income for the first time during last year’s pandemic’s disruptions.

    “JobSeeker was lifted to the poverty line, and JobKeeper gave stability to people in insecure work,” she said. “Lives were transformed, and hundreds of thousands of people were lifted out of poverty. Our study shows that a permanent basic income would lock in these benefits and bring many more.”

    The Anglicare survey found 38 per cent of respondents would use a basic income to secure their finances. Almost one in four said a basic income would allow them to spend more time volunteering while a similar share said it would allow them to spend more time caring for others.

    Andrew Yang, a candidate in the 2020 US Democratic Party presidential primaries, promised a UBI of $US1000 ($1400) a month for American adults. He argued the payment was required because of the large number of jobs that will be lost to future automation.

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  • We haven’t seen the last of stimulus checks

    By: LANCE LAMBERT

    As panicked states issued far-reaching shutdowns during the early days of the pandemic, the economy went into a complete tailspin. The immediate economic shock was the worst on record—even worse than the 1929 stock market crash. Amid the unprecedented circumstances, Republican and Democratic lawmakers joined forces to put together the largest stimulus package ever passed. That $2.2 trillion CARES Act signed into law in March 2020 created a host of new programs, including forgivable small-business loans (PPP) and enhanced unemployment checks. But none was more popular than the one-time $1,200 stimulus check.

    It’s easy to see why it was well liked:

    The $1,200 stimulus check was a lifeline to more than 100 million households. Its success and popularity were so strong that the additional aid packages passed in December 2020 and March 2021 also included direct payments.

    Even now as the economy moves into a high growth phase, there are still calls for more stimulus checks. It is unlikely to happen again this year. However, the next time a recession hits, there will undoubtedly be a push for more stimulus checks.

    On economic grounds, Mark Zandi, chief economist at Moody’s Analytics, says stimulus checks were unique to this crisis—which quickly plunged the economy into a historic contraction.

    The first check was very effective: The Tax Foundation finds around 75% was quickly spent by recipients.

    But the second and third rounds, which went out once the economy was already in recovery, were less impactful for the economy. For those rounds, over 70% of the money was used to pay off debt or put into savings, according to the Tax Foundation.

    But the economic benefit of the checks isn’t why they’re likely to return, Zandi says. It’s the political popularity of the payments. Just days before the CARES Act was passed in March 2020, a Fortune-SurveyMonkey poll found 89% of Democrats and 85% of Republicans supported a one-time direct payment. In a polarized nation, that type of political consensus is rare.

    “The politics of it suggest there will be future stimulus checks,” Zandi tells Fortune. Simply put, stimulus checks are poised to be a lasting policy creation of the COVID-19 recession.

    The political power of stimulus checks was on full display last election season. In December, President Donald Trump failed to get his Republican colleagues in the U.S. Senate to increase the proposed stimulus checks from $600 to $2,000 in the December aid bill. Ultimately, the Senate passed the $600 checks. It then became a political issue in the two Georgia Senate runoff races. Those Jan. 5 races would decide party control of the Senate. Both Democratic candidates, Raphael Warnock and Jon Ossoff, promised to make $2,000 stimulus checks a reality if they won. That pressured the Republican candidates, David Perdue and Kelly Loeffler, to do the same. In the end, Democrats won both seats—something political analysts attributed to Republican senators blocking the $2,000 checks in December.

    If not for voters’ demands for another check, Zandi agrees that Republicans might have retained the Senate. Once they took power this year, Democratic leadership quickly used it to pass a $1.9 trillion aid package in March, which included a $1,400 stimulus check.

    Stimulus checks aren’t the only policy tool or measure likely to outlive the pandemic.

    During the depths of the Great Recession, Congress passed a $787 billion stimulus package in 2009. That amounts to $991 billion in inflation-adjusted 2021 dollars. This go-around, Congress passed three massive packages totaling a staggering $5 trillion. The generosity of the stimulus during this crisis is among the reasons economists like Zandi believe the economy recovered faster. Following the 2008 financial crisis, the unemployment rate was above 7% from December 2008 to October 2013, or 59 consecutive months. During the pandemic, the jobless rate was above 7% for just six months. As of June, it stands at 5.9%. That relative success could incentivize Congress to continue to “go big” during future recessions.

    “We would not be in this [good] position today if it weren’t for that policy response,” Zandi.

    When it comes to the policies, Zandi foresees PPP as being the least likely to be used in a non-pandemic spurred recession. The most likely to return that is not named stimulus checks? Mortgage forbearance—which ends on Sept. 30—and enhanced unemployment benefits, he says. The latter, which is paid on top of state jobless benefits, is considered among the best policy tools used to blunt the impacts of the COVID-19 recession. 

    _________________________________________

    The original article appeared in Fortune: https://fortune.com/2021/08/03/stimulus-check-us-future-rounds-update/

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  • UBI has emerged in South Korea as a major issue ahead of the presidential election

    Universal basic income has emerged as a major issue ahead of the presidential election, which is now just nine months away.

    BY: SHIM SAE-ROM, SOHN KOOK-HEE  [lee.hojeong@joongang.co.kr]

    The idea entered the Korean political conversation when Democratic Party (DP) frontrunner Lee Jae-myung, who is currently serving as Gyeonggi governor, suggested a government-funded universal basic income.
     
    Other DP presidential candidates are against the idea. Lee Nak-yon and Chung Sye-kyun, who both served as prime minister under the current administration, oppose a universal income.  

    People Power Party’s Yoo Seong-min, also running for president, rails against Governor Lee’s idea, saying basic income is populist, but has proposed his own welfare program, “fair income,” that would help lower-income families through taxes collected from the wealthy.
     
    Yoo argues that the program would help close the income gap.

    While not running for president, Seoul mayor Oh Se-hoon has pitched the ansin income program, in which people below a certain income level will receive support.  

    “The discussion on basic income in the political community shouldn’t be just about income but expand into overall welfare including the changing economic structure, growth and labor reform,” said Ahn Sang-hoon, a Seoul National University social welfare professor.  

    The issue could inspire a national debate, much like the back-and-forth on the universal free lunch for students that was raised by then Seoul mayor Oh more than a decade ago and led to his resignation from office.
     
    On June 9, Gyeonggi Mayor Lee partially acknowledged the value of the proposal by Seoul Mayor Oh, in which different income groups receive different cash welfare accordingly to their current income status, but he argued that universal basic income is not just a welfare policy and is more of an economic policy.

    He stressed that his basic income will allow families to spend, contributing to the continuing growth of the domestic economy, especially at a time of recovery and as new jobs are scarce and more companies adapt to fourth industrial revolution technologies.  

    The political leaders of the opposing party argue that universal basic income is a concept that is unfair and unjust.  
     
    “It is a policy that can only be thought of in a time when all 50 million people in the country are poor,” said PPP’s presidential hopeful Yoo. “Governor Lee’s basic income is rather unfair and discriminatory.”
     
    People Party’s leader Ahn Cheol-soo, another presidential candidate, argued that unilaterally distributing income isn’t an idea that is fair, while championing the idea of cash welfare only provided to a certain income group and in different amounts.

    While the debate between Governor Lee and the opposition parties has been focused on whether the basic income should be universal or selective, the argument within Lee’s DP has been whether giving out cash is the best welfare solution.  
     
    The other DP presidential candidate focuses more on expanding the current administration’s inclusive policies.  
     
    Lee Nak-yon, the former Prime Minister and former DP leader, said not only is Governor Lee’s universal basic income costly, it provides less support than the actual help that the less fortunate need.  

    “There are ways to achieve more than the basic income by working more strongly on the social welfare system,” former prime minister Lee said.  

    He is promoting a “new welfare” that covers eight areas — income, housing, labor, education, medical services, child and senior care, culture and the environment.  

    Former prime minster Chung Sye-kyun strongly criticized the universal basic income as a fairy tale, which shouldn’t be picked as the DP’s main agenda.

    Like former prime minister Lee, Chung also promotes expanding and reforming the current welfare system.  

    He proposes what he calls “Mymy Welfare,” in which people individually choose welfare programs they like rather than a universal welfare program.

    Park Yong-jin, DP lawmaker, who recently announced his presidential candidacy and is the youngest candidate within the ruling party, said we should now move beyond welfare programs that hand out cash collected through taxes.  “We cannot solve wealth inequality only with cash welfare,” Park said.  

    He proposed a state fund where the investment profits are shared among the people.  

    The two former prime ministers oppose the Gyeonggi governor’s basic income and are promoting welfare programs that provide cash for young people just starting out in society.  

    Lee Nak-yon proposes giving 30 million won to every young person discharged from the military, while Chung Sye-kyun proposed a 100-million-won handout to every young person just starting out in society.  

    Some of the public figures who are considered as possible candidates, including former Finance Minister Kim Dong-yeon and Won Hee-ryong, argue that the focuses should be more on increasing opportunities rather than simple welfare to allow people in difficult situations, including low-income households, to be self-sufficient. This includes financing education and vocational training.  

    Lee Kwang-jae, a DP member who recently announced his candidacy, said a universal basic income will end as a trial unless a welfare overhaul increasing real household income through jobs is achieved.

    While raising questions on funding, none of the candidates have yet offered a clear means of financing.

    The Gyeonggi governor has raised the possibility of funding the basic income through carbon taxes or data taxes, but these are still general plans without specific details.  

    “Unless there are cuts to existing welfare spending, in order to adopt basic income, raising taxes will be inevitable,” said Sung Tae-yoon, a Yonsei University economics professor.  

    Yoon Tae-gon, senior political analyst at Moa Agenda Strategy, a political think tank, said in the presidential race, the biggest issue will be welfare, as the DP’s traditional election campaign agenda of North and South Korea peace won’t attract voters.  

    “As Governor Lee is leading in the polls [among DP candidates], the other candidates will likely increase their attack on the weakness of Lee’s basic income,” Yoon said.

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  • NDP promises universal pharmacare and guaranteed livable income for all Canadians if elected

    Party says wealth tax would help cover its proposed services

    By: Catharine Tunney 

    If elected, NDP Leader Jagmeet Singh is promising to bring in universal prescription drug coverage, dental care and mental health supports within his first mandate and is vowing to bring in a wealth tax to help pay for it all.

    This morning the federal party released a list of commitments focusing on health care and affordability, which is expected to form the backbone of its campaign platform during the looming federal election.

    The document signals the party’s long-term vision, but a party spokesperson speaking on background said they believe universal prescription drug coverage, dental care and mental health care for the uninsured is doable within the first mandate.

    The commitments document doesn’t contain a costing breakdown on its promises, so it’s not clear how much the fourth-place party’s promises would cost.

    During a technical briefing with reporters before the release, a party official said they plan on working with the Parliamentary Budget Officer to estimate what it will cost to implement their proposals. 

    Some previously announced promises, such universal prescription drug coverage, were costed in the 2019 election but could have risen.

    To cover some of the proposed programs, the party said it would bring in a one per cent tax on households with wealth of more than $10 million — widening the net from its previous promise of wealth over $20 million.

    A party official said the new promise would bring in as much as $10 billion a year to then be invested in services.

    Another revenue source would be a promised temporary COVID-19 excess profit tax that puts an additional 15 per cent tax on large corporations that recorded major profits during the pandemic. 

    “We’re going to ask the ultra-rich to finally start paying their fair share and invest that into people,” Singh told reporters during a news conference in St. John’s.

    Mental health supports

    As part of its health-care plank, the party says a New Democrat government would bring in mental health care for uninsured Canadians so that people without such coverage would be able to seek out help.

    It’s one of the big-ticket items, along with making post-secondary education part of Canada’s public education system, that would require buy-in from the provinces. 

    A party official said the pandemic proved that provinces are willing to work with Ottawa across party lines.

    Other promises include:

    • $10-a-day child care.
    • Reintroducing 30-year terms to Canada Mortgage and Housing Corporation insured mortgages on entry-level homes for first-time home buyers. 
    • Creating at least half a million units of affordable housing in the next 10 years.
    • Guaranteed livable income for all Canadians. 
    • A price cap on cell phone bills.
    • Continuing wage and rent subsidies for small businesses as the pandemic continues.

    While the release suggests the NDP is preparing for an election, Singh said he’d rather work in Parliament than head out on the campaign trail.

    “If Justin Trudeau was listening to people and their concerns and their worries, he would not be holding a selfish summer election,” he said.

    Conservative Leader Erin O’Toole has also said that the Liberals should not rush the country into a federal election during a fourth wave of the pandemic.

