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Category: THE SOCIAL DEBATE

  • Early impacts of the expiration of pandemic unemployment insurance programs

    Ending these programs will mechanically throw the majority of people receiving benefits off UI rolls. What’s the real cost in human terms? The evidence reports an increase in self-reported hardship in paying for regular expenses.

    By: Arindrajit Dube

    So far, 25 states have ended their participation in all or most of the pandemic unemployment insurance (UI) programs: 22 of these states ended them in June, and 3 in July. All of these 25 states have ended the $300/week benefit boost (Pandemic Unemployment Compensation, or PUC). But 21 out of these 25 states have also ended their participation in the Pandemic Emergency Unemployment Compensation (PEUC) that allow workers to collect unemployment benefits past the roughly 26 weeks that most states offer; and in the Pandemic Unemployment Assistance (PUA) program that offers benefits to those who are ineligible to receive standard UI due to insufficient earnings, being freelancers or gig workers, or other reasons. This is relevant because around 3/4 of workers receiving UI right now are receiving it through PEUC and PUA.

    So ending these programs will mechanically throw the majority of people receiving benefits off UI rolls , which is distinct from any debate about behavioral response to the $300/week PUC which has animated much of the discussion when it comes to the topic.

    Proponents of cutting off pandemic UI argue that jobs are plentiful, so if pushed out of UI rolls, unemployed workers will quickly find jobs. And as the argument goes, this is especially true in the 25 states cutting off UI, since unemployment rates are lower there than in states keeping the pandemic UI for now.

    So what has been the impact so far on the labor market? How have the policy changes impacted the number of people receiving UI benefits? And have these policy changes boosted jobs in those states so far?

    Here I use recent data from the Household Pulse Survey (HPS) collected by the Census Bureau to assess the short term impacts of the June expiration. Specifically, the HPS asks whether the respondent received UI in the last 7 days, which allows us to assess the impact of the policy expiration on recipiency. In addition, the HPS also asks whether the respondent is currently working, which allows us to evaluate the employment impacts. The most recent data goes through July 5, 2021. For more information on the HPS, see here.

    I group states by their dates of expiration: 4 states ended the programs on June 12, then 8 more states ended them on June 19, and finally 10 additional states ended participation on June 26. The figure below plots the share of population between 18 and 65 years of age that were receiving UI over time by the four groups of states.

    We see that in the 12 states where pandemic UI expired on June 12 (grey) or 19 (green), the share of population receiving UI fell sharply between early June and early July, with a drop of around 2.2 percentage points. The difference-in-differences estimate using the non-expiring states as a control group is 2.3 pp (standard error of 0.6 pp).This amounts to a roughly 60 percent reduction in the UI rolls in these states. UI receipt in states with a June 26 expiration (red) fell only modestly as of early July, but that probably reflects some delay between when the programs end and when people receive their last checks. Finally, the share of population receiving UI remained largely unchanged in states where pandemic UI did not expire in June (blue).

    What happened to those who stopped receiving UI in June? Did they transition into work as those advocating ending these programs had predicted?

    The next two figures plot the employment to population (EPOP) rates of 18-65 year olds by the same cohorts of states. The first figure plots over the same time horizon as the unemployment receipts and focuses around the June expiration events.

    Between early June and early July, the EPOP rates in the states seeing large drops in UI receipt (i.e., 12th and 19th June cohorts in grey and green) saw no uptick in employment. Recall that around 2.2 percent of all 18-65 year olds stopped receiving unemployment benefits between early June and July in these 12 states. At the same time, EPOP in these states declined by around 1.4 percentage points over the same period (while it rose by 0.2 percentage points in states that did not end pandemic UI in June). The difference-in-difference estimate was -1.7 pp (std error of 1.3pp): the 95 percent confidence intervals rule out EPOP rises of 1 pp or more, which is substantially smaller than the 2.2 pp drop in UI receipt. Certainly there was no immediate boost to employment during the 2-3 weeks following the expiration of the pandemic UI benefits.

    The second figure zooms out to provide more information about how employment in these four groups of states have evolved over the pandemic. Generally speaking, the early ending states (especially June 12 and 19 cohorts) had higher EPOP rates during 2020, but those gaps had narrowed by early 2021. While a more refined analysis that more closely controls for the evolution of EPOP by expiration groups can be useful, at least over the past few months prior to the expiration, the EPOP in these groups of states seem to have been close in terms of levels and trends.

    Did the reduction in UI generosity–both from to individuals losing access to UI programs outright, and for those receiving claims but losing the $300 PUC–lead to greater financial hardship?

    The HPS asks respondents if in the last 7 days, it’s even difficult to pay for usual household expenses. I define people as stating they are experiencing difficulty with paying for expenses if they say it has been either “somewhat difficult” or “very difficult” in response to this question. The figure below shows an increase in respondents reporting difficulty in paying for expenses following the expiration in the states expiring in June. The difference in difference estimate for the June 12 and 19 cohorts is around 3.7 pp (standard error = 1.9 pp) and this is statistically significant at conventional levels. The fact that more people report hardships than losing UI benefits eligibility makes sense, as even those who remain eligible experience a sizable $300/week cut in benefit level. The overall effect sizes is consistent with how many people lose UI benefits either through eligibility or level of benefits.

    Overall, the mid-June expirations of pandemic UI seem to have sharply reduced the share of population receiving any unemployment benefits. But this doesn’t seem to have translated into most of these individuals having jobs in the first 2-3 weeks following expiration. However, there is evidence that the reduced UI benefits increased self-reported hardship in paying for regular expenses. Of course, this evidence is still early, and more data is needed to paint a fuller picture.

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  • A $500 post-pandemic infusion is headed to those in St. Louis who need it most

    By: Tony Messenger

    The man standing under the bus stop shelter on Washington Avenue was looking around, seemingly aimlessly, until he caught my eye.

    I was walking to lunch downtown for the first time in months, trying out the process of coming back to the office, seeing co-workers, working away from home after the long COVID-19 respite.

    “Do you have some spare change?” he asked. It was as though the man were welcoming me back to what used to be my daily environment. If you live or work in downtown St. Louis, or, really, any city in America, you’re used to occasionally having an unhoused person ask for money.

    The biggest-hearted people I know are of two minds in how to deal with such situations. Some carry coins and small bills in one pocket, to hand out in such situations. Others follow advice that was issued a few years back by the St. Patrick Center, that giving people on the street money isn’t the best solution, better to direct them to a place with more robust services and give your money to those organizations.

    I fall somewhere in the middle. Sometimes I offer some change, or leftover food in a to-go box. Oftentimes I say no, and then say “thank you” as I head on my way. I don’t know what I am thanking them for; but it’s my instinctive way of saying something polite. In some ways, though, I do thank those folks who remind me of the daily poverty around us.

    On this particular day, the St. Louis Board of Aldermen was debating — if you can call it that — whether to hand out $500 in direct payments to poor people in St. Louis who could use a helping hand as they recover from the pandemic that is still raging around us. Mayor Tishaura O. Jones included $5 million for that purpose in a spending proposal for money coming to the city from the American Rescue Plan. Board President Lewis Reed opposed the payments.

    Direct payments to people are a quick and effective way to infuse cash directly into the economy. It was that way when President George W. Bush issued such checks, and it was that way in the past two years as former President Donald Trump and then President Joe Biden issued such checks to help the country recover from the pandemic.

    So when Reed picked this unnecessary fight by removing the $500 payments from the mayor’s proposal when it came to the Board of Aldermen, it seemed a battle he was destined to lose, if not legislatively, then in the court of public opinion.

    That’s what happened Tuesday, as 17 aldermen mustered the votes to put the direct payments back into the spending plan. During a 12-hour meeting, Jones’ opponents suggested the money might go to drugs or booze, and that poor people needed lessons on how to properly spend the money. The loudest critic was Alderman Jeffrey Boyd, who like Reed has lost against Jones in past elections. “This is a feel-good payment,” Boyd said, his voice rising. “This payment isn’t going to help anybody.”

    New Alderman Bill Stephens, in a quiet but passionate plea that had the credibility of experience behind it, disagreed. “I was a homeless teen twice,” Stephens said. “$500 would have helped me.”

    Alderman Bret Narayan echoed the thought: “I reject the notion that $500 can’t be transformational. It’s back-to-school money for kids. It’s Christmas existing for some families.”

    Soon, about 10,000 St. Louis families will find out how transformational $500 can be. There are still some hurdles before the budget is final, but with Jones, Comptroller Darlene Green, and a majority of aldermen in favor of the payments, they are likely to happen.

    Some people who receive the checks will pay bills; others will have a little fun; nearly all of the money will be pumped back into the St. Louis economy, just as President Biden and the congressional authors of the American Rescue Plan intended.

    It was a legislative victory for Jones, but mostly, it was a victory for the people who will receive a cash infusion, maybe even the man I met that day on Washington Avenue.

    The post A $500 post-pandemic infusion is headed to those in St. Louis who need it most appeared first on Basic Income Today.

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  • The Child Tax Credit is the precursor for Universal Basic Income

    By MICHAEL HILTZIK

    Starting Thursday, the money will begin to flow in one of the most important government initiatives ever aimed at transforming the economics of family life in America.

    It’s the child tax credit, which will deliver $3,000 per child ($3,600 for children 5 and under) to the vast majority of families over the next year. Half the amount will be provided in monthly payments over the next six months, and the rest after families file their tax returns for 2021.

    However it’s disbursed, the money is expected to be transformative for millions of families. Building on a program last enacted in 2017 in a more limited form, the child tax credit is part of the American Rescue Plan signed by President Biden in March.

    The entire plan, which includes enhanced food stamp benefits and other safety-net features, is projected to help cut the child poverty rate in the U.S. nearly in half, to 7.5% from 13.6%, according to an analysis by Columbia University. But the child tax credit is its biggest component.

    “It’s a massive expansion of a credit that’s been around for a long time but only helped some families,” says Natalie Foster, co-chair of the Economic Security Project, which presses for programs to place more economic power in the hands of ordinary Americans. “This will help virtually all families.”

    Anti-poverty groups like Foster’s are organizing to make the child tax credit a permanent part of the U.S. economy, rather than a one-year pilot.

    That’s important because safety-net programs for children have both immediate and long-term benefits.

    “Giving cash to families with children will both reduce child poverty today and increase mobility out of poverty tomorrow,” Christopher Pulliam and Richard V. Reeves of the Brookings Institution wrote recently.

    Children in families that participated in programs offering unconditional cash transfers have shown improved educational attainment and emotional and behavioral health.

    Those with higher exposure to the government’s earned income tax credit for low-income households “are more likely to graduate high school and college, be employed as young adults, and have higher earnings,” Pulliam and Reeves reported. These are all factors in improving their mobility out of poverty and the low-income segment.

    The credit actually is even more significant than that. It’s the closest the federal government has ever come to funding a nationwide experiment in the concept known as universal basic income.

    As the term implies, UBI means providing individuals and households with an income floor of unconditional cash. A check would go to everyone, whether they’re employed or not.

    No strings attached. No means test. No bureaucrats examining your personal lifestyle or looking for hidden income. No politicians demanding that you seek out even a menial job or leave the children in the hands of caretakers before getting the money.

    Nine such programs have been launched in localities across the country, with 20 more in the pipeline, including programs in Los Angeles, Oakland, San Francisco, San Diego and Long Beach.

    Among the highest-profile UBI pilot programs was a two-year program launched in Stockton in February 2019 under then-Mayor Michael Tubbs. The program gave 125 randomly selected residents $500 a month for 24 months.

    The largest program underway is the Compton Pledge, which is providing 800 residents of that city up to $600 a month. The $9.2-million privately funded program launched by former Compton Mayor Aja Brown began in December and will run for two years.

    “The idea of recurring cash is increasingly popular,” says Nika Soon-Shiong, executive director of the Fund for Guaranteed Income, which is helping to provide funding and helped launch the Compton Pledge. Soon-Shiong, a co-director of the Compton Pledge, is the daughter of Dr. Patrick Soon-Shiong, who owns the Los Angeles Times.

    With child tax credit payments showing up in recipients’ bank accounts and mailboxes beginning Thursday, it’s timely to examine how the credit and UBI programs differ from what is normally thought of as welfare, and how they represent a vast improvement over more traditional features of the social safety net.

    To begin with, they’re inclusive. Even more important, they’re almost entirely unconditional.

    (By that standard, the child tax credit falls a bit short of the UBI ideal. Not only does eligibility depend on households having children younger than 18 in residence, it does carry some income limits: Married couples earning up to $150,000 and singles earning up to $75,000 can receive the full credit. Households exceeding those limits can receive smaller amounts, up to couples earning $440,000 and singles earning $240,000, for whom the phase-out is complete.)

    Most other safety-net programs either establish stringent income standards or dictate where the money is to be spent — for example, for food, or to heating bills or rent. By contrast, UBI programs trust recipients to make rational choices with unrestricted cash.

    That principle isn’t new: It dates back at least to Harry Hopkins, who as Franklin D. Roosevelt’s assistance czar viewed the purpose of those programs as putting food on the table without subjecting enrollees to demeaning inquiries into their social habits and economic situations by social workers.

    To this day, however, social programs are infected by critics’ suspicions that their beneficiaries are somehow morally undeserving or incapable of making responsible decisions. That’s the gist of the complaint about the child tax credit aired by Sen. Marco Rubio (R-Fla.) who disparaged the plan in February because it didn’t incorporate requirements that recipients have a job, be married or seek treatment for substance abuse.

    “If pulling families out of poverty were as simple as handing moms and dads a check, we would have solved poverty a long time ago,” Rubio wrote. “For decades, there was a bipartisan consensus that work, marriage, and community were critical pieces of poverty reduction.”