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  • OPINION: Colorado economists: We need a federal carbon fee with cash back for all U.S. citizens

    By: ANDERS F. FREMSTAD

    Many of us have publicly supported this position before. Why are we doing so again now? Global climate change has reached crisis status, requiring immediate national action. President Joe Biden has called for major investments to facilitate the transition to a renewable energy economy. Those investments are needed but alone they are not enough to secure the rapid change necessary to meet the president’s goal of reducing U.S. emissions more than 50% below 2005 levels by 2030.

    Guided by sound economic principles, more than 3,500 economists from every state in our country have recommended that the federal government put a price on carbon emissions and return those revenues to the public as carbon dividends.

    Now, with the publication of this op-ed, I and these sixteen Colorado economists join the chorus: Edward B. Barbier, Colorado State University; Jo Burgess Barbier, Colorado State University; Elissa Braunstein, Colorado State University; Carol A. Dahl, Colorado School of Mines; Kevin Duncan, Colorado State University-Pueblo; Mark Eiswerth, University of Northern Colorado; Nicholas Flores, University of Colorado Boulder; Daphne T. Greenwood, University of Colorado, Colorado Springs; Terrence Iverson, Colorado State University; Daniel K. N. Johnson, Colorado College; Farida Khan, University of Colorado, Colorado Springs; Haider Khan, Denver University; Kyle Montanio, University of Colorado Denver & International College Beijing; Mark Griffin Smith, Colorado College; Jeffrey S. Zax, University of Colorado Boulder.

    What we are experiencing today — increasing drought, water supply issues, and wildfire risks — will impact the economy and heritage of Colorado.

    We are compelled to issue this call for action to reduce greenhouse gas emissions through a federal pricing mandate that will also induce the innovation necessary to address the climate crisis. We are asking Colorado’s congressional delegation to support the following policies.

    Impose a carbon fee

    A carbon fee will reduce carbon emissions at the needed speed. A carbon fee will use market forces to move both businesses and consumers to low-carbon solutions. Columbia University’s Center on Global Energy Policy has estimated that a steadily higher price on carbon, ($10/ton per year), would cut fossil fuel emissions by 30% in the first 5 years alone. This will put America on a path to meet the Paris Accord targets and to reach net-zero by 2050.

    The carbon fee should increase every year until the net-zero goal is met. A revenue-neutral fee will reduce debates over higher taxes.

    A carbon price will encourage technological innovation, large-scale infrastructure development and stimulate the development of low-carbon goods and services. Yes, some jobs in the fossil fuel industries will be lost, but more and better jobs in the emerging clean energy economy will be the real result.

    A scheduled rising carbon fee provides a strong market signal that promotes economic growth and provides businesses the pricing certainty needed for committing investment.

    Adopt a carbon border adjustment

    The European Union has announced it will impose a carbon border tax, beginning in 2023, on imports from nations that do not have an equivalent carbon price. If the U.S. implements the policy we are recommending (a carbon price including a carbon border adjustment) American businesses will remain competitive in their European markets. America will join with our traditional European partners in action that matches our stated goals and together we will motivate additional nations to also price carbon. Additionally, the border adjustment should act to incentivize foreign firms who sell in the U.S. to reduce their products’ embedded carbon independent of other carbon pricing schemes, thus inducing a sizable carbon reduction benefit.

    Return the carbon revenues to Americans as a carbon dividend

    The carbon pricing program can maximize fairness and the political viability of a rising carbon fee via a “cash back” program. All revenue should be returned directly to U.S. citizens through per-capita carbon fee rebates or dividends. Most Americans, including the vast majority of low-income households, will benefit financially by receiving more in “carbon cash-back” than they pay in increased energy prices.

    Call for Action by every Colorado Citizen

    Every Coloradan reading this should call or write their congressperson and senators and let them know you want a carbon fee with cashback for all U.S. Citizens. Tell them you want bipartisan support for a Carbon Fee and Dividend policy as provided in H.R. 2307 — 117th Congress.

    This effective, practical policy should be enacted as soon as possible.

    ______________________________________________________

    About the Author: Anders Fremstad teaches courses in microeconomics, environmental economics, and political economy at Colorado State University. His current research focuses on the distributional impact of carbon mitigation policy.

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  • Poll: Parents Who Have Received the Expanded Child Tax Credit Strongly Support Permanent Extension, Including 73% of Trump Voters

    By: Contact: McKenzie Wilson

    Today, Fighting Chance for Families released a new poll of likely voters finding that people who have received the checks, and parents overall, overwhelmingly support the program and its extension. Critically, this includes parents who voted for Trump and received the Child Tax Credit who strongly support the policy by a margin of 51-points. Moreover, Trump voters who benefited from the Child Tax Credit strongly support extending it: by a margin of 37-points, Trump voters who received the Child Tax Credit support making it permanent.

    The poll also found that across partisanship, people who received the expanded Child Tax Credit created by the American Rescue Plan are strongly supportive of it (by +70 points) and want to see it made permanent (by +54 points). Even after including all voters — including those who did not receive the CTC and are not parents — there is still majority support for the Child Tax Credit: a sample of voters across all demographics support the expanded CTC by a 24-point margin. This includes Democrats by a 67-point margin, Independents by a 16-point margin, and more than a third of Republicans.

    Read the full poll and methodology here.

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  • New Mexico considering statewide guaranteed basic income program

    In an attempt to put low-income workers on more solid financial footing, New Mexico lawmakers in recent years have approved a minimum wage increase and a paid sick leave requirement, among other policies.

    By:  DAN BOYD / JOURNAL CAPITOL BUREAU CHIEF

    The newest debate on the horizon could center on guaranteed basic income, a policy that provides low-income residents with regular financial payments.

    At least two New Mexico cities – Las Cruces and Santa Fe – are already considering, or moving forward with, targeted guaranteed basic income pilot projects and state lawmakers heard an update on the plans during a Monday committee hearing at the state Capitol.

    Several legislators said they’re planning to watch the local-level efforts play out before possibly moving forward with a statewide proposal.

    Rep. Antonio “Moe” Maestas, D-Albuquerque, said a guaranteed basic income program could avoid the “cliff effect,” or possibility of losing access to benefits due to increased income, that exists with such other safety net programs as Medicaid and unemployment.

    He also said many New Mexicans would use the money for basic health care and school supplies for their children.

    “I think that $400 is a heckuva lot of money to a heckuva lot of people in this state,” Maestas said, referring to the pilot program Santa Fe is launching.

    Santa Fe Mayor Alan Webber, who testified at Monday’s meeting of the interim Revenue Stabilization and Tax Policy Committee, described the policy as an idea whose time has come after being supported in the 1960s by former President Richard Nixon.

    “This is exactly what we need to break the cycle of poverty … that too many people live in,” Webber said.

    He described Santa Fe’s guaranteed basic income pilot program that will be funded by a national advocacy group as a “stability stipend.” It will provide 100 people under age 30 who have children and are attending Santa Fe Community College with monthly payments of at least $400.

    Several other cities nationwide are also moving forward with similar programs that follow on the heels of Stockton, California, which provided 125 low-income people with $500 a month for two years.

    But some lawmakers expressed skepticism about how a guaranteed basic income program would function and how much it would cost.

    Rep. Larry Scott, R-Hobbs, questioned how guaranteed basic income might impact New Mexico’s unemployment rate, which was tied for the nation’s highest in June, at 7.9%, along with Connecticut.

    “New Mexico employers are having a very hard time finding people to work now,” Scott said.

    In addition, New Mexico has long struggled with high poverty rates and more than 926,000 state residents – or about 44% of the state’s total population – were enrolled in Medicaid as of May.

    While state revenue levels have been on the upswing since plummeting at the start of the COVID-19 pandemic, providing just 10% of those residents with $100 monthly financial payments would cost roughly $111 million annually.

    But there could be different types of funding mechanisms available if New Mexico were to pursue such a policy, as Alaska has long offered its full-time residents an annual dividend based on the investment earnings on mineral royalties. The dividend amount for 2020 was $992 per person.

    Las Cruces City Councilor Johana Bencomo, who is leading the push for a basic income program in the southern New Mexico city, described the traditional approach to addressing poverty as “patronizing and patriarchal,” and said cash payments allow recipients to use the money as they deem fit.

    “I do believe that poverty is a policy choice,” said Bencomo, who is also executive director of a nonprofit group that advocates for immigrant and worker rights.

    She also cited the impact of cash assistance programs funded by federal relief dollars during the pandemic, which included one-time payments of $750 for those who didn’t qualify for a federal stimulus check.

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  • Scotland to host world’s largest conference on Universal Basic Income

    Scotland is set to host the world’s largest universal basic income (UBI) conference this month.

    By: Craig Meighan

    Basic Income Network Scotland, in partnership with the University of Strathclyde, will see the 22nd Basic Income Earth Network Congress come to Glasgow from August 18-21.

    The congress – with an expansive programme of academic presentations, workshops, artists and activists from all over the world – will welcome participants including United Nations representatives to focus on taking UBI from an idea to a reality.

    UBI is currently defined as an unconditional, non-withdrawable income for every individual as a right of citizenship, with advocates including Pope Francis.

    A combination of factors has broadened its appeal in recent times: rising inequality, widespread economic insecurity, and the potential of labour-displacing technological change, including automation and artificial intelligence.

    For several years Scotland has aimed to lead the UBI debate in the UK and at last year’s elections, the SNP’s manifesto proposed a move to a minimum income guarantee in the current parliament to form the foundations for a basic income if Scotland chooses independence.

    Ronnie Cowan MP said: “This congress comes at a pivotal time when people’s livelihoods and work opportunities have been limited due to a global pandemic. A basic income could act as a safety net for those struggling to make ends meet and give them the opportunity to empower themselves and move forward.

    “I was delighted to learn the Basic Income Earth Network Congress for 2021 is to be held, virtually, in Glasgow as this will be a tremendous opportunity to show to the rest of the world the actions Scotland has already taken in pursuing a basic income. I believe the time for introducing a basic income is now.”

    A £250,000 Scottish Government-funded study led by four local authorities (Glasgow, Edinburgh, North Ayrshire and Fife) provides the basis for Scotland’s headline plenary session.

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  • Poll: 77% of Australians back a basic income guarantee above the poverty line

    By: Michael Janda.

    The COVID-19 pandemic has been a social and economic disaster of almost unprecedented proportions in recent history. But, for one group of people, last year’s silver linings outshone the hardships.

    “When we had the coronavirus supplement, I was able to pay my rent, I could pay my bills on time, I got to pay off debts that I’d had for years, I was able to buy food and clothes,” says current Austudy recipient Teddy White, who was on JobSeeker for most of last year.

    White says he was able to buy new winter clothes, pyjamas and bedding for the first time in years.

    Without the anxiety of living hand to mouth, he found the headspace to consider his future, escape from a treadmill of unsuitable jobs that exacerbated his health problems, and enrol in university.

    Wendy Morgan also had a very positive 2020.

    “Last year was fantastic because I didn’t have to make do without electricity at all last year,” says the long-term JobSeeker recipient.

    She lost her last stable employment in 2012 and has since experienced evictions, homelessness and being repeatedly cut off from essential utilities. But keeping the lights on is not the only reason why Morgan can now see her crochet properly.

    “My lenses alone were over $750 and I just couldn’t afford that on the Newstart payment, and I’d been from 2012 until last year without any new glasses,” she explains.

    But the coronavirus supplement that started at $275 a week and ended in March at $75 has been replaced by a permanent increase in JobSeeker of just $25 a week, leaving income support recipients feeling like they’re back where they started the pandemic.

    Morgan is once again behind on her electricity payments as she juggles bills.

    Wendy Morgan sits outside her apartment doing crochet.
    Wendy Morgan does crochet, not only as a hobby, but also to save money.(ABC News: Simon Goodes)

    “After paying my rent, I get just over $400 a fortnight left over and out of that I’ve got to pay electricity and phone, internet is essential – you can’t look for a job without the internet these days, so I need to have a laptop,” she explains.

    She also needed to replace her laptop and phone when they were stolen in a break-in a couple of months ago, something she struggled to afford on the regular JobSeeker rate.

    But while she lives in a rough neighbourhood, Morgan is lucky to live in relatively low-rent Adelaide. Since the supplements ended, White’s situation in Melbourne is even more desperate.

    “I get $580 a fortnight from Centrelink and $520 of that has to go towards my rent each fortnight, which leaves me with $60 to cover literally every other living expense. So food, meds, clothes, transport, everything.”

    Sixty dollars a fortnight simply cannot cover all of White’s essentials.

    “I can’t buy phone credit, I can’t pay my internet bill, I can’t buy money to put on my Myki [travel card],” he laments.

    “There’s just no way to stretch it to cover everything.”

    Anglicare and Australians back basic income

    It’s experiences like these with the COVID support payments that have prompted charity Anglicare to come out in support of a basic income.