    This is the same Marco Rubio, by the way, who basked in praise for shoehorning an expanded child credit into the Republican tax cut bill in late 2017. That credit required recipients to be employed, a rule that has been eliminated in the new program.

    Despite Rubio’s assertion, the truth is that “handing moms and dads a check” has been shown to be more effective at lifting people out of poverty than saddling recipients with intrusive conditions.

    As Foster told me years ago, “poor people and the middle class know best how to spend their money. They just don’t have it.”

    Stockton UBI recipients
    Stockton UBI recipients spent mostly on food, shelter and utilities–and stepped up their food spending in February and March 2020 to prepare for the coronavirus lockdown. (SEED)

    An analysis of the first year of the Stockton program found that the money was spent on crucial needs such as food, shelter and utilities — and stepped up their food spending early last year in anticipation of pandemic lockdowns.

    The analysis also found that many participants used the opportunity afforded by the cash to improve their work situations — 28% of recipients had full-time employment at the outset of the program; a year later, 40% did. By comparison, full-time employment in the control group rose from 32% at the start to 37% after a year.

    In other words, recipients were able to move into full-time work at about twice the rate of the control group.

    “Individuals were able to leverage the $500 in ways that enabled them to show up and fill out a job application — if you’re working part time and taking care of a child, there’s not a lot of time in your day,” Stacia Martin-West, an expert in social work at the University of Tennessee, told me. “Financial scarcity creates time scarcity.”

    That conforms to the experience of other unconditional programs such as Alaska’s Permanent Fund Dividend, which has distributed money from the state’s oil boom since 1982.

    “We’re seeing that the money is paying for rent, paying for food,” Nika Soon-Shiong says, though a formal analysis of the Compton Pledge hasn’t been completed.

    “All this goes further to debunk the welfare stereotype that people are going to spend the money on drugs and alcohol. They’re spending the money on investing in their families and investing in their communities.”

    That’s the example set by Christine, 44, a Compton Pledge participant with a 4-year-old daughter who is working to establish a nonprofit to help homeless and low-income residents with meals, clothing, housing and transportation. (She asked that her last name not be published to protect her privacy.)

    Compton Pledge funding has supported Christine during the months in which she has had to stay home from her part-time job as a Metro bus driver to care for her daughter, whose asthma presents her with an added risk from potential COVID-19 infection.

    Christine’s experience parallels that of other households existing on the razor’s edge of low income, where any unexpected expense can overturn a family’s lifestyle. That’s especially true due to inflation, which is rising as the nation emerges from the pandemic.

    “All the prices have gone up,” she told me, mentioning a couch she needed for her apartment that nearly doubled in price before she could buy it and a used car on which the price tag has risen to $6,700 from $4,000 while she’s been in the market. “I don’t know how people expect anyone to live with everything so high,” she says.

    Parents face unique pressures, which is why the child tax credit could be a godsend for millions of families.

    “The most important job in democracy is the job of child-rearing,” says Michael Tubbs, who is currently co-chair of Mayors for a Guaranteed Income, a network of municipal leaders advocating for UBI. (The other co-chairs are Los Angeles Mayor Eric Garcetti and Melvin Carter, mayor of St. Paul, Minn.)

    “It’s exciting because of what it means for the next generation of children to grow up not in poverty and with parents who have the resources to provide for them,” Tubbs says. “The basic income in Stockton was spent on children — on child care, on school supplies, on food.”

    The child tax credit, he says, “is going to allow parents the time to parent, to not be anxious and stressed but to be present as parents. We know that poverty is an adverse childhood experience. This should have been done 100 years ago. But I’m glad we’ve arrived at that point today.”

    ___________________________________________

    Original Post appeared in LA Times: https://www.latimes.com/business/story/2021-07-15/child-tax-credit-guaranteed-income-biden

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  • New Poll: Majority of voters support a basic income guarantee by a 16-point margin, including 75% of Democrats, 53% of Independents, and nearly a third of Republicans

    Carter, Garcetti, and Tubbs are co-chairs of Mayors for a Guaranteed Income. Michael Tubbs is the former mayor of Stockton, CA. Eric Garcetti is the mayor of Los Angeles, CA and Melvin Carter is the mayor of St. Paul, MN.

    By: BY MELVIN CARTER, ERIC GARCETTI AND MICHAEL TUBBS

    On July 15, nearly every parent in America will begin receiving a guaranteed income. Labeled the Child Tax Credit, this $300 per month delivered directly to families mirrors the simplicity of a policy espoused by a range of Americans leaders, from Dr. Martin Luther King, Jr. to Richard Nixon. The cash is funded and distributed by the government, there are no restrictions on how it can be spent, and no work requirements to receive it.

    The CTC is a complete 180 from the punitive, distrustful lens with which social safety net policies have been debated, developed and rolled out in our country for the past four decades—from Ronald Reagan bolstering the racist, sexist (and untrue) trope of a “welfare queen” to the more bipartisan embrace of workfare programs that too often fed into a false narrative of poverty as an ailment of the lazy and entitled.

    New polling by Data for Progress and Mayors for a Guaranteed Income shows just how far we’ve come—a bipartisan majority of Americans support both guaranteed income and the CTC expansion.

    This is a distinct shift from the last national poll conducted by Pew in August of 2020, which found that only a minority of voters supported basic income.

    This shift is one of the few silver linings of COVID-19. Overnight, millions of people lost their jobs, struggling to make their mortgages and standing in days-long food bank lines to feed their families. The government needed a swift, effective way to curb the economic devastation that swept the country. There was no time for the typical hand-wringing over deficits and deservedness and the sanctimonious tirades that generally dominate such discussions (though that didn’t stop some from trying).

    People needed help, and cash was the solution, including boosts in unemployment insurance and multiple stimulus checks.

    A new analysis of cash aid between late 2020 and early 2021 found food insufficiency fell by over 40%, financial instability fell by 45%, and reported adverse mental health symptoms fell by 20%.

    When Congress stalled on providing ongoing aid last year we saw the dramatic effects of not using cash, with more than eight million Americans pushed into poverty without bolstered unemployment or additional checks.

    We were all mayors of major cities during the height of the pandemic last year, and saw first-hand the need for ongoing aid. We also knew that the problems of the pandemic were not new—that poverty and inequity run deep. 

    That’s why we launched Mayors for a Guaranteed Income in the pages of TIME. Our goal was two-fold: add to the body of data proving cash works through pilots across America, while also advocating for a federal guaranteed income policy.

    In addition to solving for our communities’ immediate needs, we were driven by a moral imperative to build an economy that works for everyone.

    Last year brought an inspiring wave of protests across the country, and the world, demanding equity for people of color—particularly Black Americans who have been historically excluded from economic gains. With its roots in racial and gender justice history, guaranteed income is the ideal tool to combat both the racial injustice and economic precarity brought to the fore in 2020 and that we continue to see today.

    MGI was founded on the belief that in the richest country in the world, no one should live in poverty. We operate based on the truth that financial instability is not the failure of individuals, but rather policies.

    Our progress over the last year has included important work at the local, state and federal levels. We’ve grown our ranks from 11 to 58 mayors, and scaled up our pilots from one to more than two dozen. We worked with state leaders, resulting in $35 million in guaranteed income pilot funding included in the California budget, a first in the country. We kept the heat on Congress to provide more stimulus checks, and we got them.

    As we look to the work of our next year, we recognize that now is not the time to take our foot off the gas. We will work with the administration and Congressional leaders to ensure the CTC is made permanent.

    The research from our pilots will continue to feed into the evidence base proving that cash works. We will also invest in narrative efforts to show that the economy is not numbers on a graph, it’s the financial reality of people in our communities.

    Through these combined efforts at every level of government, we will relentlessly fight for our shared goal of recognizing that we already have the tool to eradicate poverty and strengthen the middle class: a guaranteed income.

    The post New Poll: Majority of voters support a basic income guarantee by a 16-point margin, including 75% of Democrats, 53% of Independents, and nearly a third of Republicans appeared first on Basic Income Today.

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  • Opinion: The child tax credit is a conservative dream fulfilled. Let’s help make it permanent.

    The child credit in the stimulus package is just a temporary measure but it is like UBI for kids. Given the good it can do, can we make it permanent?

    By: Michael Gerson

    For decades, empowerment and reform-oriented conservatives have argued that tax burdens should be shifted away from families with children. It was a central part of what claiming to be “pro-family” meant. During the George W. Bush administration, the child tax credit was doubled from $500 to $1,000 per child. The 2017 tax bill doubled the maximum benefit of the child tax credit from $1,000 to $2,000 per child, and gave, on average, an additional $300 per child to families earning between $25,000 and $40,000 a year — thanks largely to the effort of Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah).

    Now the Biden stimulus bill has gone a large step further — creating a credit of $3,600 for children 5 and under, and a $3,000 credit for those aged 6 to 17. And because the credit would be refundable, it would even go to lower-income families who don’t pay taxes, in the form of a periodic payment from the government.

    This measure should be supported on its merits. But it has accomplished something else that is profoundly hopeful. Rather than being lost in Twitter’s netherworld of inanity and insanity, Republicans are conducting a real-world policy debate.

    Disagreement about family tax policy has a long history. At least since I was a policy staffer in the Senate during the 1990s, supply-side conservatives of the Wall Street Journal variety have argued that only cuts in marginal tax rates really matter, since those increase productivity. Child credits, in their view, just give money away without improving the functioning of the economy. Compassionate conservatives responded that improving the functioning of families was also a valid public goal.

    The other source of conservative opposition to the credit comes from champions of the work requirements contained in the welfare reform of the 1990s. They fear that the refundable child credit, which has no such strings, will encourage dependence and sloth, provide incentives for out-of-wedlock births and generally undermine the positive paternalism that nudges the poor toward responsible behavior.

    Answering these concerns involves a more complex economic and social discussion (as you can see from a recent event highlighting the conflicting views among scholars at the premier conservative think tank, the American Enterprise Institute).

    As a general matter, the defense of bossy social welfare bureaucracies sounds strange from the mouths of conservatives. But the main argument in favor of child allowances is that the family — the primary mediating institution — is under serious economic stress. Though a refundable credit may have some influence on workforce participation among the poor, the effect is likely to be small, while the overall help to struggling families will be large. And in some cases, enabling a parent to stay home with a young child is not an unwelcome outcome.

    There are other good, conservative reasons to favor refundable child credits. They are likely to encourage greater fertility, in a country whose entitlement system depends on a supply of young workers that can come only from births and immigration. These credits also partially redress the imbalance of a tax system that takes huge amounts of cash from younger Americans to subsidize entitlement programs for seniors.

    A government that encourages the well-being of families with children is investing in the future, not only honoring the promises of the past.

    And there is a related argument that conservatives should not share with their progressive friends, lest liberals everywhere begin to have serious second thoughts about their support for the measure. A $3,600 benefit, paid in a check to a parent at regular intervals, would defray most of the cost of sending a child to a Catholic elementary school (which now averages about $4,800 a year). For many parents, a child allowance will be the functional equivalent of a school voucher — money they can use at any private or religious school. This is the fulfillment by liberals of a conservative policy dream.

    The child credit in the stimulus package is just a temporary measure. Pro-family Republicans should work with Democrats to make it permanent. Sen. Mitt Romney (R-Utah) has put together an alternative that bumps up the benefit to $4,200 a year for children under 6, eliminates Temporary Assistance to Needy Families and partially pays for his benefit by ending the state and local tax deduction. Democrats will certainly reject some of this approach (particularly the last part, which would effectively increase taxes on childless couples in blue states to pay for large families in red states). But Romney’s proposal is a good-faith starting point for negotiations.

    Yes, stimulus legislation passed on a partisan vote. But this — the Democratic embrace of an idea with bipartisan roots, matched by a serious Republican alternative — is what a working democracy looks like.

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  • Stanford scholar’s new book examines how to build social justice across age groups

    New book highlights the need to distribute jobs, income and other essential resources in a way that treats people who are young and old as equals.

    By: SANDRA FEDER

    Juliana Bidadanure witnessed many social injustices growing up during the 1980s in Paris’s low-income suburbs, known as “banlieues.” The youth in her community were denied essential resources and were unfairly portrayed in the media as lazy and feckless. Bidadanure, now an assistant professor of philosophy in Stanford University’s School of Humanities and Sciences, has come to understand the inequalities she experienced were about race, gender, class and, concurrently, age.

    In her new book Justice Across Ages: Treating Young and Old as Equals (University of Oxford Press, 2021), Bidadanure argues that there are important consequences to ageism, whether it’s projected on the old or the young. The book describes how age inequalities contribute to social injustices.

    “Our obligations and entitlements, the benefits we have access to, the respect we are deemed worthy of – these are all affected by age,” said Bidadanure, who is also the director of Stanford’s Basic Income Lab.

    In Justice Across Ages, Bidadanure proposes a framework she calls a “theory of justice” that “guides a fair distribution of goods like jobs, healthcare, income and political power between people at different stages of their life.”

    Equal but not the same

    Bidadanure argues that young and old should be treated as equals – but not necessarily equally all the time.

    For example, giving older people a greater share of healthcare and financial support is viewed by most as an acceptable inequality, because most people will have access to those same resources when they age. The fact that all humans age is a compelling feature of a theory of age group justice, Bidadanure said, and most political theorists agree that societies should be more concerned about inequalities of resources over a person’s whole life, rather than between individuals at a given point in time.

    However, Bidadanure points out that this approach becomes problematic when “temporary” inequalities between age groups turn into more permanent generational inequalities – as occurred after the 2008 recession. “Young people of all generations are vulnerable to unemployment when they are transitioning from schooling to work,” Bidadanure explained. But after the 2008 recession, “younger people were most likely to be victims of long-term unemployment, and many were scarred by these early experiences.”

    Also, keeping young people in economic insecurity doesn’t make sense, if a societal goal is to distribute resources across a person’s lifespan in an optimal way, Bidadanure explains. “If there are no financial resources available to young people, they might miss opportunities like going to college or being able to do an internship and then are more likely to live in greater disadvantage for the rest of their lives,” she said.

    While the above considerations have to do with how resources are distributed among different age groups, there’s another important way inequalities between age groups matter – our inability to regard each other as equals. “Some modes of relating by age are incompatible with a just society,” she writes.

    These include: the infantilization of both young adults and older citizens, the political marginalization of teenagers and young adults, the political veneration of those middle-aged and older, the exploitation of young workers through precarious contracts and unpaid internships, the spatial segregation of elderly people and the normalization of financial dependency on one’s parents for young adults.

    Ageism directed at the young

    Ageism directed at the young can stand in the way of adequate policymaking and can have serious societal consequences, she said.

    One example of ageism that Bidadanure examined was the French Government’s exclusion of those younger than 25 years old from two income-support programs (the Revenu Minimum d’Insertion, 1988, and the Revenu de Solidarité Active, 2009). Even though many of those younger than 25 faced very high rates of unemployment and poverty, policymakers often assume that young adults, 18-25, will rely on parents or other family members for financial assistance and aren’t responsible enough to manage money.

    “This example showed persistent stereotypes of young people – that if we give them some cash then they’ll be lazy, won’t work and will waste the money,” she said.

    It is the same argument Bidadanure has heard in her work on basic income, a concept she supports.

    “What people need is economic security throughout a lifetime and for that, they need a continuous stream of income, especially in life stages when they are most vulnerable to poverty and unemployment,” she said. But damaging myths about those who receive benefits, and about the young, often stand in the way.

    Another age-related concern is that young adults are politically marginalized and often left out of crucial debates on socio-economic issues. “It’s a problem when no one is there to stand up for the young and advocate for their interests,” Bidadanure said. “When the stereotypes and misrepresentations are left unchallenged, it demeans a portion of the population with crucial policy consequences.”

    One way to address this imbalance is to boost youth voting rates and lower the voting age, she noted. Another, which she discusses extensively in her book, is to introduce quotas for young adults in parliaments.

    Bidadanure argues that ageism against any segment of the population, young or old, must be addressed if we are to create truly just societies. “We ought to attempt to build communities that are age-integrated, where members of a community are able to interact with one another with respect and consideration,” she writes in her book. “This is an essential feature of justice across ages.”

    The post Stanford scholar’s new book examines how to build social justice across age groups appeared first on Basic Income Today.

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  • Child Allowances: A Simple and Inexpensive Way to Help Families With Children

    By: Steven Pressman

    Raising children is expensive. A typical middle-class, two-child family spends $13,000 annually on each child, or nearly a quarter-million dollars per child in total through age 17. This tally includes neither college costs nor the cost to a family of putting money aside to help the children attend college, which itself can easily run another quarter of a million dollars or more for each child. The challenge is even greater for poor families that have little income and need to spend a large fraction of it supporting their children. Most families with children in the United States today are struggling financially. 

    Fortunately, there is a remedy—child allowances. These are regular payments from the government to families for the sake of their children. Think of it as universal basic income, but for children only.

    The aim is to help families support their children and keep families from being penalized because they have children and more mouths to feed. This pro-child policy is necessary because firms won’t pay workers more money if they have children. Any firm that did this would find itself at a competitive disadvantage. For this reason, virtually every country in the world has a child allowance program. (For more on child allowances in France, see my piece in the August 2018 Washington Spectator.)

    Nations benefit from helping low-income families with children. Children growing up in poverty get less education, earn less income, and pay less in taxes. They are a bigger burden on society throughout their life. They experience more health problems, raising insurance costs for everyone, and receive more social insurance benefits. Finally, there is considerable evidence that poverty has noneconomic costs—it creates anxiety and behavioral problems in children and leads to greater instances of depression compared with non-poor children. 

    Support for child allowances comes from across the political spectrum. Conservatives like that they encourage parents to stay at home and care for their kids and that they don’t require the government to make decisions about people’s lives. As the Niskanen Center, a conservative think tank, put it, child allowances “leave paternalism to the parents.” Liberals like the fact that child allowances don’t stigmatize the poor by providing means-tested benefits (such as SNAP or Food Stamps) and because they are an effective way to reduce child poverty.  

    Nobel laureate economist Robert Solow estimated the annual cost to the nation due to child poverty at 3 percent of U.S. gross domestic product, or approximately $630 billion today.

    The Center for American Progress estimated the annual cost at 4 percent of GDP, or $840 billion. The cost comes from reduced employment and taxes plus higher crime rates and health care expenditures. 

    Providing child allowances is a highly effective way to reduce child poverty and decrease these societal costs. According to the U.S. Census Bureau, 14.4 percent of U.S. children (one in seven) were poor in 2019. The Luxembourg Income Study, a cross-national database with comparable information on household income, estimates that in the mid-2010s the child poverty rate in the United States for two-parent families was 13 percent. By comparison, the child poverty rate for two-parent families was 7.9 percent in Germany, 7.7 percent in the U.K., and 1.6 percent in Finland. My research traces these international differences directly to government policies aiding families with children, particularly child allowances. 

    Given the benefits of reducing child poverty, why has the United States failed to adopt a child allowance program? Partly, the reason is that the United States has used other policies to help families with children. 

    The main source of support for families with children has been a tax exemption for each child. In 2017, the last year that this tax benefit was available, each dependent child provided an exemption that reduced taxable income by around $4,000. The tax saving for a family then would depend on its tax bracket. Those in the top tax bracket (40 percent) got back $1,600 per child; a family in the 10 percent bracket gained only $400 from a $4,000 child exemption. Those in the 0 percent bracket, owing no taxes, got no help. This was an upside-down subsidy. It helped the affluent raise their children, but it did nothing to help poor families and little to help middle-class families.  

    A push for change began in the 1990s. The National Commission on Children recommended a universal $1,000 child tax credit (the equivalent of $2,000 today) in a 1991 report. With a tax credit, every household receives the same monetary benefit. It is very nearly a child allowance. The United States first instituted a $400 child tax credit in the 1997 Taxpayer Relief Act. But the credit was not refundable. Families owing no taxes got nothing; and families owing less than the full amount of the credit only got back the taxes they owed to the Federal government. Low-income families, needing the most help to raise their children, were helped the least. 

    When George W. Bush increased the tax credit to $1,000, as part of his 2001 tax cut, Democrats pushed to have it be partially refundable. The credit has been increased several times since then. In 2020, the credit was $2,000; $1,400 was refundable to those with at least $2,500 of earned income. Still, families with children in the greatest need received no aid or very little. The Brookings Institution has calculated that 40 percent of the $118 billion spent on this program in 2020 went to households with incomes above $100,000. In contrast, most children living in households in the bottom 10 percent of the income distribution got nothing.  

    Child poverty experts in Congress, including Democratic Senators Michael Bennet of Colorado, Sherrod Brown of Ohio, and Representative Rosa DeLauro of Connecticut, have pushed long and hard to make the tax credit fully refundable. They succeeded when President Biden signed the American Rescue Plan on March 11. This $1.9 trillion Covid-19 relief bill increased the child tax credit from $2,000 to $3,000, with an extra $600 for children under age 6, and made the credit fully refundable. 

    Finally, the American Rescue Plan stipulated that payments be made monthly to families with children, rather than annually through a tax refund.

    Beginning July 2021 and continuing through June 2022, most families will get monthly payments from the IRS of $300 for each young child and $250 for children over the age of 5. Providing money sooner helps the many families with variable income. Monthly payments will also reduce child hunger and homelessness, as well as the high-interest debt that families incur (e.g., payday loans) to put food on the table and pay utility bills. As a full child allowance policy, these payments will make a huge difference in the lives of children whose families live paycheck to paycheck. 

    The Center on Budget and Policy Priorities estimates that the changes in the child tax credit will lift 4.1 million children above the poverty line. The Center on Poverty and Social Policy at Columbia University estimates that nearly five million children will escape poverty due to these changes, reducing the U.S. child poverty rate to 7.9 percent. It will cost $109 billion, according to the Congressional Joint Committee on Taxation. 

    Given the costs of child poverty, as estimated by Solow and the Center for American Progress, the American Rescue Plan should pay for itself quickly by cutting the U.S. child poverty rate nearly in half. Virtually no private investment has such a large rate of return. Furthermore, the government can borrow money for this investment at the rate of around 1.5 percent (the interest rate on 10-year government bonds). 

    Like Cinderella at midnight, after June 2022, the fully refundable child tax credit will return to what it was during 2020. A number of Democrats hope to make the refundable tax credit permanent. If they succeed, it would be a major step forward in reducing child poverty in the United States.  

    A permanent child tax credit, or child allowance program, would be of significant help to low- and middle-income families with children. The reduction in child poverty will benefit the entire nation in demonstrable ways. It is time to follow the rest of the world and make this a permanent feature of the U.S. tax code.   

    __________________________________________

    About the Author: Steven Pressman is professor of economics at Colorado State University, author of Fifty Major Economists, 3rd edition (Routledge, 2013), and president of the Association for Social Economics.

    The post Child Allowances: A Simple and Inexpensive Way to Help Families With Children appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Child Allowances: A Simple and Inexpensive Way to Help Families With Children

    By: Steven Pressman

    Raising children is expensive. A typical middle-class, two-child family spends $13,000 annually on each child, or nearly a quarter-million dollars per child in total through age 17. This tally includes neither college costs nor the cost to a family of putting money aside to help the children attend college, which itself can easily run another quarter of a million dollars or more for each child. The challenge is even greater for poor families that have little income and need to spend a large fraction of it supporting their children. Most families with children in the United States today are struggling financially. 

    Fortunately, there is a remedy—child allowances. These are regular payments from the government to families for the sake of their children. Think of it as universal basic income, but for children only.

    The aim is to help families support their children and keep families from being penalized because they have children and more mouths to feed. This pro-child policy is necessary because firms won’t pay workers more money if they have children. Any firm that did this would find itself at a competitive disadvantage. For this reason, virtually every country in the world has a child allowance program. (For more on child allowances in France, see my piece in the August 2018 Washington Spectator.)

    Nations benefit from helping low-income families with children. Children growing up in poverty get less education, earn less income, and pay less in taxes. They are a bigger burden on society throughout their life. They experience more health problems, raising insurance costs for everyone, and receive more social insurance benefits. Finally, there is considerable evidence that poverty has noneconomic costs—it creates anxiety and behavioral problems in children and leads to greater instances of depression compared with non-poor children. 

    Support for child allowances comes from across the political spectrum. Conservatives like that they encourage parents to stay at home and care for their kids and that they don’t require the government to make decisions about people’s lives. As the Niskanen Center, a conservative think tank, put it, child allowances “leave paternalism to the parents.” Liberals like the fact that child allowances don’t stigmatize the poor by providing means-tested benefits (such as SNAP or Food Stamps) and because they are an effective way to reduce child poverty.  

    Nobel laureate economist Robert Solow estimated the annual cost to the nation due to child poverty at 3 percent of U.S. gross domestic product, or approximately $630 billion today.

    The Center for American Progress estimated the annual cost at 4 percent of GDP, or $840 billion. The cost comes from reduced employment and taxes plus higher crime rates and health care expenditures. 

    Providing child allowances is a highly effective way to reduce child poverty and decrease these societal costs. According to the U.S. Census Bureau, 14.4 percent of U.S. children (one in seven) were poor in 2019. The Luxembourg Income Study, a cross-national database with comparable information on household income, estimates that in the mid-2010s the child poverty rate in the United States for two-parent families was 13 percent. By comparison, the child poverty rate for two-parent families was 7.9 percent in Germany, 7.7 percent in the U.K., and 1.6 percent in Finland. My research traces these international differences directly to government policies aiding families with children, particularly child allowances. 

    Given the benefits of reducing child poverty, why has the United States failed to adopt a child allowance program? Partly, the reason is that the United States has used other policies to help families with children. 

    The main source of support for families with children has been a tax exemption for each child. In 2017, the last year that this tax benefit was available, each dependent child provided an exemption that reduced taxable income by around $4,000. The tax saving for a family then would depend on its tax bracket. Those in the top tax bracket (40 percent) got back $1,600 per child; a family in the 10 percent bracket gained only $400 from a $4,000 child exemption. Those in the 0 percent bracket, owing no taxes, got no help. This was an upside-down subsidy. It helped the affluent raise their children, but it did nothing to help poor families and little to help middle-class families.  

    A push for change began in the 1990s. The National Commission on Children recommended a universal $1,000 child tax credit (the equivalent of $2,000 today) in a 1991 report. With a tax credit, every household receives the same monetary benefit. It is very nearly a child allowance. The United States first instituted a $400 child tax credit in the 1997 Taxpayer Relief Act. But the credit was not refundable. Families owing no taxes got nothing; and families owing less than the full amount of the credit only got back the taxes they owed to the Federal government. Low-income families, needing the most help to raise their children, were helped the least. 

    When George W. Bush increased the tax credit to $1,000, as part of his 2001 tax cut, Democrats pushed to have it be partially refundable. The credit has been increased several times since then. In 2020, the credit was $2,000; $1,400 was refundable to those with at least $2,500 of earned income. Still, families with children in the greatest need received no aid or very little. The Brookings Institution has calculated that 40 percent of the $118 billion spent on this program in 2020 went to households with incomes above $100,000. In contrast, most children living in households in the bottom 10 percent of the income distribution got nothing.  