    Video still: Anglicare Australia Executive Director Kasy Chambers. May 2013.
    Anglicare’s executive director Kasy Chambers said COVID had highlighted that poverty is a policy choice.(ABC News)

    The charity’s executive director Kasy Chambers says the pandemic welfare supplements proved that lifting people above the poverty line was economically possible with political will.

    “This clearly showed us it is a choice and, when we made it, the sky didn’t fall in, people didn’t stop applying for work, people still wanted to work,” she tells The Business.

    A survey of a thousand people commissioned by the charity shows more than three-quarters of Australians back a basic income guarantee above the poverty line.

    In fact, more than half strongly support the concept, while only 3 per cent are strongly opposed.

    It is an even stronger finding of support than one revealed in a YouGov survey conducted for The Green Institute late last year.

    Kasy Chambers believes the pandemic and associated recession have increased empathy for those who’ve fallen on hard times.

    “I think many, many more people who hadn’t previously experienced poverty or didn’t know somebody who was living in poverty now do.”

    UBI price tag ‘not chump change’

    Sydney University political economy lecturer Troy Henderson wrote his PhD about basic income schemes and is co-director of the new cross-institution Australian Basic Income Lab with colleagues from Macquarie and ANU. 

    Dr Troy Henderson stands in a park in the sunshine.
    Dr Troy Henderson is co-director of the new Australian Basic Income Lab at the University of Sydney, and wrote his PhD about UBI.(ABC News: Adam Griffiths)

    He argues the pandemic has highlighted what’s financially possible for governments when there’s political will.

    “Providing a basic income floor for all Australians might cost in the order of $15-40 billion,” he says.

    “Now, that’s not chump change, but we’re still looking at an amount of money that is probably only 1-2 per cent of Australia’s GDP and is therefore eminently affordable.”

    Kasy Chambers says that could easily be funded by reducing tax concessions and government transfer payments for the better off.

    “$68.5 billion went to the top 20 per cent of income earners and only $6.1 billion went to the lowest 20 per cent,” she observes, citing previous research for Anglicare conducted by the Per Capita think tank.

    The kind of payment that provides would be $457 a week — around aged pension level — for all those out of work, including some not currently eligible for JobSeeker.

    It’s not a truly universal basic income, which, at that level of payment for all adults, regardless of their other income, would cost close to half a trillion dollars a year (although much of this would be taxed back from those earning money from wages, rents, investments or business profits).

    Simon Cowan from the Centre for Independent Studies think tank, a critic of the universal basic income (UBI) concept, argues this highlights the “impossible trinity” of a UBI as explained by Canadian economics professor Kevin Milligan.

    Simon Cowan stands in front of house holding his mobile phone.
    Simon Cowan is research director at the Centre for Independent Studies.(ABC News: John Gunn)

    “You can have a broad amount of coverage, you can have a generous payment or it can be affordable,” says Cowan.

    “Unfortunately, as Milligan showed, you can really only pursue two of those at once.”

    But Troy Henderson argues a slightly more generous and less restricted unemployment benefit would be superior to the one-off welfare top-ups put in place during COVID.

    “If we did have that type of scheme in place from the get-go we would not be suffering as we are at the moment from these ad hoc, piecemeal policy interventions that always create a significant number of losers during a time of extreme crisis.”

    The two aren’t in total disagreement, with Simon Cowan arguing for a different long-term welfare reform.

    “Basically split the unemployment payment into two,” he says.

    “Have a relatively contained payment for people who are short-term unemployed, transitioning from one job to the other, which was the original design of Newstart, and then have perhaps a more generous payment for long-term unemployed people.”

    ‘Catastrophic’ mutual obligation system doesn’t work

    Another area where Cowan, Henderson and Chambers all agree is dropping the current blanket mutual obligation requirements for job seekers to submit at least 20 applications a month, including for the long-term unemployed.

    “There’s a lot of people who move onto Newstart and cycle off Newstart in a relatively short period of time, they’re actively looking for work and they will find it in the near term,” Cowan observed.

    “They don’t need these additional requirements, they don’t need form-filling, they don’t need all of this government bureaucracy, they just need to be allowed to find a new job.

    “For those who do need additional support, the general obligation doesn’t actually do much for them either because they’re not really going to get a job without that targeted support, even if they send in a hundred job applications.”

    Aside from an increase in payments, those who have been subject to the mutual obligation requirements say it’s the one change that would make the biggest difference to living on JobSeeker.

    “It drives your mental health into the ground,” says Wendy Morgan.

    JobSeeker recipient Wendy Morgan sits outside her apartment in Adelaide.
    Wendy Morgan said she could finally afford a new pair of glasses in 2020, after years without being able to see properly.(ABC News: Simon Goodes)

    “You feel hopeless because you’re applying for job, after job, after job and most of the jobs you’re applying for are often jobs that you’re not even qualified for.”

    “It’s catastrophic,” agrees Teddy White.

    “It’s so bad for anyone’s mental health to be essentially press-ganged into accepting jobs that just will not work for you.”

    Kasy Chambers says it is also often counter-productive for the unemployed, with the applications taking up time many would otherwise use to volunteer or engage in community activities.

    “So, often it’s actually voluntary work that leads to employment, that links people and locks them into their community and that gives people real meaning and satisfaction in their lives,” she explains, noting that volunteering generally doesn’t count towards Centrelink’s activity tests.

    Anglicare’s survey reveals that, aside from paying down debts and saving (38 per cent), the most common behavioural changes in response to a UBI would be volunteering more, spending more time caring for others, spending more time on sports or hobbies, and doing further education. 

    Graphic showing how people would use the money from a universal basic income.
    Anglicare asked people how they would use the extra money provided by a universal basic income (respondents could select more than one option).(Supplied: Anglicare)

    The punishment for not applying for enough jobs, failing to comply with your job plan or knocking back any work is a potential suspension of your payment.

    “Having your payments stopped is terrifying,” says Morgan.

    “Trying to live without payments for up to eight weeks is harder than anyone can imagine.”

    Having previously had to sleep in her car for six months after losing her last stable job and rental house nearly a decade ago, homelessness is an experience Morgan never wants to face again.

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  • Mayor of Cambridge Calls for Permanent Child Tax Credit

    Researchers estimate the expanded child tax credit will cut child poverty almost in half and poverty for Black Children by more than half.

    By: Sumbul Siddiqui, mayor of Cambridge.

    As part of President Biden’s American Rescue Plan passed earlier this year, Congress temporarily expanded the child tax credit to provide monthly payments for most households with children under 18. Families in Cambridge recently started seeing payments in their bank accounts, and they will receive additional payments on the 15th of each month through December.

    Families are receiving monthly payments of up to $250 for each child from 6 to 17 years old and $300 for each child under 6. They will also receive a lump sum of half of the up to $3,600 payment when they file their taxes next year.

    While tax relief is typically available only when you file your taxes, the American Rescue Plan outlines that these child tax credit payments will be provided monthly for the first time ever. This means deeply needed relief will reach families sooner, and they can count on it each month to help make ends meet. This is a guaranteed income — direct, recurring cash payments — for families across the United States. There are no restrictions on how the money can be spent,so each family can determine their own needs from month to month.

    The expanded child tax credit also ensures that the most financially vulnerable families will get at least as much support as affluent families — the child tax credit will be fully refundable, meaning that if a family’s income tax bill is less than the amount of their child tax credit, they will get a payment for the difference.

    If you believe you are eligible and haven’t received a payment, you can learn more and sign up at ChildTaxCredit.gov.

    The tax credit expansion is designed to help all families succeed — from those experiencing poverty and struggling with basic needs like food, rent, and bills to middle-class families who need help with child care and college savings. The IRS estimates that roughly 39 million households — covering almost 90 percent of children in the United States — will receive these payments.

    Researchers estimate the expanded child tax credit will cut child poverty in almost half, and poverty for Black children — who are more likely to live in poor households — by more than half. I think how impactful these payments would have been for my mother, who worked as a grocery store clerk and struggled to make ends meet when I was growing up. Maybe we would have been able to move out of subsidized housing, maybe she would have been able to take time off to interview for a better-paying job. It is not hyperbolic to say these payments would have been nothing short of life-changing for our family, and as the mayor of Cambridge, I want to ensure that all my constituents have access to opportunities that are afforded to those with economic security.

    A growing number of organizations, advocates, and politicians have called on Congress to permanently expand the credit. It is not only good policy, it is the will of the people — a recent poll by Mayors for a Guaranteed Income (of which I am a member) and Data for Progress found that a bipartisan majority of Americans support the expansion being made permanent.

    I support the credit because it is a path to a national guaranteed income — a proven, effective, and direct way to provide our communities with desperately needed financial strength.

    I am also leading a guaranteed-income pilot in Cambridge, the Cambridge Recurring Income for Success and Empowerment(RISE) program. The program will provide $500 to 130 Cambridge residents who are single caregivers of at least one child under the age of 18, with payments beginning next month.

    Because a guaranteed income is targeted to those making under a certain amount, it also provides an outsized positive benefit to women and people of color, who are more likely to earn less. A guaranteed income provides real structural reform to combat the sexism and racism embedded within our economy. All Americans — particularly those disproportionately marginalized by our economic systems — deserve an income floor. If the wealthy and corporations finally paid their fair share in taxes like the rest of us, we could afford it.

    Monthly payments from the American Rescue Plan and Cambridge RISE will help families in Cambridge make ends meet as we continue recovering from the pandemic. Congress should ensure this support is permanent, putting us one step closer to a federal guaranteed income. An income floor for all who need it will lift all of our communities and help us build a resilient, equitable, and thriving America.

    Sumbul Siddiqui is the mayor of Cambridge.

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  • 26 states ended federal unemployment benefits early. Data suggests the states that kept it are seeing employment rise faster

    By: Greg Iacurci.

    ______________________________________

    KEY POINTS:

    • Homebase and UKG, which offer time-management and payroll services, issued separate analyses indicating employment hasn’t increased in states that ended federal unemployment benefits early.
    • Twenty-six states withdrew the federal assistance in June and July, ahead of the official Sept. 6 expiration date.
    • Economists believe other factors, like Covid fears, care responsibilities and early retirements, play a larger role than benefits in a lack of job searches.

    _____________________________________

    About half of U.S. states withdrew federal funds for the unemployed months early to encourage out-of-work residents to find a job. But mounting evidence shows that policy gambit hasn’t yet paid off.

    Twenty-six states announced their intent to end federal pandemic-era benefits starting in May. They officially pulled out in waves over June and July.

    UKG, a payroll and time-management firm, found that shifts among hourly workers in those states grew at about half the rate as states that continued the benefit — the opposite trend of what one might expect.

    infographic

    Specifically, in states that ended benefits, shifts grew 2.2% from May through July; they grew 4.1% in the others that kept federal aid intact, according to UKG’s analysis.

    “Unemployment benefits were not the thing holding people back from going to work,” according to Dave Gilbertson, a vice president at UKG. “There are other elements out there, particularly in their personal lives, making it really difficult to go back to work.”

    It doesn’t appear differences in state economies or labor markets influenced the dichotomy, since both groups were growing at similar rates earlier this year, Gilbertson said.

    infographic

    Similarly, employment fell 0.9% in states that ended federal benefits between mid-June and mid-July, but rose 2.3% in states that kept them, according to data published this week by Homebase, another payroll and time-management firm.

    The analysis examined percent change in number of employees working relative to April 2021.

    The UKG and Homebase figures are early indicators. It will likely take another month or two of job and other labor-market data before economists can make a more thorough assessment of how effective the state policies were, they say.

    “It’s an early view, there’s no question,” Gilbertson said. “It takes a while for folks to be able to rearrange their personal lives to start a new job. “But I feel it’s a pretty strong directional indicator.”

    infographic

    The high-frequency data aligns with other recent analyses.

    Economists at Indeed, using proprietary job-search data, and Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, who studied recent survey data published by the U.S. Census Bureau, also didn’t find evidence that state policies pushed people back to work.

    ″[Data] suggest there’s no clear evidence that [unemployment] programs going away early led to a significant increase in employment growth or job finding,” according to Nick Bunker, the economic research director for North America at the Indeed Hiring Lab.

    Federal benefits

    The federal programs in question were created by the CARES Act in March 2020, as millions of people turned to the unemployment system amid mass layoffs.

    They raised the amount of weekly benefits (currently by $300 a week) and offered aid to workers who don’t typically qualify, like the long-term unemployed and gig workers, the self-employed, part-timers and freelancers.

    Talk of labor shortages — and the role of expanded benefits in them — began in earnest following the April jobs report. The U.S. economy added 269,000 new jobs that month, about a fourth of what economists predicted.