    Child poverty experts in Congress, including Democratic Senators Michael Bennet of Colorado, Sherrod Brown of Ohio, and Representative Rosa DeLauro of Connecticut, have pushed long and hard to make the tax credit fully refundable. They succeeded when President Biden signed the American Rescue Plan on March 11. This $1.9 trillion Covid-19 relief bill increased the child tax credit from $2,000 to $3,000, with an extra $600 for children under age 6, and made the credit fully refundable. 

    Finally, the American Rescue Plan stipulated that payments be made monthly to families with children, rather than annually through a tax refund.

    Beginning July 2021 and continuing through June 2022, most families will get monthly payments from the IRS of $300 for each young child and $250 for children over the age of 5. Providing money sooner helps the many families with variable income. Monthly payments will also reduce child hunger and homelessness, as well as the high-interest debt that families incur (e.g., payday loans) to put food on the table and pay utility bills. As a full child allowance policy, these payments will make a huge difference in the lives of children whose families live paycheck to paycheck. 

    The Center on Budget and Policy Priorities estimates that the changes in the child tax credit will lift 4.1 million children above the poverty line. The Center on Poverty and Social Policy at Columbia University estimates that nearly five million children will escape poverty due to these changes, reducing the U.S. child poverty rate to 7.9 percent. It will cost $109 billion, according to the Congressional Joint Committee on Taxation. 

    Given the costs of child poverty, as estimated by Solow and the Center for American Progress, the American Rescue Plan should pay for itself quickly by cutting the U.S. child poverty rate nearly in half. Virtually no private investment has such a large rate of return. Furthermore, the government can borrow money for this investment at the rate of around 1.5 percent (the interest rate on 10-year government bonds). 

    Like Cinderella at midnight, after June 2022, the fully refundable child tax credit will return to what it was during 2020. A number of Democrats hope to make the refundable tax credit permanent. If they succeed, it would be a major step forward in reducing child poverty in the United States.  

    A permanent child tax credit, or child allowance program, would be of significant help to low- and middle-income families with children. The reduction in child poverty will benefit the entire nation in demonstrable ways. It is time to follow the rest of the world and make this a permanent feature of the U.S. tax code.   

    __________________________________________

    About the Author: Steven Pressman is professor of economics at Colorado State University, author of Fifty Major Economists, 3rd edition (Routledge, 2013), and president of the Association for Social Economics.

    The post Child Allowances: A Simple and Inexpensive Way to Help Families With Children appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • G20’s ‘Ideas Bank’ Recommends Global Basic Income

    T20 Task Force 6 Statement

    The pandemic has increased poverty worldwide so in response, there is global interest in UBI. Can it become a reality soon?

    The pandemic has increased poverty worldwide.

    As estimated by the World Bank, COVID-19 has pushed back between 88 and 115 million people into extreme poverty in 2020, setting back poverty reduction by around three years.

    Moreover, the International Labour Organization assessed that in 2020 an additional 255 million full-time jobs were lost worldwide; vulnerable groups, particularly women and low-skilled workers, are more likely to lose their jobs or to suffer from salary and wage reduction. More than 463 million students around the globe, both in advanced economies and developing countries, remained cut off from online education last year. The pandemic has also created new inequalities overlapping with pre-existing ones along the gender, skill and age dimensions, and has reduced social mobility as the main social elevator got stuck between repeated school closures.

    The Think20 (T20), the engagement group of the G20 which brings together think-tanks, universities and other research centres is working to produce practical policy-proposals for G20 decision makers.

    The Task Force on Social Cohesion and the Future of Welfare Systems believes that the G20 has a crucial role to play in making sure that the recovery from the pandemic preserves social cohesion. We also believe that it is fundamental to have an integrated approach in the different areas of policy-making. The decision to host a joint meeting of the G20 Labour and Education Ministers was a right step in this direction as there are very important issues to be tackled in the transition from school to work of the generations hardest hit by the school closures. It would be important to have a similar meeting of G20 Labour and Interior Ministries as the regularisation of migrants is a key requirement for the enforcement of labour laws and the reduction of monopoly power of employers.

    The T20 calls G20 Labour and Employment Ministers to take action with respect to the following proposals in respective policy areas:

    Tackling poverty and inequality by focusing on education and skills

    G20 countries should consider supporting the introduction of safety nets in developing countries where poverty has increased the most during the pandemic; the design of these schemes should be as simple as possible and take into account the information available to public administration in these countries. We therefore argue for unconditional citizenship schemes in these countries.

    It is important to make sure that the skills lower educated workers have, and the new technologies being accessed, can generate “quality” jobs for less educated workers.

    Enhanced wage progression and better jobs for the low educated can be achieved through the right investment in skills, especially soft skills. Innovation need not lead to the demise of good jobs for lower educated workers. It is this match between worker skills and the type of firms that matters and requires careful policy attention as we emerge from the pandemic.

    Socio-economic inequalities (access to education and skills) and inter-generational inequalities (between older and younger people) could be reduced by increasing government funding in several education areas (i.e. remedial education, vocational education, digital technology for poorer pupils, re-training schemes for job-seekers, pedagogical strategies and teacher training for the recovery) and by designing policies that exploit complementarities between these areas. Possible, concrete actions would be: encouraging investment in artificial intelligence that helps integrate lower-educated workers, or redressing geographical concentrations of low-educated workers.

    Regulating remote working to increase productivity and well-being

    There will be substantial reallocation of labour after the pandemic. More people will need to retrain. The possibility of online training enables people to overcome barriers arising because of distance to an educational provider and potentially enables greater flexibility. The provision of better digital infrastructure would thus facilitate training both directly (i.e. enabling people to do this online) and indirectly (i.e. removing costs associated with having to attend in-person). There ought to be cross-country co-ordination in the regulation of remote working. During the pandemic, remote working increased by a factor of three to four in most developed countries (from around 10% to 30/40% of the workforce) and is bound to last even after the pandemic.

    As in the case of posted workers, international agreements should be reached establishing, for instance, that the remote worker should be treated according to the regulations of the country where their employer is located.

    The spread of remote working may also create a new and relevant obstacle to social mobility, notably housing inequality. Workers with congested housing conditions, poor internet connections, dependent family members to take care of while at home may be put at serious disadvantage. This issue can no longer be neglected by Governments. We recommend to improve data collection on the interactions between remote working and housing inequality. Specific policy interventions can be designed to sustain investments in hybrid housing-working spaces and granting broadband internet connections to all workers.

    Women’s empowerment: enhancing labour market access and job opportunities for vulnerable groups

    According to the ILO, women have been disproportionately hit by the pandemic and they are now more likely to drop out of the labour force than men. To support the achievement of G20 commitments such as the Brisbane target to reduce the gender gap in labour market participation rates by 25% by 2025, the T20 recommends to leverage trade policy as a means to generate decent work for women and reduce gender inequality. In particular, the G20 could provide technical and scientific assistance to small-scale female farmers and producers in developing countries to help them get better access to export markets.

    Moreover, G20 countries should be encouraged to introduce financial literacy programmes in school curricula, making use of digital tools, particularly in developing countries, to facilitate access to the labour market for women and youth.

    Taxation: strengthening cross-country policy coordination in providing basic income and in taxing multinational corporations

    Many of our proposals involve additional government expenditure. This could be financed by increased taxes, reduced government spending elsewhere, or alternatively by increased government borrowing.

    Although little international co-ordination is required in raising taxes on labour income and consumption, this is not the case for the broad range of capital taxes. Raising revenue through corporation taxation and wealth taxation, for example, is much more effective and efficient with international co-operation and coordination.

    An option to be considered while waiting for an international agreement on a minimum tax on corporate incomes is to introduce an annual tax of 0.2% on corporations’ stock shares for all publicly listed companies headquartered in G20 countries. The tax would raise approximately $180bn each year and could be used to address global externalities and build an international global sovereign fund.

    We would also recommend the G20 to considering the establishment of a Global Citizen Income (GCI) through a two-step approach: a partial GCI to tackle poverty and unemployment generated by Covid-19; a full-scale GCI to build global citizenship. The GCI would be funded by raising Official Development Assistance (ODA) and by introducing tax measures such as a tax on Multinational Corporations (MNCs), a global wealth tax, a carbon tax, a Tobin Tax.

    Conclusion

    After the pandemic, there are many challenges facing our society. The Think20 (T20), through its Task Force on Social Cohesion and the Future of Welfare Systems, calls G20 Labour and Employment Ministers for a renewed commitment to address these challenges by designing, and swiftly implementing, policy measures aimed at reducing inequality and poverty, supporting women’s and youth’s inclusion in the labour market, accompanying the transition towards new forms of work, strengthening education and skills, introducing innovative tax measures.

    ____________________________________

    This statement was produced by T20 Italy in the occasion of the G20 Labour and Employment Ministers’ Meeting held in Catania on 23 June. ISPI is the National Coordinator and Chair of the T20 Italy.

    The post G20’s ‘Ideas Bank’ Recommends Global Basic Income appeared first on Basic Income Today.

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  • Sam Altman’s ‘Worldcoin’ Wants to Give Everyone Crypto UBI

    Its creators want a crypto-based UBI and plan to use an eyeball scanner to prevent fraud.

    By: Victoria Song

    If you thought cryptocurrency shenanigans ended with Dogecoin and NFTs, you should probably sit down for this one. Sam Altman, the former CEO of famed startup incubator Y Combinator, is reportedly working on a new cryptocurrency that’ll be distributed to everyone on Earth. Once you agree to scan your eyeballs.

    Yes, you read correctly.

    You can thank Bloomberg for inflicting this cursed news on the rest of us. In its report, Bloomberg says Altman’s forthcoming cryptocurrency and the company behind it, both dubbed Worldcoin, recently raised $25 million from investors. The company is purportedly backed by Andreessen Horowitz, LinkedIn founder Reid Hoffman, and Day One Ventures.

    “I’ve been very interested in things like universal basic income and what’s going to happen to global wealth redistribution and how we can do that better,” Altman told Bloomberg, explaining what fever dream inspired this.

    Universal basic income is an economic theory that stipulates every citizen should have a government-provided income regardless of need. While you may associate UBI with the failed political ambitions of Andrew Yang, in the tech world it’s been touted as a strategy to offset job losses spurred by automation. Altman himself has been a vocal proponent of UBI for several years. During his time at Y Combinator, Altman planned to dole out as much as $60 million as part of a pilot study to test UBI’s feasibility. Altman also began speaking about the potential relationship between crypto and UBI as early as 2019.

    What supposedly makes Worldcoin different is it adds a hardware component to cryptocurrency in a bid to “ensure both humanness and uniqueness of everybody signing up, while maintaining their privacy and the overall transparency of a permissionless blockchain.”

    Specifically, Bloomberg says the gadget is a portable “silver-colored spherical gizmo the size of a basketball” that’s used to scan people’s irises. It’s undergoing testing in some cities, and since Worldcoin is not yet ready for distribution, the company is giving volunteers other cryptocurrencies like Bitcoin in exchange for participating. There are supposedly fewer than 20 prototypes of this eyeball scanning orb, and currently, each reportedly costs $5,000 to make.

    Supposedly the whole iris scanning thing is “essential” as it would generate a “unique numerical code” for each person, thereby discouraging scammers from signing up multiple times. As for the whole privacy problem, Worldcoin says the scanned image is deleted afterward and the company purportedly plans to be “as transparent as possible.”

    Listen, there’s nothing inherently wrong with UBI, or even the need to ensure people don’t abuse a good thing. But, does it have to be done like this? Do we always have to jump to the most cursed solutions first?

    The post Sam Altman’s ‘Worldcoin’ Wants to Give Everyone Crypto UBI appeared first on Basic Income Today.

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  • Vowing to implement UBI in South Korea, Gyeonggi Gov. Lee Jae-myung announces presidential bid

    Vowing to alleviate unfairness and inequality, Lee promises to turn crisis into opportunity with powerful policies

    By: Kan Hyeong-woo

    Gyeonggi Province Gov. Lee Jae-myung officially announced his presidential bid Thursday, vowing to ensure fairness and to turn a crisis into an opportunity with powerful economic policies.

    Using a prerecorded video released via social media channels including YouTube and Facebook, Lee signaled the beginning of his presidential campaign by reading Article 1 of the Constitution.

    “The Republic of Korea shall be a democratic republic. The sovereignty of the Republic of Korea shall reside in the people, and all state authority shall emanate from the people,” he said.

    Underlining that the purpose of a nation and living together is for a safer and better life, Lee said Korea was facing a crisis today with low growth because of unfairness and inequality despite having more capital, better technology, greater labor forces and stronger infrastructure than ever.

    “Lack of opportunity due to low growth is a major cause of all problems such as low birthrate, aging population and unemployment,” he said.

    “The era of high growth where investment alone led to an economic virtuous circle with increasing employment, income and consumption is now gone.”

    In order to better lives for people and grow continuously, the Gyeonggi Province governor highlighted the importance of securing fairness, alleviating inequality and polarization, expanding welfare and guaranteeing fundamental economic rights.

    “Like the New Deal during the Great Depression, the public sector has to pave the way for the private sector to venture investment and innovation in the era of great changes,” Lee said.

    “Half a step late, we are being dragged. Half a step ahead, we can use the crisis as an opportunity. The worldwide crisis is a golden opportunity for us to move on to a leading economy from the tough, chasing economy in the past.”

    Saying that politics is the object of distrust and ridicule because there are no sanctions for violating campaign promises, Lee claimed that he has fulfilled over 90 percent of his campaign pledges during his three-year tenure as governor of Gyeonggi Province and as a two-time mayor of the city of Seongnam, Gyeonggi Province, over eight years.

    Pledging to immediately start powerful economic revival policies to shift the economic paradigm into future industry and create quality jobs, the governor also vowed to introduce a universal basic income to increase insufficient consumption and create a society where everyone can enjoy a minimum level of affluence and work in a job they want.

    Lee also said he would build a global cultural powerhouse with an “ideal” working environment for all laborers, and he will open a new path based on strong self-defense for peaceful coexistence and common prosperity through balanced diplomacy centered on national interests.

    The Gyeonggi Province governor has long been considered the front-runner among the ruling Democratic Party of Korea’s presidential candidates by a wide margin.

    According to a survey released by the Korea Society Opinion Institute on Monday, Lee was the second most favored presidential candidate overall, with 28.4 percent of respondents choosing him.

    Former Prosecutor General Yoon Suk-youl, who officially launched his presidential campaign Tuesday, received the largest share of support, with 32.4 percent. Former Prime Minister Lee Nak-yon, another contender from the ruling Democratic Party, took the third spot at 11.5 percent.

    Lee now faces eight other competitors in the Democratic Party’s presidential primaries, including former Prime Ministers Lee Nak-yon and Chung Sye-kyun and former Justice Minister Choo Mi-ae.

    Branded as “an interview of the presidential hopefuls in front of the public,” the Democratic Party will hold four televised debates starting from Saturday night. After the last debate on July 8, the party will conduct two equally weighted surveys of its own members and of the general public for three days to decide the top six candidates for the primary election. The Democratic Party’s final nominee for next year’s presidential election will be selected by Sept. 10.

    The post Vowing to implement UBI in South Korea, Gyeonggi Gov. Lee Jae-myung announces presidential bid appeared first on Basic Income Today.

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  • Universal Basic Income rejected in UK by influential group after Tory MPs vote it down

    The Commons Work and Pensions Committee has ruled Universal Basic Income is not ‘the right way forward’ for the UK – but only after a spat between Opposition and government MPs

    By: Dan Bloom

    An influential group of MPs has rejected the idea of a £60-a-week payment for all Brits after Tory MPs voted down a bid to show support.

    The Commons Work and Pensions Committee ruled “we are not convinced” a Universal Basic Income would be the right way forward for the UK.

    The body added the Department for Work and Pensions (DWP) should instead focus on making existing benefits “sufficient to meet claimants’ basic needs”.

    But the committee was publicly split over the issue, with four Labour and SNP MPs trying unsuccessfully to get a report to support trials of UBI.

    An original draft of the committee report said “no pilot” of UBI has been carried out in the UK, so there is a “lack of empirical evidence about how it might work in practice.”

    The draft added: “We recommend that DWP should support local authorities and devolved governments who want to carry out their own feasibility study of UBI.” But six Tory members of the committee voted to remove that reference.

    After a to and fro in which Labour and SNP members tried to reject the report altogether, the final report recommended against UBI.

    It said UBI would be “extremely expensive, and would not target support at people who need it most. Instead, it risks diverting resources away from the existing social security system and other vital public services.

    “We are not convinced that it would be the right way forward for social security in the UK.”

    Furious SNP MP Chris Stephens said: “The refusal to look seriously at options that could lift people out of poverty and eradicate inequalities is sheer arrogance from the Tories.

    “They themselves have agreed that it is vital for people who find themselves out of work to have access to a robust safety net, and have acknowledged that the UK does not have that right now.

    “Yet they will readily shut down options that could rectify this or allow devolved nations to rectify this.”

    Supporters say UBI would bring down benefit spending and safeguard the future against the rise of machine work – but critics say it would hand rich people government cash and cost a vast sum.

    The report notes that there is no single agreed figure for a Universal Basic Income, but Compass has modelled a system in which adults would receive £60 a week, children get £40 and over-65s get £175.

    Other models suggest paying different amounts to different groups of people, the report notes. It said a trial of UBI in Finland, in which 2,000 unemployed people got a monthly payment of €560, had no “notable impact” on job prospects but “did have a positive impact on their overall wellbeing”.

    The Welsh government intends to pilot UBI while Scotland’s government is nudging towards the idea. Tory ministers in the UK government have flatly ruled it out.

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  • Opinion: Selling our personal data can create universal basic income

    The data trust could, for a fee, give controlled access to our data. Those fees would be collected and distributed to the citizens as dividends, thus funding a UBI. Would it work?

    BY: GEORGE ZARKADAKIS

    Universal basic income (UBI) is the radical idea of giving every person a tax-free, flat amount of income, irrespective of their wealth or employment status. Proponents of UBI point to the accelerating transition of the economy from secure, full-time jobs toward zero-hour gig contracts, and argue that UBI will be necessary to fund citizen well-being in an increasingly uncertain labor market. Their argument is further supported by the march of artificially intelligent systems that automate ever more physical and cognitive human tasks, clearly pointing to a future where wage work will be intermittent and unpredictable for most people. 

    UBI used to be a fringe idea, but the COVID-19 pandemic has put it firmly in the spotlight.

    The trillions of dollars spent on both sides of the Atlantic to keep people out of the office during lockdowns have been a massive experiment in UBI. So where do we go from here?

    Two factors will determine whether UBI becomes part of the post-pandemic new normal. The first is how sustainable it is for any government to fund a perpetual UBI without massively adding to the national debt and raising inflation. 

    Research by the American Enterprise Institute has shown a way to achieve a budget-neutral UBI that would give each American $1,350 per month by eliminating almost all current welfare programs. But, given there’s no free lunch in economics, the plan has been shown to be detrimental to millions of citizens at the bottom of income distribution. So instead of lowering inequality, a UBI could raise it. 

    The second factor is how UBI would affect human behavior. Earning a living is not an economic necessity only; it is also a source of dignity and self-respect. There is clear correlation between unemployment and mental illness, as well as suicide. Humans need to feel worthy in order to live a meaningful life.

    Thankfully, our worth also has a monetary value. Our digital avatars and data, already quite important, will become even more so in the future, as they are needed to train and power the intelligent algorithms that will replace us in the workplace. The enormous value of our data is currently monetized by a handful of tech companies. 

    What if we claimed property rights for our personal data? Instead of effectively selling the data to tech giants in exchange for free services, we could instead aggregate our data into a collective asset. Then, we could assign representatives with fiduciary responsibilities to the data providers—us—to govern that asset on our behalf. Call this organization a citizen data trust. 

    Thankfully, our worth also has a monetary value. Our digital avatars and data, already quite important, will become even more so in the future, as they are needed to train and power the intelligent algorithms that will replace us in the workplace. The enormous value of our data is currently monetized by a handful of tech companies. 

    What if we claimed property rights for our personal data? Instead of effectively selling the data to tech giants in exchange for free services, we could instead aggregate our data into a collective asset. Then, we could assign representatives with fiduciary responsibilities to the data providers—us—to govern that asset on our behalf. Call this organization a citizen data trust. 

    The data trust could then give, for a fee, controlled access to our data to private or public organizations that need data to develop algorithms, products, and services. Those fees would be collected by the trust and distributed to the citizens as dividends, thus funding a UBI. 

    To put the value of data in context, consider how U.S. airlines raised billions in loans backed by their data-heavy frequent flier programs. In March 2021, American Airlines hit a record valuation for its loyalty program—a data set of customer behavior data—of $24 billion. 

    Data sets increase in value when combined with other data sets. A smart city data trust could hold dozens of citizen data sets, including health records, transportation habits, and environmental data. If every citizen was a shareholder in that data trust, dividends could translate to thousands of dollars of income per month.

    Data trusts could help societies move toward greater economic equality by becoming intermediaries in a digital ecosystem of new value creation, capturing some of that value, and redistributing it back to the data owners. Importantly, data trusts separate the collection and administration of personal data from its processing and utilization, thereby lowering barriers to A.I. innovation for less capitalized startups. By using data to fund a UBI, data trusts could help level people’s opportunities for prosperity in the future.

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  • American workers are refusing to take bad jobs — and that’s good for everyone, economists say

    Some workers learned to stand up for themselves a bit more during, and due to, the pandemic. Will this trend last?

    By MATTHEW ROZSA

    One of the first things President Joe Biden did after taking office was issue an executive order that defined when someone could decline a job opportunity and still continue to receive unemployment benefits. As his predecessor, Donald Trump, had not established a federal standard as to when states should protect citizens who refuse to work in unsafe conditions, Biden moved to fill the void.

    The move was timely. After all, news reports are full stories of workers hesitant to move back to jobs that pay them less than what they earned from COVID-19 relief benefits; some are hesitant to face employers who might put them in physically unsafe conditions. Many media pundits, particularly on the right, saw this as an opportunity to scold such workers by seizing on a common assumption in capitalist societies: if you are offered a job and refuse to take one, you must be lazy.

    Yet the reality is that workers in the COVID-19 era aren’t growing lazy. They’re growing empowered.

    Take Blake Baxendell. Two months ago he mustered up the courage to leave a work environment he described as “toxic.” The workplace atmosphere fostered an “unhealthy culture” which preceded the COVID-19 pandemic but was aggravated by it.

    “When the stay-at-home orders were put in place, our boss found a loophole to deem us essential when we were not,” Baxendell told Salon by email. “The company was small and only had about 12 employees, 6 per location. This created anger among the employees as we felt that our health did not matter. No one understood why we had to come into the office and risk our health.”

    The boss also refused to follow guidelines from the Centers for Disease Control (CDC) and, as a result, Baxendell heard that he had been in close contact with an employee who had tested positive. Because Baxendell has an auto-immune disease, he left for the day and got a test, which thankfully came back negative.

    “My boss would later make fun of me or anyone else who felt unsafe,” Baxendell said. “Eventually the entire company I worked for left. I would say COVID played a role in it, but the bigger issue was the unethical behavior coming from the leadership. This last job gave me the courage to finally do what I never thought I could do and that was to start my own company. After the experience I had with this past employer, I plan to only work for myself.”

    Not all of the newly empowered COVID-era workers are employees. Some are self-employed, like Dan Chan, a magician.

    “I had to give up weekends because I’m an entertainer,” Chan wrote to Salon, explaining that he felt at the mercy of his clients and suffered socially as a result.

    “Before the pandemic, no one would even think of hiring a magician over Zoom — honestly even magicians didn’t think performing over Zoom would work,” Chan explained. “Magicians were all out of work and had absolutely nothing to do. At the same time corporations [that], out of necessity, needed to spice things up in their Zoom meetings took a small risk.” In other words, his clientele expanded to include “virtual” magic. 

    “Some magicians began to realize that in many ways the virtual medium had its advantages and I was one of the pioneers who leaned into it,” Chan says. He compared it to street performing or shows in the Wild West: “We’d give out free samples to anyone who’d be willing to watch.”

    Vanessa Rodriguez, who now works as a content writer, left her job as a medical sales representative because the pandemic helped her realize that it was taking too much out of other important areas of her life.

    “The job entailed a lot of traveling and people-pleasing,” Rodriguez told Salon by email. “As a result, I was away from home a lot of times, and had to pull in late nights. As the pandemic hit, I got to work from home (a completely different industry) and I realized just how much I was missing out on — work flexibility, work-life balance, not having to act all bright and cheery even if I was not feeling it, and not having to dress up.”

    She added, “It’s been a full 360 for me.”

    Far from being something that federal and state governments should worry about, economists Salon spoke with say workers demanding decent treatment as a precondition to actually working is a positive social and economic development. There are multiple reasons for this; one of them is that it challenges a toxic notion about what it takes to get people to work, according to Richard Wolff, professor emeritus of Economics at the University of Massachusetts–Amherst. 

    “There are lots of ways of getting people to work, if that’s what you want to do, and forcing them to do it by saying that ‘we will punish you’ is not,” Wolff explained. “There are better ways. Maybe the problem isn’t that the person is amiss, but that what you’re asking them to do is a bad fit with who they are.”

    Karl Widerquist, an American political philosopher and economist at Georgetown University’s Qatar campus, told Salon that an environment in which employers feel compelled to pay their workers more and provide them with a healthy work environment ultimately benefits everyone. 

    Universal basic income programs — or those that guarantee everyone the minimum amount of money that they’ll need to survive — can, in the long term, give citizens the ability to choose the right kind of work and help businesses find the best employees.

    “You get healthier communities and healthier jobs, and basic income can help give the workers leverage to change the going wage,” Widerquist told Salon. “Firms still maximize their profits, but with all of them paying higher wages, the market adjusts and that becomes normal.”

    Stephen Nuñez, a lead researcher on guaranteed income at the Jain Family Institute, did not feel that the temporary basic income provided by COVID-19 relief packages were disincentivizing work. Even if that trend does exist (and Nuñez said the data is incomplete), there are a number of possible explanations. For one thing, most people know that the current benefits are not permanent, so it would seem illogical for them to make long-term decisions based on them.

    There are also still COVID-19 impediments to working.

    “Because we’re in the middle of a public health emergency, things like childcare and transportation and so forth are not back to normal yet,” Nuñez explained. “It makes it very difficult for people to actually get to work.” He also noted that, because people have been able to spend money with stimulus checks, the demand side of the economy may be so strong that employers want to hire even though employees cannot work.

    “They want to hire maybe more quickly than people are willing or able based off of health conditions and based off of things like childcare and other supportive services,” Nuñez told Salon.

    To this, the classic conservative reply is that if we do not have everyone working in society, our civilization will collapse. Laziness is, this thinking goes, inherently evil. But at least part of that assumption is not really accurate.