    Montana was the first of the 26 states to announce its withdrawal. The American Rescue Plan offers the federal assistance until Sept. 6.

    In place of expanded benefits, Montana Gov. Greg Gianforte offered residents a onetime return-to-work bonus. A handful of other states also offered such bonuses.

    “The vast expansion of federal unemployment benefits is now doing more harm than good,” Gianforte said May 4. “We need to incentivize Montanans to reenter the workforce.”

    U.S. job growth has ramped up since May, to 850,000 in June. The Bureau of Labor Statistics is issuing its July report Friday; economists expect it to show 845,000 new jobs.

    Some economists argue pandemic-related factors, not jobless benefits, are the primary reasons workers may not be returning to the workforce as quickly as anticipated.

    For example, parents may still not have adequate childcare; those who can’t work from home may still be cautious for health reasons; workers may have relocated away from jobs, or changed industries, during the pandemic; and baby boomers may have retired early and don’t plan to return.

    The delta variant threatens to further complicate the recovery. Many of the states that withdrew federal support also have lower rates of Covid vaccination, Bunker said.

    “Especially now with the delta variant, it could be pushing the labor markets back in those states,” he said.

    Nationally, fewer unemployed people flagged the pandemic as a reason for not searching urgently for work in July relative to June, according to an Indeed survey published Wednesday.

    Jobless respondents ranked unemployment payments last among factors keeping them from searching for work urgently. They ranked behind financial cushion, have an employed spouse, household care responsibilities and Covid fears.

    With the $300 supplement, almost half of jobless workers (48%) make as much or more money on unemployment benefits than their lost paychecks, according to a recent paper published by the JPMorgan Chase & Co. Institute.

    Those extra funds had a small impact on job-finding but didn’t significantly hold back the job market through mid-May, according to economists Fiona Greig, Daniel Sullivan, Peter Ganong, Pascal Noel and Joseph Vavra, who authored the analysis.

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  • Opinion: The pandemic proved basic income is the answer to Pope Francis’ call to build back better

    By: KEVIN CLARKE

    In the early months of the COVID-19 crisis, more than 1,200 economists from around the world urged governments in an open letter to deploy an emergency universal basic income (UBI), a weekly or monthly no-strings-attached, government-funded family payout to counter what appeared to be an impending economic catastrophe. The economists were especially concerned about societies with large informal-sector workforces where “beyond earnings, there is next to no safety net.” As lockdowns were initiated and national economies seized up, many governments indeed turned to a UBI or UBI-like strategies to keep food on the table and people in their homes.

    The United States experimented with a number of UBI-adjacent initiatives as it grappled with its economic shutdown. Unemployment benefits were extended and fattened, and the Paycheck Protection Program allowed idled workers to stay on company payrolls for months while they waited for the green light to return to work. The expanded child tax credit and three rounds of “stimulus” checks kept families and, not coincidentally, the economy afloat as the crisis wore on.

    This emergency UBI experiment has passed or exceeded expectations.

    Many states will remain susceptible to the pandemic, and new hot spots will likely emerge through 2022. But assuming the pandemic is truly cycling down, what is the likelihood that these UBI experiments will translate into long-lasting social welfare policy shifts? In Spain, the United Kingdom, and elsewhere, a dialogue has begun that could see some form of UBI become permanent, enhancing or even replacing current antipoverty arsenals. In the United States politicians like Bernie Sanders and New York mayoral hopeful Andrew Yang have been pressing hard for the establishment of a true UBI.

    Its many critics worry that a UBI disincentivizes work and rewards indolence. They point to recent rehiring difficulties during the pandemic recovery as proof that overcompensated unemployed are opting to laze at home rather than drone back into the U.S. workforce. Of course that criticism ignores the many workers who remain at home because of child care burdens created by the crisis or the reluctance of many employers to offer better return-to-work wages or benefits that might pull COVID-idled workers back to work.

    But what might really blow the minds of the UBI skeptics is the fact that their criticism may be completely valid and, gasp, that would be perfectly OK.

    Economic security created by COVID-connected assistance may indeed be encouraging some heads of households and working couples to stay home to care for their kids while they wait for better economic options. But that is not a bug in a morally and economically sound UBI system—it’s a feature.

    In fact it represents one of the more compelling aspects of the whole enterprise. Folks living under a UBI umbrella should be able to rely on this minimum family support while they weigh their options and seek new opportunities, whether that means going back to school or pursuing industrial retraining. They may even use the UBI as a buffer that allows one partner to stay at home with the kids.

    And that is not a bad thing. It will mean mentally and physically healthier families and better trained or professionalized workers able to compete globally and command higher wages. It will mean stability previously unknown to 30 to 40 percent of U.S. households struggling with economic insecurity. It may just be the opening to a more humane economy—one that serves people before profit—that the church has been imploring since the dawn of the industrial age.

    So let’s not snap defeat out of the jaws of this economic and humanitarian victory. This emergency UBI experiment has passed or exceeded expectations. In the spirit of Pope Francis’ appeal to build back a better world in the aftermath of the COVID-19 calamity, let’s keep it.

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  • If made permanent, the monthly CTC would cost about $100 billion annually, but generate benefits over $800 billion annually

    The Center on Poverty and Social Policy’s research has helped to ensure that the poorest third of children in the United States receive the full benefits of the Child Tax Credit.

    The recent expansion of the Child Tax Credit marks a sea change in how our country views its responsibilities towards family and children. The United States hasn’t created this significant of a program to alleviate poverty since the creation of Medicare and Medicaid in 1965.

    Since its founding in 2014, Columbia’s Center on Poverty and Social Policy (CPSP) has been producing consequential research on the impact that a universal child allowance would have on families and the United States economy. Their reports have driven the conversation on how the U.S. should care for its poorest families. According to the Center, the expansion of the Child Tax Credit has the potential to slash poverty rates.

    Columbia News caught up with Irwin Garfinkel, the co-director of CPSP, and Megan Curran, the director of policy for CPSP, to learn how the center has influenced this recent expansion of benefits, why the United States has made this change now, and how the expansion will help the neediest families in America thrive.

    Q: The Center on Poverty and Social Policy examines the issue of child poverty through data-driven research. When did you start doing this research? What led you both to tackle child poverty in the United States?

    Irwin Garfinkel, Center on Poverty and Social Policy

    Garfinkel: The Center started doing research on child allowances and child poverty from its inception in 2014. Personally, the very first paper I published was in 1968 and it was on negative income taxes and child allowances. Then I went on to get a PhD in economics and social work at the University of Michigan. 

    Later, in 1970, I went to work with the Institute for Research on Poverty at the University of Wisconsin. And in 1975, I became the director of the Institute. I’ve been at this a long, long time.

     

    Megan Curran, Center on Poverty and Social Policy

    Curran: I came to this center in a slightly different way than Irv in that I’ve been looking at poverty from the direct services perspective. In college, I was working with a neighborhood drop-in center in the Bronx. We linked families up with housing assistance or food assistance. Childcare was a huge issue there.

    If we think of poverty at its most basic core as not being able to meet your basic needs, the question that just kept coming back to me was that it shouldn’t have to be this hard. Why are we making it so hard for families and especially families with kids to simply live their lives? This notion formed the type of research that I do that tries to impact policy change. 

    Q: What was the major issue with the Child Tax Credit in the United States before the expansion? 

    Garfinkel: The issue was that the poorest third of children in the U.S. got a smaller tax credit than everyone else, and the poorest 10 percent of American children got nothing. That’s perverse. We pointed out the numbers that if you correct that disparity what that would do to reduce child poverty was powerful.

    Q: How has your research helped with expansion of the Child Tax Credit?

    Garfinkel: We did two major papers. In 2016, we did a Century Foundation report where Christopher Wimer and I worked with Sophie Collyer, David Harris, and Jane Waldfogel from the center. Then we worked with the Russell Sage Foundation on their special issue about policies to reduce poverty. We merged with another group, which included Luke Shaefer, Greg Duncan, Kathryn Edin, Timothy Smeeding, and Hirokazu Yoshikawa to write a paper on child allowance.

    Those two papers set the stage for the National Academy of Science child poverty study. The child allowance became the central proposal.

    We found that from running our numbers that the biggest reduction in child poverty came from the child allowance. Those numbers definitely drove the debate.

    Q: What does the most recent expansion of the Child Tax Credit do?

    Curran: The current expansion does three important things. It increases the benefit levels to make it a meaningful credit. A family could be eligible for about $3,000 a year if their child is between the ages of six to 17. It’s higher at $3,600 a year for families with children under six.

    The second big change is that it makes the full benefit now completely available to those with the lowest income. As Irv mentioned, our research showed how about 1/3 of all children had been excluded from this full benefit because their parents didn’t earn enough, so this is a big deal.

    The third major change is that it pays the benefits out on a regular monthly basis beginning now, rather than annually. This is a game changer in terms of how we support families; not only through the tax and benefits system in the U.S., but also in terms of what families can do with this money. They can start to count on it as a more regular part of their household budget because as you know, the rent comes every month, not once a year. This is the good news.

    The bad news is that the expansion is currently only in place for a very short amount of time, one year. The monthly payment part is set up for about six months at the moment. The rest will be distributed in a lump sum again next year. Many people are pushing for this to be a longer policy change.

    Q: What results do you anticipate from the expansion?

    Garfinkel: In the last decade, we’ve had an incredible amount of high quality research, mostly based on the Food Stamps program and the Earned Income Tax Credit.

    It shows that following those programs there were reductions in low-birth weight and neonatal mortality and increases in health and well-being of the children that continues into adulthood. They live longer. They’re healthier. They get more education. They earn more income and pay more taxes.

    We can infer that the Child Tax Credit expansion will have similar benefits.

    Most recently, the research that I’ve done is a benefit cost analysis of the child allowance. I’ve found that the child allowance will cost about 100 billion dollars annually, but will generate benefits over 800 billion dollars per year. This expansion is going to a big change for the poorest, but will benefit all the rest of us.

    Curran: Congress is always going to consider how much something costs. Making these payments does cost money, but as Irv was just saying, it essentially has a rate of return of eight times. We also found, at the center, that the new Child Tax Credit — combined with other key elements within the American Rescue Plan passed earlier this year — has the potential to cut child poverty in half in 2021, if all children and families receive what they are now newly eligible for.

    Q: What is the difference between the Child Tax Credit and a child allowance?

    Garfinkel: What we previously had was the Child Tax Credit. The reforms that Megan just described convert the Child Tax Credit into a child allowance by making it universal, making it the same benefit that everybody gets, and making payments monthly.

    Curran: A child allowance is the umbrella term for programs that countries use to make regular payments to families based on the presence and number of children in the home. It recognizes that there are costs associated with raising children, but it’s also a societal good that families are raising children. The U.S. has long been an outlier globally on this issue because we didn’t have one of these programs. Many other countries created these types of programs post-World War II.

    Q: Why has it taken so long to enact in the United States? Why is it happening now?

    Garfinkel: The first thing I would point out is the U.S. has always been a laggard in the provision of cash assistance. Before we became independent from England, we had “poor laws” where local governments took care of their poor, but we would often not provide for people who were deemed “able-bodied.” We were even stingier than England. In fact, England was for one period of time, very generous.

    However, this is a magic moment now.

    We have slowly been moving in the right direction. There has been a push for the child allowance within the Democratic Party, and now that Congress and the White House are Democrats, we’ve seen this new movement.

    Curran: It’s definitely a combination of events and of shifting political dynamics. Without the pandemic, frankly, I don’t think we would be in this place. It finally gave us a real push to reevaluate how we usually approach things. In the past, what we have tended to do is not just target by how much income you have, but then put conditions on access. You’d have to be below a certain income to be eligible but then you have to also be working a certain number of hours a week to get it. You’d have to be within a small window — not too much money but not too little. It becomes a maze to figure out whether or not you’re eligible. What ends up happening: too many children are left out.

    The pandemic has shown us that it doesn’t make sense to condition access to food assistance or medical care or housing on whether or not you have a job or how much money you have because those things can change on a whim. This crisis exposed the barriers that we were placing on families.

    Garfinkel: Megan is right about the pandemic. The murder of George Floyd and the Black Lives Matter movement also played a critical role in re-awakening the moral conscience of the nation.

    Q: The center is based in the School of Social Work, and most of you at the center have social work backgrounds. However, some others have backgrounds in economics, public health, and data science. How does this multi-disciplinary collaboration impact your research? Why is it important?

    Garfinkel: The different disciplines have different foci and different theoretical and conceptual frameworks and bumping up against those is productive. If you just talk to someone within your discipline, you’re likely to miss things. Psychologists have something to teach everyone, sociologist have something to teach everyone, economists have something to teach everyone. You get them all together, and you learn.