    “In most modern societies, roughly half of the people are in any real sense workers,” Wolff explained. “Long ago we became societies in which a huge number, often exceeding half, live off the surplus produced by the other half or whatever the proportions happen to be.

    The real issue in this society is not having everybody work, because that’s never been the case and it hasn’t been the case in modern society for centuries, but who amongst us is going to do the work and what exactly is going to be demanded of the people who don’t do the work.” For example, it is generally accepted for young students and the retired elderly to not work.

    “We have the notion that we have to be somehow draconian in our society, because everybody has to work, as if there is really nothing but work to be done and anyone who is an adult and isn’t ‘working’ is somehow a derelict,” Wolff told Salon. “That’s kind of silly.”

    ____________________________________________________________

    About the Author:

    MATTHEW ROZSA: Matthew Rozsa is a staff writer for Salon. He holds an MA in History from Rutgers University-Newark and is ABD in his PhD program in History at Lehigh University. His work has appeared in Mic, Quartz and MSNBC.

    Post originally appeared in Salon: https://www.salon.com/2021/06/19/american-workers-are-refusing-to-take-bad-jobs–and-thats-good-for-everyone-economists-say/

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  • U.S. Unemployment Rescue Left at Least 9 Million Without Help

    Red tape, fraud-prevention efforts, and overwhelmed agencies left many Americans without benefits. 

    By: Shawn Donnan and Reade Pickert

    Barb Ashbrook, who lost her part-time job at a food court in downtown Indianapolis in March 2020, was denied unemployment benefits because she was earning more than $121 a week from a second job at a Dollar Tree store. Ray Rand, laid off by an RV rental company in Las Vegas, was rejected after missing a 48-hour deadline to respond to an inquiry while in the hospital. Anthony Barela, an Albuquerque barber, spent months trying to find out why he didn’t get benefits.

    They’re three of at least 9 million Americans thrown out of work by the pandemic who didn’t receive any unemployment benefits despite the largest deployment of economic aid in U.S. history, according to a Bloomberg Businessweek estimate based on a review of more than a year’s worth of U.S. Department of Labor data. That’s a hole in the safety net as big as the population of Virginia.

    Now, as the U.S. reopens, unemployment assistance has become the focus of a political debate. Critics say the programs enacted during the pandemic may be undermining the recovery by discouraging jobless Americans from looking for work—an argument challenged by many labor economists and top White House advisers.

    More than half the states, almost all with Republican governors, have announced they will stop paying a $300-a-week federal supplement before it’s set to expire in September. A majority of those are also ending a program created for workers not previously eligible for unemployment insurance.

    The controversy has deferred a frank assessment of the system that will remain: an 85-year-old New Deal creation that proved woefully inadequate in an emergency.

    Half the 64.3 million people who sought help through the regular unemployment program from March 1, 2020, through March 31, 2021, were rejected or not paid, the data show. That’s twice the rate during the Great Recession.

    Many of them then applied for Pandemic Unemployment Assistance (PUA), a program designed by Congress to provide a cushion for gig workers and the self-employed, only to be turned down for that as well.

    To be sure, the scale of the help has been remarkable. About 49 million workers—30% of the U.S. labor force—received at least one weekly payment, according to the data. More than $750 billion in unemployment benefits has been paid by the U.S. Treasury, compared with $28 billion in 2019. Yet this crisis has illustrated the system’s frailties, including aging IT infrastructure, understaffed state agencies, and often arbitrary rules.

    The data also highlight stark differences among states. California paid more than 70% of claims for regular unemployment during the 13 months beginning in March 2020, while Montana didn’t pay benefits to 89% of those who applied. The maximum payment ranges from $235 a week in Mississippi to $855 in Massachusetts. Almost all states offer 26 weeks of benefits in normal times, though in Alabama the limit is 14 weeks. “Depending on where you live when you lose your job, you either have a program that will help you bridge to your next job or you’re in danger of losing your apartment,” says Rebecca Dixon, executive director at the National Employment Law Project, a research and advocacy group.

    The data are as messy and uneven as the system itself, complicated by the way states report their numbers and what officials say have been millions of cases of suspected fraud. Florida hasn’t filed monthly reports about payments for the PUA program since September 2020, a lapse state officials won’t explain. In Nevada officials say their PUA figures are inflated by 1 million suspected fraud cases, but the state has reported just one fraud payout in that program, worth $3,108, to the U.S. Department of Labor.

    “The unemployment system is broken,” says Senator Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee and is leading a push for more generous benefits, a wider eligibility pool, and automatic adjustments in hard times. Before the pandemic, Wyden says, “state after state sabotaged their unemployment system by making benefits as hard as possible to access.”

    A spokesperson for the Labor Department said in an email that the new programs created by Congress greatly expanded coverage. But he acknowledged that an unprecedented increase in new claims, coupled with low administrative funding, a fragmented system of state programs, limits on eligibility, and a wave of fraud, contributed to the large number of people “who weathered the pandemic without the aid of unemployment benefits.”

    In Indiana, 1 in 3 people who applied for unemployment didn’t receive any help. Among the denied was Ashbrook. The 64-year-old, who lives alone, had cobbled together a variety of part-time jobs in the Indianapolis area. When the lockdown hit, she was logging 16 to 20 hours a week as a $9-an-hour customer service representative at Dollar Tree and about as many hours for similar pay as a cashier at the food court in an office building downtown. Aramark, the company that operated the food court, laid her off in March 2020.

    She applied for unemployment, hoping to take advantage of provisions designed to fill in for lost income. But her application was rejected. “They told me I couldn’t get unemployment because I was making more than $120 a week at Dollar Tree,” Ashbrook says. Under Indiana’s rules, earning more from a part-time job than you would get in benefits disqualifies you for any help for lost income.

    That meant she couldn’t access the $121 in regular unemployment benefits each week she might have been entitled to or the $600 weekly federal top-up. She didn’t appeal or apply for PUA, believing she wasn’t eligible. Then in August, $5,892 turned up in her bank account. A month later an additional $900 landed. Recognizing what she thought was a cruel mistake, she sent $4,000 in money orders back to the state. In November, Indiana officials acknowledged the error and she was forced into a repayment plan for the rest that’s haunted her since. After a payment went missing in the mail in March, the state threatened to garnish her wages and tax refunds. “I didn’t get anything out of the deal, and I ended up owing money,” she says. She’s turned to the courts to try to have what by mid-June was $1,700 in debt forgiven, but she hasn’t succeeded. A spokesman for Indiana’s labor department declined to comment about the case.

    Jennifer Terry, Ashbrook’s lawyer at Indiana Legal Services, a nonprofit that provides free assistance to low-income state residents, says the case isn’t unusual. More than a year into the pandemic, she and her colleagues are still working through hundreds of requests for help from people denied benefits retroactively by state officials. That’s often because employers objected to claims months after they were filed, saying workers left voluntarily or declined to return. Terry says businesses have an incentive to do that because their unemployment insurance premiums are determined in part by how many claims laid-off employees file.

    The federal government doesn’t track denial rates for unemployment benefits. To establish how the system performed during the pandemic, Bloomberg Businessweek examined data filed by states, including the number of claims and those receiving first payments for regular unemployment and PUA.

    This was supplemented by public information obtained from states and in response to queries.

    The number of people not paid is incomplete and likely higher than the 9 million estimate. The analysis excluded Arizona and Pennsylvania because of data distortions. Arizona reported receiving more than 4 million PUA applications despite having a workforce of 3.6 million people. Officials there blamed fraud, the extent of which they say they’re still trying to determine. Officials in Pennsylvania said the incomplete statistics reflected how the crisis had strained the system.

    Available data on fraud illustrate the opaqueness of the system. Many states can’t say how extensive it is and haven’t reported numbers to the federal government. The U.S. Department of Labor’s inspector general estimates potential fraud could be worth “tens of billions of dollars.” States by the end of March had reported paying out less than $2 billion in fraudulent claims since the start of 2020.

    But there’s also evidence that innocent people have been caught up in efforts to clamp down on fraud. Federal data show officials in Nevada made payments on only one-tenth of applications for PUA in the program’s first 13 months. Nevada says the number of applicants is inflated by fraud, but lawyers say the state has used the label too liberally. “They just deny, deny, deny,” says Mark Thierman, a Reno lawyer leading a lawsuit on behalf of gig workers denied benefits that’s before the Nevada Supreme Court. “Their definition of fraud is they disagree with you.”

    One plaintiff is Rand, 53, who lost his main income when tourists vanished from Las Vegas and the company where he was an IT consultant closed. He was denied regular unemployment benefits and applied for PUA that May. He was approved for $240 a week, but the money didn’t turn up. Then in January he was denied benefits altogether after missing a deadline to respond to an inquiry.

    This month his fortunes shifted. On June 18, more than a year after he filed his claim, $12,876 landed in his bank account. He also got a job as a computer technician for the local school district. By then, Rand, who lives alone, had sold his Kia Sedona and other belongings. He eked out a living on food stamps, rental assistance, and stimulus payments, stressing over a possible eviction. His credit report is ruined, and he owes money to the IRS. “It’s been hell,” he says.

    For some, the assistance arrived too late. Ralph Wyncoop, a former bus driver who moved to Las Vegas a few years ago to drive for Uber, applied for PUA benefits as soon as Nevada began accepting applications in May 2020. He’d already lost two months of income and been rejected for regular unemployment. He was told he was eligible for $455 a week backdated to March 15 based on his income history. When the money didn’t come through, he joined Thierman’s lawsuit.

    In July, Wyncoop’s PUA application was rejected. Officials said they couldn’t confirm his identity even though he submitted copies of his driver’s license, Social Security card, Veteran ID, a car insurance bill, and tax returns. Leah Jones, one of his lawyers, says Wyncoop was told he needed to present a utility bill. It was something he couldn’t provide, Jones says, because his landlord paid for utilities.

    Wyncoop’s health deteriorated. He had a heart attack late last summer and was hospitalized. In October he was evicted from his bungalow for failing to pay rent. He began sleeping in his car. “I have no idea why I was denied and cannot reach anyone to clear up my problem,” Wyncoop wrote to the state labor department. “By not paying me what I am entitled to under the CARES ACT, I am now homeless, bankrupt, and in declining health daily. Please Help Me.”

    Wyncoop finally started receiving benefits the day before Christmas, after a judge found the state in contempt of an order to speed up payments to an estimated 100,000 PUA recipients like him. By then his health had worsened. He was found dead in a motel on March 17, almost a year after he first applied for unemployment.

    The Nevada labor department said in an email that its decisions were based on federal guidance. “These guidelines ensure that people eligible for benefits are paid and those that are not eligible are not paid,” a spokeswoman wrote. Officials declined to comment on individual cases, citing privacy laws.

    A plan pushed by Wyden and Colorado Senator Michael Bennet, a fellow Democrat, would set base unemployment benefits at 75% of lost pay compared with the roughly 45% that’s the norm now. It would establish federal benefits for anyone looking for work, create a permanent stopgap scheme akin to the PUA, and increase benefits automatically in times of economic turmoil. The Department of Labor said the crisis illustrated the need for widespread reform of the unemployment system, something President Joe Biden has called for.

    Delays in payments and denials have led to lawsuits in states including Nevada, New Mexico, New York, Oregon, and Virginia. Their success has been limited.

    In Oregon and Virginia, court-approved settlements required officials only to speed up efforts to clear backlogs. The lawsuits have done little to address the holes in personal finances and damaged credit scores many of those denied benefits are confronting.

    Barela, a plaintiff in the New Mexico case, had to quit working as a barber when the state locked down last year. Like many in his profession, Barela rented a chair in a barbershop, which made him a contractor. More than a year later, he’s still trying to recover from the state’s refusal to approve him for any benefits.

    He spent months trying to get someone to explain why he was rejected for PUA, a program set up to help contractors like him. Once he was on hold for four hours, waiting to speak with a supervisor, Barela says. “He said: ‘Well, we’re not going to help you. You’re not going to get any help from us. Don’t call back.’ And then they hung up on me.” Lawyers for the state said in a written response to the lawsuit that they didn’t have enough “identifying information” to comment on Barela’s circumstances.

    To support his fiancée and the three school-age kids they have between them, Barela worked nights at a UPS warehouse and afternoons at a Container Store outlet for a few months starting last October. He’s back cutting hair in Albuquerque, but this time as an employee instead of as a contractor, earning $10.50 an hour.

    Barela says he has some sympathy for those who describe unemployment as a generous handout keeping people out of the workforce. But he also feels ignored. “I’ve heard a lot of people speak and say that they’re making more money than they would when they’re working in their jobs,” Barela says. “But then I see people in my situation who really needed the money.”

    Methodology
    To figure out how many Americans fell through the cracks of the unemployment system,     Bloomberg Businessweek used state and federal data to calculate the difference between the number of claims filed over a 13-month period and the number of people who received first payments, both for regular unemployment insurance and the new Pandemic Unemployment Assistance (PUA) program. After consulting with federal and state officials, as well as independent experts, we used three different methods to calculate the number of applicants in each state who weren’t paid. We defaulted to the lowest number to arrive at the estimate of at least 9 million. Arizona and Pennsylvania were excluded from the analysis because of questions about the quality of their submitted data. While it’s not possible at this time to determine the extent to which initial claim numbers have been inflated by fraud, our estimate is below the more than 16 million people U.S. Department of Labor data show didn’t receive any payments after filing claims for PUA, which has been the main target of scammers.

    ______________________________________________________________

    Original post can be found at: https://www.bloomberg.com/news/features/2021-06-23/can-outdoor-dining-fix-its-accessibility-problems

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  • Andrew Yang May be Out, But Basic Income is In

    The concept of monthly government payments to reduce poverty and increase economic security among the poor and middle class existed long before Andrew Yang threw his hat in the ring for president. 

    By: STACEY RUTLAND

    Results of the New York City mayoral primary race are rolling in. Though it is not yet clear who the winner is, it is clear who the contenders are.

    Andrew Yang, ever the pragmatist, conceded on Wednesday.

    While it may be the end of Yang’s political aspirations for now, it is critical to recognize that his signature issue of basic income is here to stay—with a movement and footprint bigger than any one election or politician. 

    Yang deserves tremendous credit for bringing the idea of basic income to the masses. It is also important to understand that the concept has been around for centuries, and tested here in America for decades. Supporters have embraced the concept of monthly government payments to reduce poverty and increase economic security among the poor and middle class long before Yang threw his hat in the ring for president. 

    Basic income has deep roots in racial justice movements—counting the National Welfare Rights Organization, Dr. Martin Luther King, Jr. and the Black Panthers among its historic proponents.

    There have also been guaranteed basic income pilots in the U.S. that predate Yang’s rise, led by Black politicians and advocates, from Michael Tubbs’s Stockton Economic Empowerment Demonstration to Aisha Nyandoro’s Magnolia Mother’s Trust. (Editor’s note: Ms.’s Front and Center series offers first-person accounts of the Black women enrolled in this program.)

    One could assume that basic income is now a commonly-understood concept because Yang got further politically than any pundit thought he would during the 2020 presidential race. However, evidence supports an alternative: The idea did not do well because a messenger was given an extended platform, but rather the messenger did well because of the strength of the idea. We saw this play out when the DNC winnowed the field of candidates by implementing a grassroots component to debate qualifications for the 2020 presidential primary race—the reason Yang continued to appear at debates was because of the recognition by everyday Americans that the economy simply does not work for most people.

    Drawn to the efficacy and impact of a policy designed to share prosperity and provide opportunity to all, they made the small-dollar donations that drove Yang’s continued presence on the debate stage. Yang’s success was due to grassroots support. And that grassroots support for basic income has continued well beyond his campaigns. 

    During his presidential race, Yang often said that he would consider his campaign a success if other politicians embraced the idea of basic income and worked toward direct cash policies.

    Over the past 18 months, more than 50 mayors have joined Mayors for a Guaranteed Income, with dozens testing the impact of direct cash programs via pilots. Boards of Supervisors in Los Angeles and Santa Clara have joined this common cause.

    Los Angeles is launching the largest pilot in the country that’s also to be fully-funded by public dollars and California Governor Gavin Newsom included $35M for pilot funding in his budget, marking the first time a state has committed funds toward guaranteed income disbursements. 

    At the federal level, President Joe Biden’s American Rescue Plan is one of the largest expansions of cash policies in our nation’s history between additional stimulus checks and a one-year expansion of the child tax credit (CTC). The CTC will essentially provide a guaranteed income to nearly every parent in America, with payments of up to $300 per child monthly starting next month. Congressional candidates like Cori Bush and Charles Booker had significant success in their races while connecting racial and gender justice with economic justice and endorsing a guaranteed basic income as part of the solution. Rep. Ilhan Omar recently tweeted she will be presenting basic income pilot legislation in the House—an idea she calls “long overdue”. 

    Supporting all of this political growth is a thriving, energetic grassroots community who rolls up their sleeves everyday to organize events, have conversations with their neighbors and write letters to their members of Congress. As the founder of an organization harnessing the power of these activists to create a national basic income, I hear daily why people across the country support this idea—and all the reasons transcend any one person or political race.

    Some have been struggling for years and see basic income as a way to equalize an economy that has been engineered to work for the wealthy at the expense of everyone else. Others worry about automation and job loss. Many are driven by the racial and gender justice implications targeted cash programs would have on closing the income gaps between Black and white Americans and women and men.

    All share the fundamental belief that in the richest country in the world, we can and should ensure that no one falls through the cracks by providing everyone a modicum of financial security.

    Basic income is an idea with staying power that has a wide range of champions and supporters. All great movements must grow beyond a single messenger to truly achieve the meaningful change they aspire to, and basic income has done just that.

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  • Fourth stimulus check: can the decrease in consumer spending impact its approval?

    New data on consumer spending in the retail sector dipped in May after peaking in March with the passage of the third round of stimulus checks. Will another check be sent?

    By: Maite Knorr-Evans

    According to data from the Department of Commerce, consumer spending in retail increased almost ten percent in March after the third round of stimulus checks were sent. However, spending levels declined in April, increasing .09%, and continued their downward trend even further in May to -1.3%

    The data from federal agencies shows that after the third direct payment was distributed, people spent more. These increases were thought to be a cause of virtuous cycles wherein businesses taking in more revenue, would be more likely to staff up. With increases in the workforce, more money begins to circulate throughout the economy as workers begin spending their paychecks. But, this is only partly shown in the data, with unemployment continuing to decline, but spending also facing a downward trajectory. 

    Could declines in retail spending mean another stimulus check is on the horizon?

    Some policymakers looking at consumer spending data and the beneficial impacts direct payments have had on families in the US, support passing an additional stimulus check. However, momentum seems to be waning on Capitol Hill as the legislatures try and work out a deal over infrastructure, and other priorities, before heading home for summer recess.

    While the May numbers did not surpass the levels seen in April, some economists are not concerned as they are still above pre-pandemic spending levels. What would begin to concern lawmakers and experts is if the decline continues to levels seen in the early stages of the pandemic or even before. For context, in February 2020, consumer retail spending totaled 525 billion dollars. Last month that figure was 620 billion.

    The New York Times reported on their discussions with experts who believe the data shows that “consumers have most likely spent all they need to furnish their homes or upgrade their phones during the homebound months of the pandemic.” Rather than spending in the retail market, they are shifting to others, including travel and dining.

    An entire picture of spending in the economy will be available later this month when the Bureau of Economic Analysis releases data on consumer spending across markets and sectors. Throughout 2021, retail spending and the broader indicator have moved in unison, meaning that households may be holding onto their money or do not have the disposable income needed to spend at the levels they did in March.

    If spending levels continue to drop, it may be a sign to lawmakers that more direct payments are needed. June, July, and August spending data will be critical to understanding the current trends for two main reasons.

    The first factor is the impact vaccination will have on spending as summer in the US begins. With more Americans reporting that they feel comfortable traveling, dining, going to the movies, concerts, and sporting events, there is sure to be an impact on household spending.

    However, the second factor could lead to a decrease in spending. A student released by the National Bureau of Economic Research found that almost seventy percent of unemployment claimants have seen incomes that surpass the levels from when they were working. As dozens of states cut federal pandemic-related unemployment benefits and workers reenter the labor market to jobs that pay them less than what they were making on unemployment, spending could decrease.

    In September, when federal unemployment benefits end across the US, lawmakers will have a multitude of indicators and data to evaluate whether the economy would benefit from another round of stimulus checks.

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  • Conservative Opposition Party in Japan Calls for Universal Basic Income

    Opposition Ishin pledges streamlined social safety net as election nears by consolidating social security programs into a single basic income plan. 

    By: TSUBASA YODA

    Japan’s conservative opposition Nippon Ishin no Kai (Japan Innovation Party) unveiled a new economic policy plan Monday that would consolidate much of the country’s social welfare system into a universal basic income program.

    The party envisions paying between 60,000 yen and 100,000 yen ($550 to $910) per month to everyone regardless of age. This would replace other types of aid such as public assistance programs, basic pensions and child allowances, which the party argues would make the social safety net more streamlined and efficient.

    The proposal — which resembles the $1,000-per-month universal basic income proposal put forward by former U.S. presidential candidate Andrew Yang — is part of a broader economic reform plan being rolled out by the Ishin party ahead of a general election coming up later this year. 

    Ishin also advocates reducing consumption, income and corporate taxes and eliminating the estate tax. The party claims the tax breaks will stimulate consumption and economic growth, which will in turn generate revenue together with administrative reforms. It aims to reduce and simplify deductions as well.

    The party also calls for easing rules on layoffs to make the labor market more fluid and raise productivity of society as a whole.

    The economic policy plan will be included in Ishin’s party platform for the lower-house election that will take place in or before October. It will be included in the party platform, along with such measures as cutting lawmaker pay and granting more powers to regional governments.

    The post Conservative Opposition Party in Japan Calls for Universal Basic Income appeared first on Basic Income Today.

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  • What the Rich Don’t Want to Admit About the Poor

    The U.S. economy needs a sprawling labor force willing to work tough jobs at crummy wages to keep goods cheap and services plentiful.

    By: Ezra Klein

    I’m not going to pretend that I know how to interpret the jobs and inflation data of the past few months. My view is that this is still an economy warped by the pandemic, and that the dynamics are so strange and so unstable that it will be some time before we know its true state. But the reaction to the early numbers and anecdotes has revealed something deeper and more constant in our politics.

    The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages.

    On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response.

    [Hear more from Ezra Klein by following his New York Times Opinion podcast, “The Ezra Klein Show.”]

    Reports that low-wage employers were having trouble filling open jobs sent Republican policymakers into a tizzy and led at least 25 Republican governors — and one Democratic governor — to announce plans to cut off expanded unemployment benefits early. Chipotle said that it would increase prices by about 4 percent to cover the cost of higher wages, prompting the National Republican Congressional Committee to issue a blistering response: “Democrats’ socialist stimulus bill caused a labor shortage, and now burrito lovers everywhere are footing the bill.” The Trumpist outlet The Federalist complained, “Restaurants have had to bribe current and prospective workers with fatter paychecks to lure them off their backsides and back to work.”

    But it’s not just the right. The financial press, the cable news squawkers and even many on the center-left greet news of labor shortages and price increases with an alarm they rarely bring to the ongoing agonies of poverty or low-wage toil.

    As it happened, just as I was watching Republican governors try to immiserate low-wage workers who weren’t yet jumping at the chance to return to poorly ventilated kitchens for $9 an hour, I was sent “A Guaranteed Income for the 21st Century,” a plan that seeks to make poverty a thing of the past.

    The proposal, developed by Naomi Zewde, Kyle Strickland, Kelly Capatosto, Ari Glogower and Darrick Hamilton for the New School’s Institute on Race and Political Economy, would guarantee a $12,500 annual income for every adult and a $4,500 allowance for every child. It’s what wonks call a “negative income tax” plan — unlike a universal basic income, it phases out as households rise into the middle class.

    “With poverty, to address it, you just eliminate it,” Hamilton told me. “You give people enough resources so they’re not poor.” Simple, but not cheap.

    The team estimates that its proposal would cost $876 billion annually. To give a sense of scale, total federal spending in 2019 was about $4.4 trillion, with $1 trillion of that financing Social Security payments and $1.1 trillion supporting Medicaid, Medicare, the Affordable Care Act and the Children’s Health Insurance Program.

    Beyond writing that the plan “would require new sources of revenue, additional borrowing or trade-offs with other government funding priorities,” Hamilton and his co-authors don’t say how they’d pay for it, and in our conversation, Hamilton was cagey. “There are many ways in which it can be paid for and deficit spending itself is not bad unless there are certain conditions,” he said. I’m less blasé about financing a program that would increase federal spending by almost 20 percent, but at the same time, it’s clearly possible. Even if the entire thing was funded by taxes, it would only bring America’s tax burden to roughly the average of our peer nations.

    I suspect the real political problem for a guaranteed income isn’t the costs, but the benefits. A policy like this would give workers the power to make real choices. They could say no to a job they didn’t want, or quit one that exploited them. They could, and would, demand better wages, or take time off to attend school or simply to rest. When we spoke, Hamilton tried to sell it to me as a truer form of capitalism. “People can’t reap the returns of their effort without some baseline level of resources,” he said. “If you lack basic necessities with regards to economic well-being, you have no agency. You’re dictated to by others or live in a miserable state.”

    But those in the economy with the power to do the dictating profit from the desperation of low-wage workers. One man’s misery is another man’s quick and affordable at-home lunch delivery. “It is a fact that when we pay workers less and don’t have social insurance programs that, say, cover Uber and Lyft drivers, we are able to consume goods and services at lower prices,” Hilary Hoynes, an economist at the University of California at Berkeley, where she also co-directs the Opportunity Lab, told me.

    This is the conversation about poverty that we don’t like to have: We discuss the poor as a pity or a blight, but we rarely admit that America’s high rate of poverty is a policy choice, and there are reasons we choose it over and over again.

    We typically frame those reasons as questions of fairness (“Why should I have to pay for someone else’s laziness?”) or tough-minded paternalism (“Work is good for people, and if they can live on the dole, they would”). But there’s more to it than that.

    It is true, of course, that some might use a guaranteed income to play video games or melt into Netflix. But why are they the center of this conversation? We know full well that America is full of hardworking people who are kept poor by very low wages and harsh circumstance. We know many who want a job can’t find one, and many of the jobs people can find are cruel in ways that would appall anyone sitting comfortably behind a desk. We know the absence of child care and affordable housing and decent public transit makes work, to say nothing of advancement, impossible for many. We know people lose jobs they value because of mental illness or physical disability or other factors beyond their control. We are not so naïve as to believe near-poverty and joblessness to be a comfortable condition or an attractive choice.

    Most Americans don’t think of themselves as benefiting from the poverty of others, and I don’t think objections to a guaranteed income would manifest as arguments in favor of impoverishment.