    Curran: Everything that I’ve done starting from my undergraduate degree, it’s all interdisciplinary. I think it’s always of value to look at a particular issue from multiple perspectives. We have that diversity of thought in the center itself, and then being situated within the School of Social Work and Columbia University. That perspective gives us tools to inform better policy.

    Q: Any final thoughts?

    Curran: Please tell your family and friends all about the new Child Tax Credit expansion and make sure that the kids in your lives are signed up. Go to https://www.whitehouse.gov/child-tax-credit/ for answers to all your questions. The payments are going to go out soon, but even if you’re not signed up yet, you can still get them. Tell any family with children in your life to take a look.

    Garfinkel: Even one year of benefits will do enormous good. But making the child allowance permanent will be an incredible achievement, cutting child poverty by nearly half and generating benefits over eight times the cost.

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  • There’s an unemployment cliff coming. More than 7.5 million may be pushed off it

    By: Greg Iacurci

    _____________________________________

    KEY POINTS

    • Federal unemployment programs that have paid jobless benefits since March 2020 are poised to end Sept. 6. It doesn’t appear Congress will extend them again.
    • Roughly 7.5 million people will lose benefits entirely at that time, per one estimate.
    • Those eligible to collect state unemployment insurance may continue to receive weekly payments past Labor Day. They would get $300 less per week.

    _____________________________________

    Millions of jobless Americans are poised to lose Covid-era income support in about a month’s time.

    This impending “benefits cliff” appears different from others that loomed this past year, when Congress was able to keep aid flowing after eleventh-hour legislative deals.

    There doesn’t seem to be an urgency among federal lawmakers to extend pandemic benefit programs past Labor Day, their official cutoff date.

    “There’s almost nobody talking about extending the benefits,” said Andrew Stettner, a senior fellow at The Century Foundation, a progressive think tank.

    Who’s impacted?

    The cliff will impact Americans who are receiving benefits through a handful of temporary programs.

    They include aid for the long-term unemployed, as well as the self-employed, gig workers, freelancers and others who are generally ineligible for state benefits.  

    More than 9 million people were receiving such assistance as of July 10, according to the Labor Department.

    About 7.5 million will still be collecting benefits by the time they end Sept. 6, Stettner estimates. They’d lose their entitlement to any benefits at that time.

    infographic

    Others who are eligible for traditional state unemployment insurance can continue to receive those weekly payments past Labor Day. Roughly 3 million people are currently getting regular state benefits.

    However, they’ll lose a $300 weekly supplement.  

    The average person would have gotten $341 a week without that supplement in June, according to Labor Department data. (Payments range widely among states — from $177 a week in Louisiana to $504 a week in Massachusetts, on average.)

    State benefits replaced about 38% of pre-layoff wages for workers in the first quarter of 2021, according to the Labor Department.

    The CARES Act expansions of unemployment benefits were unprecedented in the history of the unemployment insurance program, which dates to the 1930s.

    Congress has expanded payments in past recessions, too, to varying degrees.

    infographic

    During the Great Recession, for example, workers were able to collect up to 99 weeks of unemployment benefits — far more than the traditional 26 weeks (or less in some states). That aid ceased in December 2013, at which time 1.3 million workers lost benefits.

    During the pandemic, workers were poised to lose extended benefits last December and again this past March, but Congress intervened in both cases, most recently with the American Rescue Plan.

    “This is so many more people than have ever been cut off from something like this,” Stettner said of the looming cliff relative to past cutoffs.

    A recovering economy

    Of course, the economy has recovered more quickly than in past recessions. It’s now larger than it was before the pandemic, according to Commerce Department data released Thursday.

    Hiring is also up over the past few months. The economy added 850,000 new jobs in June, after 583,000 in May and 269,000 in April. However, the U.S. has yet to recover almost 7 million lost jobs versus pre-pandemic levels.

    Critics of expanded benefit programs believe they’ve led workers to stay home instead of looking for work, which has made it harder for businesses to fill openings and contributed to muted hiring.

    infographic

    There was about one unemployed person for every job opening in May, according to the Bureau of Labor Statistics.

    Twenty-six states ended their participation in federal unemployment programs over June and July, to try to encourage recipients to return to work — effectively moving up the benefits cliff for residents by about two to three months.

    “Businesses across the state continue to say they would grow and expand, if it wasn’t for the lack of workers,” Marcia Hultman, secretary of the South Dakota Department of Labor and Regulation, said in May. “Ending these programs is a necessary step towards recovery, growth and getting people back to work.”

    infographic

    With the $300 supplement, almost half of jobless workers (48%) make as much or more money on unemployment benefits than their lost paychecks, according to a recent paper published by the JPMorgan Chase & Co. Institute.

    The extra funds had a small impact on job-finding among workers, but didn’t significantly hold back the job market, according to economists Fiona Greig, Daniel Sullivan, Peter Ganong, Pascal Noel and Joseph Vavra, who authored the analysis.

    “We conclude that unemployment supplements have not been the key driver of the job-finding rate through mid-May 2021 and that U.S. policy was therefore successful in insuring income losses from unemployment with minimal impacts on employment,” they found.

    And though it’s still early, evidence so far doesn’t suggest the state policies immediately pushed people back into the workforce.

    Some economists argue pandemic-related factors, not benefits, are the primary reasons workers may not be returning to the workforce as quickly as anticipated.

    For example, parents may still not have adequate child care; those who can’t work from home may still be cautious for health reasons; workers may have relocated away from jobs, or changed industries, during the pandemic.

    At the same time, the delta variant threatens to complicate the recovery. The Covid strain is significantly more contagious than the original one and may make people sicker than other virus variants, according to a Centers for Disease Control and Prevention document reviewed by CNBC.

    There was a seven-day average of more than 62,000 new Covid cases as of Thursday, up from about 47,000 a week earlier, according to CDC data. The overwhelming number of hospitalizations and deaths are occurring among the unvaccinated. But it appears vaccinated individuals with breakthrough cases can still transmit the virus to others, according to the CDC.

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  • UK Green Party calls for universal basic income as government prepares to wind down furlough scheme

    The Green Party has reiterated its calls for a universal basic income to offer protection for all, as the government risks the livelihoods of millions of people by further winding down the furlough scheme tomorrow [Sunday 1 August].

    The Greens have warned that by cutting its contribution the government will lay more of the costs onto the employers in sectors that are already struggling to recover.

    Professor Catherine Rowett, Green Party work, employment and social security spokesperson and former MEP, said:

    “The furlough scheme has offered a vital lifeline to workers and employers up and down the country during this awful pandemic. Asking the employers to bear more of the burden will be the last straw for many businesses who are barely making ends meet.

    “Latest figures show that nearly 2 million people were still on the furlough scheme at the end of June [1]. It is extremely irresponsible of this government to cut its contribution when we know that certain sectors, in particular those in the arts and entertainment, are still struggling to operate properly, and poised at a moment that could make or break them. [2]

    “The government seems to be willing to throw the lives of millions into uncertainty, yet much of this anxiety and uncertainty could have been saved if a generous package of universal basic income had been introduced at the start of the pandemic, as a permanent measure to make sure that nobody is left high and dry. 

    “It would ensure that freelance workers are no worse off than those in regular employment, and that every single one of us has enough to meet our basic needs, to give us all a fairer  chance of weathering this storm together.” 

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  • Rep. Ilhan Omar Introduces Bills That Aim For Guaranteed Income

    Minnesota Rep. Ilhan Omar introduced two bills Friday that are intended to create a grant program to fund local income pilots, a national guaranteed income program, and to establish a new economic model that measures well-being.

    Omar formally introduced the Sending Unconditional Payments to People Overcoming Resistances to Triumph (SUPPORT) Act and the Genuine Progress Indicator (GPI) Act.

    “Poverty is a policy choice. For too long we have prioritized endless growth while millions are homeless, hungry or without healthcare,” said Omar. “The pandemic has laid bare these inequalities. We as a nation have the ability to make sure everyone has their basic needs like food, housing and healthcare met.”

    The SUPPORT Act will focus on the guaranteed income program of up to $1,200 per month for adults, and $600 for kids, following pilot programs across the nation. The GPI Act will provide an alternative economic metric to supplement GDP calculations and revamp economic policies by including socio-economic and environmental factors.

    The GPI Act is cosponsored by Reps. Jamaal Bowman, Cori Bush, Dwight Evans, Pramila Jayapal, and Marie Newman. The SUPPORT Act is cosponsored by the same group with the addition of Pramila Jayapal.

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  • A Fed-issued digital dollar could print money — for the people

    By: Sheila Bair

    The writer is former Chair of the FDIC and former Assistant Secretary of the U.S. Treasury for Financial Institutions.

    More and more informed observers are asking why, after 13+ years of the Federal Reserve’s increasingly aggressive monetary interventions, the benefits remain so skewed toward Wall Street over Main Street. The answer is simple: follow the money. Using its traditional tools, the Fed pumps money into the financial system, hoping it will make its way into the broader economy. But the Fed can’t control where the money goes or who financial institutions decide to lend to, and clearly, the primary beneficiaries have been investors and the ultra-rich. 

    Fortunately, new technology in the form of a Central Bank Digital Currency (CBDC) provides a mechanism for the Fed to distribute cash directly to working families.

    This would be a profound shift in the way the Fed has traditionally responded to economic crises, largely bypassing the financial system and channeling increases in money supply to the people who need it the most.

    For over a decade after the 2008-2009 financial crisis, the Fed kept money cheap and plentiful in a well-intentioned effort to revive the economy from that debacle. But the money wasn’t getting to consumers, which is why the Fed could never sustain its 2% inflation goal.

    That started to change last year when the government stepped up fiscal spending for pandemic relief programs such as supplemental employment insurance, economic impact payments (EIP), rental assistance, and others. These programs were largely funded by deficit spending enabled by the Fed’s purchases of massive amounts of government debt.

    As those trillions in new fiscal spending were absorbed into Main Street, voila, consumer prices started picking up (perhaps too much). This fiscal spending was more effective in getting help to working families. But even these fiscal programs were fraught with unnecessary political wrangling, overly complex requirements, and payment delays which stemmed from reliance on an inefficient and costly payments system to distribute the funds.

    A better way to get cash to people who need it

    CBDC would provide a better way.

    By utilizing distributed ledger technology, the Fed could quickly and cheaply get digital dollars to households in times of crisis.

    To be sure, such a system would need to be authorized by Congress and utilized only in severe economic conditions, triggered perhaps by a precipitous drop in employment or GDP.

    But with such a system of “auto-stabilizers,” families would not need to wait for the political system to wrangle over ad hoc relief programs, nor suffer costs and delays inherent in our outdated payments system. The Fed could distribute funds directly to digital wallets held by households, and/or use regulated digital payment providers to help consumers set up digital wallets and custody their CBDC.

    This would also promote financial inclusion. Digital wallets could be more accessible to unbanked or underbanked populations, who fear the complexity and fees too often tied to checking accounts. Congress could authorize the Fed to provide initial “seed money” to households as an incentive to set them up.

    While payments would be limited to households, indirect benefits would accrue to businesses, as they would provide emergency income for struggling families to pay rent, buy food, and other essential goods and services.

    By using a Fed-sponsored distributed ledger, the Fed could know the identity of the recipient, and track the money to make sure it reached its intended beneficiaries, providing strong controls against fraud.

    Importantly, the Fed would no longer be trying to boost the economy by lowering interest rates to incentivize more borrowing. When people lose their jobs and incomes, they don’t need more debt, they need cash to tide them over. Providing cash assistance could help wean our economy off the use of debt to sustain growth, and hopefully lead to an eventual normalization of interest rates, ending the economic distortions caused by so many years of ultra-low interest rates.

    Banking industry advocates such as the Bank Policy Institute argue against CBDC, fearing that it would disrupt banking by drawing money out of deposit accounts and into CBDC digital wallets. But this should not be a risk, particularly if the amount of CBDC per household was capped and was issued solely for government emergency support payments. Such a system could actually prove beneficial to banks as it would reduce the risk of consumer defaults during severe economic downturns. Moreover, CBDC could always be converted to traditional fiat currency and deposited into bank accounts, if banks offered households with sufficiently attractive terms. And of course, businesses and other institutions would still need banks to hold their deposits and service their needs.

    Stablecoins can co-exist with CBDC

    Another argument, used both for and against CBDC, is that it would undermine privately-sponsored stablecoins — a form of cryptocurrency whose value is tied to and backed by fiat currency. Some fear that privately-sponsored stablecoins could eventually displace central bank money. Thus, they support CBDC as a way to crowd out these private initiatives. For the same reason, supporters of private stablecoins advocate against a CBDC in the U.S.

    I support properly regulated private stablecoins. (Disclosure, I am on the board of Paxos, a regulated trust which has one.) But I also think they can co-exist with CBDC, particularly if CBDC issuance is limited to household emergency payments. Our payments system has always relied on a combination of private and Fed-sponsored facilities. There is no reason to think CBDC would kill responsible innovation among private stablecoin issuers. Indeed, parallel private sector efforts to develop stablecoins could help inform and complement the Fed’s use of this technology.

    A final argument against CBDC as a monetary tool is that it could increase the risk of inflation. To be sure, the impact on consumer spending would be much more direct than the Fed’s current tools. But that is a strength, not a weakness. Given the greater efficiency of CBDC, smaller increases in money supply would be necessary to boost consumer demand. And should consumer price inflation escalate, CBDC would provide the Fed with an elegant solution: pay interest on CBDC to give households an incentive to save, not spend it.

    It is time for a fundamental rethink of how we use monetary policy to support our economy. Incentivizing borrowing with cheap money is inherently unstable.

    We can see the results: unprecedented levels of government and corporate borrowing, reckless speculation, and nosebleed valuations across a broad spectrum of assets. We all hope (pray) that accelerating consumer price inflation is transitory. But if the Fed is forced to raise rates to tame it, the impact on corporate and government borrowing costs could be disastrous, as would the negative impact on asset prices to financial stability.

    It’s hard to see how we get out of our current predicament. But it’s easy to see how technology can, over the longer term, give us an alternative to low interest rates that can get our country out of this debt trap. If we are going to print money to support our economy, then let’s print it for the people. CBDC can provide the way.

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  • Northern Ireland gives out £100 universal prepaid cards to aid high street recovery

    Economy minister hopes prepaid card’s September launch will help bricks-and-mortar businesses struggling after lockdowns.

    By: Zoe Wood

    Adults in Northern Ireland are being handed free shopping vouchers as part of a £145m plan to breathe life back into high streets scarred by lockdown closures.

    Gordon Lyons, the country’s economy minister, said everyone aged 18 and over would be eligible to receive a prepaid card to spend in local shops and restaurants.

    “It would mean up to 1.4 million people would have an extra £100 each to spend on our high streets rather than online,” said Lyons. “This uplift was what our local businesses needed and deserved … to bring many more customers back through their doors.”

    The scheme, which starts in September, is based on similar initiatives in Jersey and Malta and is a “helicopter money” policy, a term used by economists to describe doling out cash to households to stimulate spending. The US government has similarly been handing out $1,400 stimulus cheques as part of its Covid response.

    Since last year the Resolution Foundation, the influential thinktank, has been calling on the chancellor, Rishi Sunak, to consider handing out shopping vouchers to British shoppers. The British Independent Retailers Association is among those backing a petition calling for a “shop out to help out” scheme to assist shopkeepers in getting back on their feet.

    Sunak, however, is thought to believe there is adequate financial firepower for consumer spending after British households amassed savings worth nearly £200bn during lockdown.

    Bricks-and-mortar retailers had been struggling to make ends meet before the health crisis as fewer shoppers visited their local parades and malls, and business rates increased. The lockdowns then accelerated the move towards online shopping.

    Retail NI, the trade body which represents independent retailers, described the shopping voucher scheme as a “win-win for members and our high streets”.

    “It will be a significant spending boost for struggling independent retailers as we progress down the long road towards recovery,” said Glyn Roberts, its chief executive. He said 70p in every pound spent with an independent store is recycled around the economy, supporting local producers, farmers and manufacturers.

    “It is vital that consumers make a special effort to spend this prepaid card with local traders to ensure the widest possible boost to our economy,” he said.

    Applications for the prepaid card will be checked against the electoral register, and Lyons urged adults who were not registered to vote to do so now.

    The decision to launch the card in September was based on research that indicated autumn was the best time to stimulate spending in town and city centres.

    “The results of the consumer panel showed that there is evidence that the scheme will encourage shoppers back on the high street, to support local independent businesses and spend their card in those sectors that have faced difficulties trading in the past year,” said Lyons. Many respondents said it would encourage them to visit physical locations.

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  • Pandemic Aid Programs Spur a Record Drop in Poverty of Almost 45%

    The most comprehensive study yet of the federal response to the pandemic shows huge but temporary benefits for the poor — and helps frame a larger debate over the role of government.


    By: Jason DeParle

    The huge increase in government aid prompted by the coronavirus pandemic will cut poverty nearly in half this year from prepandemic levels and push the share of Americans in poverty to the lowest level on record, according to the most comprehensive analysis yet of a vast but temporary expansion of the safety net.

    The number of poor Americans is expected to fall by nearly 20 million from 2018 levels, a decline of almost 45 percent. The country has never cut poverty so much in such a short period of time, and the development is especially notable since it defies economic headwinds — the economy has nearly seven million fewer jobs than it did before the pandemic.

    The extraordinary reduction in poverty has come at extraordinary cost, with annual spending on major programs projected to rise fourfold to more than $1 trillion.

    Yet without further expensive new measures, millions of families may find the escape from poverty brief. The three programs that cut poverty most — stimulus checks, increased food stamps and expanded unemployment insurance — have ended or are scheduled to soon revert to their prepandemic size.

    While poverty has fallen most among children, its retreat is remarkably broad: It has dropped among Americans who are white, Black, Latino and Asian, and among Americans of every age group and residents of every state.

    “These are really large reductions in poverty — the largest short-term reductions we’ve seen,” said Laura Wheaton of the Urban Institute, who produced the estimate with her colleagues Linda Giannarelli and Ilham Dehry. The institute’s simulation model is widely used by government agencies. The New York Times requested the analysis, which expanded on an earlier projection.

    The finding — that poverty plunged amid hard times at huge fiscal costs — comes at a moment of sharp debate about the future of the safety net.

    The Biden administration has started making monthly payments to most families with children through an expansion of the child tax credit. Democrats want to make the yearlong effort permanent, which would reduce child poverty on a continuing basis by giving their families an income guarantee.

    Progressives said the new numbers vindicated their contention that poverty levels reflected political choices and government programs could reduce economic need.

    “Wow — these are stunning findings,” said Bob Greenstein, a longtime proponent of safety net programs who is now at the Brookings Institution.

    “The policy response since the start of the pandemic goes beyond anything we’ve ever done, and the antipoverty effect dwarfs what most of us thought was possible.”

    Conservatives say that pandemic-era spending is unsustainable and would harm the poor in the long run, arguing that unconditional aid discourages work and marriage. The child tax credit offers families up to $300 per child a month whether or not parents have jobs, which critics call a return to failed welfare policies.

    “There’s no doubt that by shoveling trillions of dollars to the poor, you can reduce poverty,” said Robert Rector of the Heritage Foundation. “But that’s not efficient and it’s not good for the poor because it produces social marginalization. You want policies that encourage work and marriage, not undermine it.”

    Poverty rates had reached new lows before the pandemic, Mr. Rector added, under policies meant to discourage welfare and promote work.

    To understand how large the recent aid expansion has been, consider the experience of Kathryn Goodwin, a single mother of five in St. Charles, Mo., who managed a group of trailer parks before the pandemic eliminated her $33,000 job.

    Without the pandemic-era expansions — passed in three rounds under both the Trump and Biden administrations — Ms. Goodwin’s job loss would have caused her income to plunge to about $29,000 (in jobless benefits, food stamps and other aid), leaving her officially poor.

    Instead, her income rose above its prepandemic level, though she has not worked for a year. She received about $25,000 in unemployment benefits (about three times what she would have received before the pandemic) and $12,000 in stimulus checks. With increased food stamp benefits and other help, her income grew to $67,000 — almost 30 percent more than when she had a job.

    “Without that help, I literally don’t know how I would have survived,” she said. “We would have been homeless.”

    Still, Ms. Goodwin, 29, has mixed feelings about large payments with no stipulations.

    “In my case, yes, it was very beneficial,” she said. But she said that other people she knew bought big TVs and her former boyfriend bought drugs. “All this free money enabled him to be a worse addict than he already was,” she said. “Why should taxpayers pay for that?”

    The Urban Institute’s projections show poverty falling to 7.7 percent this year from 13.9 percent in 2018. That decline, 45 percent, is nearly three times the previous three-year record, according to historical estimates by researchers at Columbia University.

    The projected drop in child poverty, to 5.6 from 14.2 percent, amounts to a decline of 61 percent. That exceeds the previous 50 years combined, the Columbia figures show.

    In addition to there being nearly 20 million fewer people in poverty, the institute projects about 10 million fewer in “near poverty,” with incomes of 100 to 150 percent of the poverty line. Under the yardstick the Urban Institute used (the government’s Supplemental Poverty Measure), the poverty line for two adults and two children with typical housing costs is about $30,000.

    “The decline in ‘near poverty’ is significant because families in that income range, like people in poverty, suffer high rates of food insecurity and other hardships,” said Elaine Waxman, an Urban Institute researcher.

    Poverty fell across racial and ethnic groups but most for people who are Black and Latino, meaning the gap with white Americans narrowed. The Rev. Starsky Wilson, the president of the Children’s Defense Fund, credited the racial protests of the past year for prompting lawmakers to act. “It’s no coincidence that the effort at mobilizing resulted in investments that reduced poverty and narrowed disparities,” he said.

    Poverty fell less among Asian Americans, leaving them more likely than Black Americans to be poor. The institute found that was partly because they tended to live in more expensive areas.

    Jessica Moore of St. Louis said the expanded aid helped her make a fresh start.

    A single mother of three, Ms. Moore, 24, lost work as a banquet server at the pandemic’s start but received enough in unemployment insurance and stimulus checks to buy a car and enroll in community college. She is studying to become an emergency medical technician, which promises to raise her earnings 50 percent.

    “When you lose your job, you don’t expect benefits that are more than you were making,” she said. “It was a pure blessing.”

    Payments also went to people who kept their jobs, which helps explain why “near poverty” fell. The beneficiaries included John Asher of Indianapolis, who once served prison time for selling drugs but is now sober and earning $500 a week as a maintenance man. With $3,200 in stimulus checks, Mr. Asher, 49, was able to leave a boardinghouse, rent an apartment and take custody of an autistic son, who he feared would go to foster care.

    But he said he distrusted “the crooked government” and urged poor people to help themselves. “If you want to change your life, you have to get up and do something — not sit home and get free money,” he said.

    Leah Burgess, who also kept her job, drew the opposite lesson from the help she received. A part-time chaplain at a school outside the District of Columbia, Ms. Burgess, 43, is studying for two master’s degrees at Howard University. With three children, she and her husband, who was also a student, received about $18,000 in stimulus checks and expanded food stamps.

    The aid helped them eat better and worry less, said Ms. Burgess, who called the support a foundation for a more just society. “If our resources in a pandemic could change millions of people’s lives, then what’s stopping us from continuing to do that?” she said.

    The institute projected spending on core programs would more than double, to about $13,900 per family from $5,700 in 2018. The stimulus checks removed more than 12 million people from poverty. Food stamps ended poverty for nearly eight million people and unemployment aid for nearly seven million.

    Critics said the aid was poorly devised, noting that many people received more from unemployment benefits than they had earned on the job. “We spent like we’ve never spent before and we reduced hardship for most people quite dramatically,” said Bruce D. Meyer, an economist at the University of Chicago. “But this came at a very high and unnecessary cost.”

    While Democrats and Republicans remain divided over future safety net spending, a bipartisan group of senators agreed Wednesday on about $550 billion in new spending for roads, bridges and physical infrastructure projects, and the Senate advanced the package in an initial vote.

    How Government Relief Might Have Helped Two Different Families

    At the request of The New York Times, the Urban Institute illustrated the safety net’s effects on two hypothetical Pennsylvania families. The first shows that increased aid would lift a single mother out of poverty in 2021 even if her earnings fell in half. The second shows that the aid would lift a married couple out of “near poverty” even if their earnings remained the same.

    Measuring poverty is contentious, and some conservatives accuse the left of exaggerating the recent poverty reduction to justify more spending. They say the government’s methodology undercounts the benefits people receive and overstates what it takes to meet basic needs. The Urban Institute modified the government’s approach to correct for undercounting, but Ms. Wheaton said methodological issues did not change the conclusion that poverty fell since “we are applying a consistent measure to both years.”

    If there are biases in the institute’s methodology, they lean in offsetting directions. Using a 2018 baseline may modestly overstate the recent poverty reduction, since poverty was lower when the virus hit. But the study, which was funded by the Robert Wood Johnson Foundation, also understated the poverty reduction by omitting several large new programs, including $45 billion in rental aid.

    Robert Doar, the president of the conservative American Enterprise Institute, warned that the poverty numbers were being used to attack a successful social compact established a quarter-century ago with the overhaul of the welfare system. Under a new system of time limits and work requirements, payments to poor people without jobs fell, but subsidies for low-wage workers grew. Mr. Doar noted that while liberals warned child poverty would grow, by 2019 it had hit a prepandemic low.

    “We required work, we rewarded work, and poverty rates were lower than had ever been,” he said. “The Democrats want to ignore all that and just send everybody a check.”

    The evidence of falling poverty in 2021 may seem at odds with reports of increased hunger and other pandemic-era hardships. But the trends can coincide, as Ms. Goodwin’s experience shows. That is because poverty is based on annual income, and help has fluctuated greatly from month to month as a result of policy changes and administrative bottlenecks. Many families have swung between moments of surplus and desperation.

    After six years on the job, Ms. Goodwin was shocked to find herself laid off (“that was really a slap in the face”) and distraught when her request for unemployment benefits went unanswered for a month. Fearing she might lose the children to foster care, she drove them 800 miles to Niagara Falls with thoughts of them all jumping in.

    Since then, her jobless benefits swung from a high of $920 a week (much more than she had received on the job) to a low of $320 (much less) as federal policy changed. She lost food stamps for several weeks and fed the children smaller portions. She waited months for stimulus aid after the payment went to a closed bank account.

    “It was all very unreliable,” she said.

    A low point came last fall, when her jobless benefits bottomed out. The trailer park where she once had worked evicted her.

    Ms. Goodwin said she had been looking for work but it was harder than the “Help Wanted” signs would suggest. Fast-food chains say she is overqualified, and the pandemic-era closure of child care centers complicates her logistics. (She previously worked at home.) She started a sideline making church T-shirts and is an apprentice at a nail salon, where she hopes to get hired.

    At once a beneficiary and critic of aid, Ms. Goodwin said the safety net, however imperfect, had lived up to its name. “It enabled us to stay out of poverty — that’s absolutely safety,” she said.

    __________________________________________

    Article originally appeared in New York Times: https://www.nytimes.com/2021/07/28/us/politics/covid-poverty-aid-programs.html

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  • Are stimulus checks and the Child Tax Credit payments leading to an increase in inflation?

    Consumers are facing sharp increases in prices at check-out, but are these related stimulus checks and the new payments for the Child Tax Credit? 

    By: Maite Knorr-Evans

    Many conservative policymakers and economists blame the third stimulus check and now the Child Tax Credit payments for driving up prices. However, when inflation from devalued currency drives up prices, the percent increase would normally be similar across the board.

    That is not what is currently being seen in the US economy.

    Since last June, the Consumer Price Index, which measures fluctuations in price, has increased six percent. This is the largest year-over-year increase in thirteen years. But, many economists monitoring these fluctuations are not shocked, as prices of many goods hit their lowest levels in many years in 2020.

    How has the pandemic impacted prices?

    The pandemic had dramatic impacts on consumer spending: what people wanted to buy and when they wanted to buy it, and how often they would make purchases.

    For example, those working from home bought new equipment to work more comfortably, and many parents spent more on childcare and educational materials. All of these changes in preferences led to supply chain issues, shortages, and historical movement in prices.

    One product that has been impacted is gasoline. Few consumers could rejoice in the low prices seen early in the pandemic because many commuters were now working from home.

    However, as preferences begin to return to their pre-pandemic status, consumers are feeling the impact of broken and bottlenecked supply chains.

    Take gas. Several refineries in the United States did not survive the pandemic and opted to close down permanently. So now, as the economy reopens, people return to work or take a summer road trip, demand has surged. But, the industry’s ability to refine oil and transport gasoline has not reached the levels seen before the pandemic — creating a shortage of supply.

    What happens when there is high demand and short supply? Prices increase.

    Additionally, part of the increases in prices seen in other sectors relates to the surging price of gasoline. Companies transporting their products from factories or warehouses to stores or households are passing along the increase in transportation costs to the consumer.

    Which sectors have seen the largest increases?

    The Bureau of Labor Statistics released the Consumer Price Index for June, which showed an average increase of .9% over May levels and a 6.1% increase since June 2020.

    Industries and sectors with the largest increases include ‘Fuel Oil‘ and ‘Gasoline,’ which both have increased in price by more than 45% compared to last June. However, the price of electricity and gas used at home only went up 6.5%.

    The used car market has also seen dramatic price increases, with consumers paying more than 45% more across the sector. These increases have been widely reported on and relate to breakdowns in supply chains.

    In an interview with Rochester First, a Garettt Wagner, a member of the New York State Society of CPAs, explained that in the car industry, “the big supply chain issue they’re having is microchips that go in the new cars. They can’t produce as many new cars as they want to, which is driving down the supply of new cars, which – in turn – drives up the price.”

    Wagner went on to mention that “the demand for used cars is increasing and the supply isn’t, so that’s also driving up the price for those used cars.”

    For folks like Wagner, these increases are part of the economy finding its equilibrium after severe economic shocks.

    What has Jerome Powell said about inflation?

    ?Chairpersons of the Federal Reserve, Jerome Powell, testified before Congress last week to update lawmakers on the economic recovery.

    Many questions over inflation were lodged at Powell, who reiterated his belief that these increases in prices are temporary. Nevertheless, the Chairmen also stated that he is ready to begin increasing interest rates to curb inflation, should it be necessary.

    Many economists warn against these increases saying they can disproportionately hurt low-income households.

    However, ProPublica reported in April that increasing rates might help the average household increasing their savings and the return they see on their monthly statements. With higher interest rates set by the Fed, some banks offer higher interest rates on savings accounts.

    When interest rates are higher, it means that the price of borrowing money is higher. To encourage bank members to save, banks can offer higher interest rates to incentivize members to keep their money from being spent. Then, the bank invests this money to make a profit and cover the higher interest rate they offered.

    Bolstering this point, the chief economist at Moody’s Analytics, Mark Zandi, stated that “High-wealth households do much better in a low-rate environment than lower-wealth households do.” Zandi says that these low-interest environments also contribute to inequality by “increasing the wealth of people who are well off.”

    This week, decision-makers at the Federal Reserve are set to meet and discuss and adapt their monetary policy which could include the raising of interest rates.

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  • $1,000 bonus stimulus checks are being sent to teachers in some states

    By: Katherine Rodriguez

    If you are wondering if the federal government is sending out a fourth stimulus check at this time, chances are, the answer is no.

    However, some states and local school boards are using federal stimulus money to give a one-time $1,000 bonus payment to teachers as a way to thank them for their efforts during the COVID-19 pandemic.

    It also is to help retain teachers and staff, as educators have had to balance virtual and in-person teaching while schools opened and closed.

    Some are, however, questioning whether this is the best way to use federal stimulus funding.

    So far, Michigan, Georgia and Florida already have disbursed or agreed to send payments to their teachers.

    Michigan sent out $500 in hazard pay bonuses for teachers and $250 for staffers at the end of February, costing the state $73 million.

    Georgia issued a $1,000 “retention bonus” in March to about 230,000 K-12 public school teachers and staffers. The money came from the $660.6 million in stimulus money the state received, and the program will cost $230.5 million.

    Florida proposed a similar payout to teachers and principals in March as part of the state budget. An estimated 175,000 teachers and 3,600 principals in the state will start receiving a “thank you” bonus of $1,000 next month (but other school staffers were left out).

    The money for the bonuses came out of $216 million in federal stimulus money, and the U.S. Department of Education this week told Florida education officials that using stimulus relief for this would “conflict” with federal guidelines for aid spending.

    However, according to a report, the governor still expects Florida teachers to receive the $1,000 payments when the school year begins.

    Colorado, California, Texas, and Tennessee also have deliberated about the use of these bonuses for teachers.

    Meanwhile, a bill in Hawaii to give teachers a one-time $2,200 payment was vetoed by the governor.

    New Jersey, New York and Pennsylvania are not currently among the states proposing or paying out stimulus bonuses to its teachers and staff at this time.

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  • South Africa: Black Sash launches a report into the implementation and impact of the Covid-19 SRD Grant

    By: Theresa Edlmann, Engenas Senona, Erin Torkelson and Wanga Zembe

    On Sunday 25 July 2021 President Cyril Ramaphosa announced that the R350 Covid-19 Social Relief of Distress (SRD) Grant will be reinstated until March 2022.

    The grant’s eligibility criteria have also been expanded to include unemployed Caregivers who receive the Child Support Grant (CSG) on behalf of children. About 95% of CSG recipients are women and were excluded in the application criteria for the initial round of the Covid-19 SRD grant.

    The Black Sash has compiled a report into the implementation and impact of the Covid-19 SRD Grant. The report will be publicly launched on Tuesday, 27 July 2021.

    The report, Social Protection in a Time of Covid: Lessons for Basic Income Support, outlines some of the challenges faced by those who did (and did not receive) the R350 grant. It also illustrates the impact the small monthly grant makes in many households across South Africa.

    The report strongly recommends that the Covid-19 SRD Grant becomes a permanent form of Basic Income Support (BIS) for those aged between 18 and 59 who have little to no income – and that this support is linked to the food poverty line.

    It recommends ways for SASSA to improve the grant’s application system, the appeals and payment processes, and to develop a more effective communication strategy with applicants and beneficiaries.

    At its inception, the Covid-19 SRD Grant was an unprecedented moment in the history of social assistance in South Africa. From May 2020, South Africans between 18 and 59 who had previously been excluded from receiving social grants were eligible to receive R350 per month. The grant was extended to the end of January 2021 and again to the end of April 2021.

    By July 2020 about 5.6 million people had been approved for the grant, at a cost of R4.8 billion per month. Additionally, about 7 million people who received Child Support Grants on behalf of children were given a fixed amount of R500 per month between June and October 2020 – the Caregiver grant. Through the addition of these two programmes, social assistance in South Africa covered 71% of all households at its peak.

    However, there were critical eligibility exclusions as well. The R350 grant excluded any 18- to 59-year-olds already registered on a national database (SARS, UIF, NSFAS even if the registration was out of date) or who received any money at all into their bank account (even R50). Refugees and special permit holders only became eligible for the grant in September 2020 after litigation. The R500 Caregiver grant ended in October 2020 and was not renewed.

    The application process

    Many people, particularly the elderly and those in rural areas, did not have access to mobile phones, airtime and data to apply for their grants online. Approval was managed centrally by a GovChat team housed within the SASSA national office. People whose applications were rejected could appeal. At no stage was there a fixed time period for the processing of either applications or appeals.

    The next hurdle was accessing the money once the grant was approved.

    The payment system was not very efficient and recipients often waited months for their first payment or skipped months. People who did not have bank accounts or the capacity to access their SRD grant via an e-wallet system, were forced to wait in very long queues at South African Post Offices (SAPO) in the hope of being paid their grant.

    These people, amongst the poorest in the country, often faced significant challenges getting to a SAPO branch that paid out this type of grant — only to find that the office had run out of cash or that the queues were so long they never even made it into the building.

    When grantees received their money, most found R350 was too little to meet their monthly needs. During this period, most people we interviewed experienced dramatic changes to their diets, skipping meals, going to bed hungry, or eating only tea and bread. While the grant might have prevented starvation, it did not adequately address the levels of hunger experienced by the poorest families in the country.

    It was particularly challenging that SASSA required all grant claimants to have zero money coming into their bank accounts. If a family member put even R50 into the SRD grant recipient’s bank account, that would exclude them from being eligible for the Covid-19 SRD grant the following month.

    Lockdown also disrupted and weakened people’s reciprocity networks. Many lost jobs and livelihoods, others faced job insecurity. The family members, neighbours and friends who previously were able to help were no longer available to, because they too were faced with precarity.

    Creating a platform for a Basic Income Grant

    In rural areas, the highly technical application system for the Covid-19 SRD grant was hard and unfamiliar for many people, who could only get help from civil society organisations because many government offices were largely closed during this time. The grant payments at SAPO branches were often out of the way and far from where people live.

    The inequity between rural and urban areas has been a longstanding problem inherited from colonialism and apartheid. It was perpetuated by the assumption that everyone could be accommodated equally by a single system. South Africa is a highly differentiated society; any “universal” system exacerbates the challenges that many families and communities face.

    Despite these many challenges and hardships, the introduction of the Covid-19 SRD grant drew people who had previously been excluded from state assistance grants into the social protection network, creating a platform for a Basic Income Grant in the future.

    The findings of our research show the urgent need to introduce permanent Basic Income Support. The application and distribution systems must be accessible and administered in a way that people are not met with unnecessary, time-consuming, and expensive bureaucratic hurdles with no rural and urban differentiation. Hurdles such as disqualification upon receiving income in bank accounts or exclusion due to outdated databases need to be urgently addressed.

    At the barest minimum, the grant should meet the food poverty line, currently at R585, so all people living in South Africa can afford to eat.

    Theresa Edlmann works at the Black Sash. Engenas Senona is a Social Protection Expert. Dr Erin Torkelson is with Durham University. Dr Wanga Zemba-Mkabile is with the South African Medical Research Council.

    Views expressed are not necessarily those of GroundUp.

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  • Gyeonggi governor pledges to distribute universal basic income if elected president of South Korea

    Gyeonggi Province Gov. Lee Jae-myung, the front-running presidential contender for the ruling Democratic Party, made a campaign pledge Thursday to distribute universal basic income of up to 2 million won (US$1,736) per year to all citizens.

    “Within the (five-year) term of the next administration, (I) will provide 2 million won in basic income to each young person every year and 1 million won each to the rest of the citizens” Lee said in a press conference at the National Assembly in Seoul.

    “The end goal would be paying 500,000 won per month, the equivalent to what is paid to those in the bottom income bracket currently, but it will be (practically) impossible to achieve the level within the term due to financial conditions,” Lee noted.

    Under the road map laid out by Lee, the first basic income of 250,000 won per person, in the format of expirable provincial currencies, will be distributed in 2023 and the payment will be expanded by up to four times before the end of the five-year presidential term.

    To some 7 million young people aged between 19 and 29, an additional yearly basic income of 1 million won will be paid, he noted.

    To that end, a budget of some 50 trillion won would be sourced by rearranging budget spending and priorities, rolling back tax discounts and adopting other austerity measures, the governor said. He also plans to introduce new taxes on land holdings and carbon emissions to bankroll the basic income payment.

    “By installing a presidential committee on basic income, I will win support (from the public) before designing and implementing the basic income scheme in stages,” he said.

    The Gyeonggi governor has been at the forefront of the country’s growing debate on basic income, anchored on the idea of providing a government-ensured income enough to meet citizens’ basic material needs against the backdrop of increasing job displacements in the era of the fourth industrial revolution.

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  • The child tax credit is blowing up on TikTok. That should tell lawmakers something.

    The videos of parents getting their checks aren’t just a fun meme — they suggest a path for making the one-year policy permanent.

    By: Dylan Matthews

    Enter the child tax credit, which was greatly expanded temporarily in President Joe Biden’s American Rescue Plan, with monthly payments hitting households starting on July 15. The sudden deposits — of up to $250 per child ages 6-17, and $300 per child under 6 — were such a delight to many parents that the hashtags #childtaxcredit and #childtaxcredit2021 blew up on TikTok, with tens of millions of views under each as of this writing.

    Paul Williams, an economist and writer, has been compiling some of the best posts (many incorporating Usim E. Mang’s popular “Alors on Danse” dance) in a Twitter thread.

    I’m partial to @yellowha’s mother-son version:

    https://twitter.com/i/status/1415785452498563074
    https://twitter.com/i/status/1415788867647643650

    And the account @wifeandmomlife’s, set to the soul classic “Bound” by the Ponderosa Twins Plus One:

    https://twitter.com/i/status/1415784531009937413
    https://twitter.com/i/status/1415784605425221634

    This is a continuation of a trend we also saw with the stimulus checks of April 2020, December 2020, and March 2021 — when the government sends out cash like this, outside of the normal tax return process and to a larger population than those affected by programs like SNAP/food stamps or Section 8 housing vouchers, that policy penetrates the public consciousness. The checks get memed. People post dance videos about them.

    As someone who supported those stimulus payments, and strongly supports making the new child tax credit payments permanent and easy to access, this is tremendously encouraging stuff. It implies that check-based programs can avoid some of the worst pathologies of American government, and unlock one of the most powerful, and positive forces in politics: policy feedback.

    Checks are moving us past the submerged state

    Usually, when the US government decides to help people, it does so in a veiled, even inscrutable way.

    Take housing. There is no government agency whose website you can go to, fill out a form, and receive, say, a $10,000 check to help you with a down payment for a house.

    Instead, there are obscure measures and opaque institutions that aim to help. There’s the Federal Housing Administration, which insures some mortgages in the hope of making it easier and cheaper for homebuyers to get a loan. That agency runs two quasi-governmental corporations, Fannie Mae and Freddie Mac, that bundle mortgages and sell them to investors, in the hope of indirectly making your mortgage cheaper. It also offers a tax deduction for your mortgage interest, once you buy a house — but only if you itemize your deductions.

    That system of indirect government interventions that are obscure or invisible to the average citizen are part of what Cornell political scientist Suzanne Mettler calls “the submerged state.”

    The obscurity of the submerged state, Mettler argues, has major costs for our democracy. It erodes public belief in the effectiveness of government by hiding from view the government benefits voters receive.

    Another example: Middle-class Americans who got subsidized student loans to pay for college, and deduct mortgage interest from their taxes, are getting government benefits, too — but those benefits aren’t perceived the same way as, say, Social Security.

    In addition to keeping government’s role in improving lives hidden, the submerged state has another major cost. Georgetown political scientists Don Moynihan and Pamela Herd have argued compellingly that submerged state-like schemes impose major “administrative burdens” on low-income people, from work requirements in programs like food stamps to the burden of navigating the earned income tax credit’s complex parameters.

    Johns Hopkins’s Steven Teles has called this problem “kludgeocracy” — a government held together through “inelegant patch[es] put in place to solve an unexpected problem” rather than designed to work cleanly from the start. Teles argues this piecemeal approach also leads to exorbitantly high compliance costs, makes government administration more difficult, and makes it easier for businesses to extract rents from the government.

    This problem has, for years, been a major concern for people who study American government.

    What’s striking about the child tax credit expansion, and the stimulus checks before it, is how completely it rejects the submerged state model. The payments are not hidden or obscure to their beneficiaries: They take the form of a big fat check in the mail, or a big, sudden deposit in your bank account. The IRS also mailed recipients letters explaining they were going to get the money.

    What’s more, the payments all happen at once, making them a natural thing to post about on social media, where your friends will be going through the same thing and find it relatable.

    This is not, of course, to say that the rollout of the child tax credit was perfect. The system for signing up people who don’t file taxes was far too difficult to use. But the process has been much more accessible than most government programs. If something’s a meme on TikTok, it pretty much definitionally is not part of the submerged state.

    How policies can create new constituencies

    Precisely because the child tax credit expansion is not very submerged, it could unlock political dynamics that allow it to survive past 2021. This gets at a powerful and intuitive idea from political science: policy feedback.

    Berkeley political scientist Paul Pierson, in his classic 1994 book Dismantling the Welfare State? and 1996 paper “The New Politics of the Welfare State,” has demonstrated that once a welfare policy is enacted, and enough people who benefit from it are aware of it and able to defend it, that policy can be quite difficult to roll back.

    “People who are receiving benefits, they’re going to react pretty strongly to that being taken away from them,” Pierson told me in 2017, when precisely these dynamics were stopping Republicans from repealing the Affordable Care Act. “A taxpayer is paying for a lot of stuff and cares a little bit about each thing, but the person who’s receiving the benefits is going to care enormously about that.”

    There’s reason to think this dynamic has cooled a bit in recent years, as parties have become more ideologically intense and polarized. While the Affordable Care Act was not repealed, in large part because seven Senate Republicans were unwilling to repeal the ACA’s expansion of Medicaid coverage, it still came close, which never happened to earlier programs like Social Security or Medicare.

    Now, the child tax credit expansion is set to expire within a year. Given its tremendous impact on child poverty, making it permanent should be a priority for Democrats. Considering how polarized Congress is, and its status quo bias, one shouldn’t be too confident about the prospects of a permanent expansion.

    That said, a policy with a strong, vocal base of beneficiaries who can advocate for it is a strong policy. And, in total seriousness, the TikTok memes about the child tax credit give me hope that the policy is building that kind of base of support. Look at how delighted all these parents are — and just think how furious they’d be to have this support taken away.

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  • Child Tax Credit 2021: Here’s how families say they’ll use “basic income for kids”

    Starting Thursday, the parents of 60 million U.S. children on Thursday began receiving monthly checks through the expanded federal Child Tax Credit. What lessons can be learned for UBI?

    By: AIMEE PICCHI

    The parents of 60 million U.S. children on Thursday began receiving monthly checks through the expanded federal Child Tax Credit, a historic relief measure geared toward families of modest means. The money is sorely needed given the ongoing financial stresses from the pandemic, some parents told CBS MoneyWatch.

    How people might use the funds has sparked debate, with some critics calling it a “middle-class boondoggle” or worrying that it might discourage low-income parents from seeking work. Proponents say the measure is essential at a time households face rising prices on groceries, gas and other necessities as well as the lingering financial impact of the pandemic. 

    Seven parents who spoke with CBS MoneyWatch said they plan to spend the money on goods and services for their children, ranging from back-to-school supplies to extras like gymnastics classes for a teenager with aspirations of joining her high school cheerleading team. Many also expressed hope that the monthly payments would continue beyond December, when the last check is due to hit accounts. 

    “Right now, I was in a desperate situation, wondering would I get his back-to-school stuff or food,” said India Hatcher, 37, a police dispatcher who lives in Atlanta and is receiving $250 per month under the CTC for her 11-year-old son. “I can get his uniforms, his supplies and it helps — it’s not a million dollars, but for some people, like myself, that doesn’t have anybody, it’s very helpful.”

    The IRS said it sent out $15 billion in CTC checks on Thursday, with almost 9 of 10 of the payments directly deposited in recipients’ bank accounts. Eligible families with children under 6 will get $300 per child, while families with children ages 6 to 17 will receive $250. 

    Some households risk missing out on the payments, especially low-income families who aren’t required to file federal income tax returns. The IRS is relying on tax filings to determine eligibility.

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  • Scottish independence: Universal basic income would be ‘great opportunity’ for Yes

    The introduction of a universal basic income (UBI) and freeing Scotland from a “crazy” system of welfare which generates poverty is one of the great opportunities for independence, according to a leading campaigner.

    By: Judith Duffy

    Dr Simon Duffy, founder and director of The Centre for Welfare Reform, said political momentum was building internationally behind the idea of government guaranteeing a regular minimum income to every citizen and it was no longer considered “weird”.

    Scotland has looked at the feasibility of piloting Citizen’s Basic Income, concluding it would be desirable but the powers to run such a scheme lie with Westminster.

    The SNP’s manifesto for the election this year pledged to work towards providing a minimum income guarantee so that “everyone in Scotland has enough money to live a dignified life”.

    In May, Wales announced it would conduct an experiment to test the concept and success of UBI.

    Duffy, who will speak at an event on UBI on Thursday organised by Voices for Scotland, said: “Obviously Scotland has already showed great leadership in this field, but there is also a lot going on internationally.

    “Scotland is not alone, this is not very weird now. Mark Drakeford has committed to a pilot of basic income in Wales and all the political parties now in Northern Ireland either back basic income in full or the piloting of basic income.

    “It is quite exciting to see all of the places suddenly lift their head up and go ‘we can imagine a better future, with all the wealth we have we don’t need to leave people in poverty, we do not need to create this false sense of abject insecurity’.”

    Duffy said the pandemic was a major factor in sparking interest in UBI, as well as longer-term issues such as vanishing job security.

    “It reveals how fundamentally insecure people’s basic economic position is, how most of us are only a few weeks from poverty,” he said.

    “We just blithely carry on assuming everything is going to stay the same. Of course these kind of moments reveal that actually, very big shocks are possible.”

    He added: “The longer term discussions which have ramped up over the last five to 10 years have been around automation, but in particular digitalisation. What’s really under threat – and I think this is why basic income is going to succeed – is because it is going to threaten middle-class jobs, white collar jobs.”

    In August, international experts will virtually attend the Basic Income Earth Network’s annual congress which is being organised from Glasgow.

    Duffy said introducing UBI would be a “huge opportunity” for an independent Scotland.

    He said: “You end up with the opportunity to say this is what we are going to make sure everyone gets – effectively the government will put this into your bank account and when you earn over and above that you will be taxed at a fair rate. That is the essence of what basic income delivers.

    “The Scottish Government is right to say it is very difficult to do it at the moment, other than in pilots, but we shouldn’t confuse the trickiness in the current settlement with what’s possible with independence or a radically different kind of Union.

    “Freeing Scotland from this kind of crazy Whitehall system which has been generating poverty for decades is one of the great opportunities for independence.”

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