    Instead, we would see much of what we’re seeing now, only magnified: Fears of inflation, lectures about how the government is subsidizing indolence, paeans to the character-building qualities of low-wage labor, worries that the economy will be strangled by taxes or deficits, anger that Uber and Lyft rides have gotten more expensive, sympathy for the struggling employers who can’t fill open roles rather than for the workers who had good reason not to take those jobs. These would reflect not America’s love of poverty but opposition to the inconveniences that would accompany its elimination.

    Nor would these costs be merely imagined. Inflation would be a real risk, as prices often rise when wages rise, and some small businesses would shutter if they had to pay their workers more. There are services many of us enjoy now that would become rarer or costlier if workers had more bargaining power. We’d see more investments in automation and possibly in outsourcing.

    The truth of our politics lies in the risks we refuse to accept, and it is rising worker power, not continued poverty, that we treat as intolerable. You can see it happening right now, driven by policies far smaller and with effects far more modest than a guaranteed income.

    Hamilton, to his credit, was honest about these trade-offs. “Progressives don’t like to talk about this,” he told me. “They want this kumbaya moment. They want to say equity is great for everyone when it’s not. We need to shift our values. The capitalist class stands to lose from this policy, that’s unambiguous. They will have better resourced workers they can’t exploit through wages. Their consumer products and services would be more expensive.”

    For the most part, America finds the money to pay for the things it values. In recent decades, and despite deep gridlock in Washington, we have spent trillions of dollars on wars in the Middle East and tax cuts for the wealthy. We have also spent trillions of dollars on health insurance subsidies and coronavirus relief. It is in our power to wipe out poverty. It simply isn’t among our priorities.

    “Ultimately, it’s about us as a society saying these privileges and luxuries and comforts that folks in the middle class — or however we describe these economic classes — have, how much are they worth to us?” Jamila Michener, co-director of the Cornell Center for Health Equity, told me. “And are they worth certain levels of deprivation or suffering or even just inequality among people who are living often very different lives from us? That’s a question we often don’t even ask ourselves.”

    But we should.

    _______________________________________________________

    Originally appeared in New York Times: https://www.nytimes.com/2021/06/13/opinion/stimulus-unemployment-republicans-poverty.html

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  • [OPINION] Why Universal Basic Income is a solution to the Philippines’ problems

    ‘With UBI, individuals can determine what they need most, at the price they deem best’

    By: CLARO ARRIOLA III

    The Philippines ended 2020 with poverty and unemployment percentages at alarming levels – 19.8% and 10.3%, respectively. With problems seemingly insurmountable, and with current solutions being ineffective, I propose Universal Basic Income (UBI) as the gamechanger solution for the Philippines.

    Effectively, UBI means allocating a portion of tax revenues for re-distribution to all adult citizens.

    Applying it to a Philippine setting, I propose the following set of features:

    – P1,500 per month per adult citizen 18+ years of age (8-10% of GDP)

    – A “use it or share it” mechanism, in which any amount not withdrawn by the end of the month will be returned and shared in the next cycle

    – A transparent charity system, wherein people can donate to UBI funds

    – A sectoral component, wherein we can target people by region, age, gender, or disease for additional UBI funds or donations. People may also opt to auto-share to their select demographic.

    UBI alleviates immediate suffering

    Giving cashless people P1,500 per month or P50 per day can get them food on the spot.

    Distribution of cash aid through a UBI can also be much easier, through the ATM networks we already have.

    If the government wants to provide more aid to specific recipients, it can just credit the funds to their respective accounts. During a pandemic, we can even have combination mobile ATMs/palengkes to increase access to both money and goods.

    The transparent charity feature can also help private donations reach more people. I believe that the guarantee that you will have at least P1,500 (or P3,000 for a two-adult household) consistently until your death, will also entice people to be a bit more generous.

    UBI creates jobs

    The UBI effectively re-distributes P90-billion worth of disposable income to Filipinos, who are mostly low income earners, every month. These Filipinos will likely spend this cash for their immediate needs, which will create more jobs at the local level.

    Demand for goods and services will go up, which means more people will be needed to fulfill these goods and services. There will be more taho vendors, more farmhands, more barbers, etc.

    UBI reduces government control over the purse

    Distribution would be straightforward, without the need for city hall employees to hand out the money. With a UBI system instead of government-procured aid, we can reduce the bad players in government, who practice overpricing and supplier bribery. Each withdrawing individual will now effectively be a checker of the people’s budget. 

    Individuals can now have the power to select which type of aid they need, too.

    One person can buy monggo, another can buy their brand of corned beef, yet another can buy a cellphone for their child’s homeschooling needs. With UBI, individuals can determine what they need most, at the price they deem best.

    UBI can be operationalized relatively quickly

    Universal programs are easier to implement due to the elimination of evaluation criteria, as compared to welfare with its selection processes. With no selection process, bureaucracy will be limited and edge cases will be assisted. No subset of people will feel disenfranchised and actively campaign against the program.

    We can also leverage the National ID program and enrol people in bank accounts for the UBI.

    In terms of how to pay for it, there are multiple options depending on each person’s acceptability. My initial inclination is to look into adjusting tax exemptions brackets and consolidating existing welfare programs, which can also be done relatively quickly.

    I can see this being done for the most vulnerable (10 million people) in 1-2 years, and for all adult citizens in 5 years.

    UBI leads people to better situations

    A common fear about UBI is that people will quit their jobs, but commonly, people will only quit jobs that do not work for them.

    With larger amounts of UBI, there might be an issue of fewer people working and being supported by people who work. That is why we target the payments at only 8-10% of the GDP, or P1,500 per month. People will likely still work to fulfill all their needs.

    If there are people who leave their jobs, they would be similar to these cases:

    • The Caviteño carpenter who works in Metro Manila for minimum wage. He spends 5 hours of his day in his daily commute. He will try his luck with jobs in Cavite instead for a more sustainable working setup.
    • The kasambahay who gets paid a kasambahay minimum wage (P3,500). She will go back to her province instead to help her father sell their farm produce, and be with her children during the week to teach them how to read and write.
    • The fast food staff who just has one more year in her public college education in the best public college in her area. She and her parents are now getting P4,500 every month, on top of her parents’ income as factory workers.

    UBI restores human dignity to people who have been in bad situations for the longest time.

    UBI provides a path forward 

    The UBI is a foundation program. It will definitely not solve everything.

    UBI and similar programs have been piloted in countries such as the United States, Finland, Canada, and Kenya, and they have had measurable positive impacts on poverty, education, and health indicators, such as increases in household expenditures, purchases of livestock assets, school enrolment and attendance, and health-seeking behaviors.

    All of these successes were on a small scale, in foreign lands, with cultures different to ours. I firmly believe, however, that the first large-scale implementation of UBI will be even more impactful if done in the Philippines. 

    _______________________________________________________

    About the Author: Claro Arriola III is an industrial engineer by training and profession. He values efficiency and effectivity, which is why he’s drawn to programs such as UBI.

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  • Don’t Just Send People Money During a Pandemic—Do It All the Time

    The evidence is in: Sending out direct cash payments has been a full-blown success—and we can’t afford to stop.

    By: JIM PUGH 

    It’s become almost a cliché in the politics of Washington, D.C.: Every time someone proposes expanding a social program or creating a new one, scores of politicians, lobbyists and so-called economic ​“experts” will pop up to tell you that it will cost too much and we can’t afford it. Somehow, money is never an issue when it comes to tax cuts for the wealthy and corporations or increasing our military budget, but programs that support everyday people are just too damn expensive.

    A new analysis from the University of Michigan on the impact of recent stimulus payments adds to a growing body of evidence that shows when it comes to direct cash assistance programs, cost is not a prohibitive issue. In fact, for social programs like these, we may be unable to afford not to do them.

    According to the analysis, which looked at data from the Census Bureau Household Pulse Survey, in the weeks following the stimulus check payments in December 2020 and March 2021, households across the country saw a significant decrease in their material hardship. American families reported increased food security, a greater ability to pay for household expenses and less anxiety. This effect was particularly pronounced in low-income households and households with children — in the six weeks following the passage of the December 2020 Covid relief bill, amongst families with children, the rate of not having enough to eat fell by 21% and the rate of having difficulty paying for household expenses fell by 24%. These rates dropped again by 23% and 31%, respectively, following the passage of the American Rescue Plan in March 2021.

    These findings align with the results of a previous analysis in 2017 from the Roosevelt Institute which looked into various programs that provided direct, unconditional cash to individuals in the United States and Canada, such as the Alaska Permanent Fund Dividend and the Eastern Band of Cherokees casino dividend program.

    Both of these analyses show the same dynamic: when people receive money with no strings attached, they spend it on the things they need, leading them to live healthier, less anxious lives.

    While these outcomes are certainly beneficial for recipients in the immediate term, the broader implications of these changes are just as important. When people don’t have food or are living in poverty, it’s not just a burden on them — it’s a burden on all of society. These conditions are directly tied to poorer health outcomes, which puts a drain on our nation’s healthcare system. Poor people are more likely to turn to crime as a means of supporting themselves. Those in poverty may require continued support from our inadequate existing social welfare programs, relying on programs like food stamps, housing assistance and disability insurance to barely make ends meet.

    The social implications of poverty are even more pronounced among children, where its impact on cognitive development and educational opportunities may alter their life trajectories. Living in a financially stable household and getting enough to eat could mean the difference between having opportunities later in life and getting trapped in a low-income job with no prospects for advancement.

    When considering the aggregate impact of poverty on our society, the results are staggering. A 2018 analysis in the Social Work Research journal found that childhood poverty alone costs our society more than $1 trillion every year from a combination of lost productivity, increased health and crime costs, and increased costs as a result of childhood homelessness and maltreatment.

    To accurately assess the cost of social programs, we should be comparing the required expenditures to the expected savings from poverty reduction.

    A good example is the recent expansion of the child tax credit — described as a ​“guaranteed income for families”—which is set to provide up to $300 per child per month for kids under the age of six and $250 per child per month for kids between six and seventeen starting in July.

    The Congressional Joint Committee on Taxation expects this expansion to cost $110 billion for the year, while the Center on Budget and Policy Priorities projects that the program will decrease child poverty by more than 40%. Well, 40% of $1 trillion is $400 billion, which means the savings from this expansion are over three times the amount spent.

    There’s good reason to think that the latest round of stimulus checks will also yield positive long-term returns, as people teeter between regaining their financial footing and slipping into poverty. ​“This money is going towards all the bills that weren’t paid during the time we had to take off,” according to Sandy Lash, a single mother in Fort Wayne, Indiana who relied on the stimulus payments to make it through the pandemic. ​“Receiving these checks will enable [us] to make a difference and move up to where we don’t have to struggle anymore.”

    This presents our society with a clear choice: Do we allow increasing poverty and financial precarity to continue to drain away our society’s resources? Or do we make the investment now to create a secure and productive population through programs providing direct cash to families?

    An immediate first step would be to make the expanded child tax credit, which is set to expire after this year, a permanent, ongoing program. Beyond that, establishing a full, national guaranteed income program that provides monthly payments to all Americans — such as the one proposed by Rep. Rashida Tlaib through her Automatic BOOST to Communities Act—could pay massive dividends down the road by fully eliminating material poverty in the United States.

    It’s not hard to see which of these approaches is the more affordable one.

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  • Basic income pilots are graduating from private financing to public financing

    American cities are finally taking the safety net seriously. Is this UBI’s moment to make real progress?

    By: Sigal Samuel 

    It seems like everywhere you look in the US these days, new guaranteed income pilot programs are springing up. Over the past month or so, they’ve launched in Newark, New Jersey; Tacoma, Washington; Denver, Colorado; Cambridge, Massachusetts; and Los Angeles County, California.

    “Guaranteed income” is similar to, but not quite the same as, universal basic income (UBI). Whereas UBI aims to offer enough money for a basic subsistence living to every single adult, guaranteed income might provide a more modest amount — less than enough to live on — to a more targeted group of people (say, the lowest-income people in the population). It can still be life-changing for those who receive it.

    So it was a big deal when California Gov. Gavin Newsom announced on May 14 that he’s including $35 million in his state budget to help pay for local governments to launch their own guaranteed income pilots targeting low-income families. (Individual cities or counties are expected to supplement the funding for the pilots through taxpayer dollars or private donations.)

    That announcement was dubbed “monumental” by Michael Tubbs, the former mayor of Stockton, California, who spearheaded a successful 2017 pilot program there offering $500 to some residents with no strings attached, and who last year created the organization Mayors for a Guaranteed Income. In an emailed statement, Tubbs said Californa’s investment marks “the largest commitment of recurring cash in a state budget — and the first time a state has ever supported guaranteed income pilot funding.”

    I called Tubbs to talk about why this is a major inflection point in the movement for guaranteed income and how the idea of giving people “free money” is graduating from Silicon Valley-funded charity trials to government policy.

    Direct cash payments have gained popularity as a policy tool during the pandemic — and for good reason: As a new analysis of Census Bureau surveys shows, Americans experienced dramatic declines in food shortages, financial instability, and anxiety after receiving stimulus checks. Such findings can help build broad support for a guaranteed income.

    A transcript of our conversation, edited for length and clarity, follows.

    Sigal Samuel

    Do you have the sense that the idea of “free money” is growing up?

    Michael Tubbs

    Yes. I remember when we announced Stockton’s pilot in 2017, everyone looked at me like I was crazy. But I think we’ve seen, particularly in the last year where our main response to the pandemic was cash — from stimulus checks to unemployment insurance to child tax credits — that that was literally how we made it through the Covid-19 pandemic. So I think it’s absolutely become more mainstream.

    Now you have 53 mayors across this country who are saying they’re supportive of a guaranteed income. In 2017, there was one.

    Sigal Samuel

    Funding for these pilots used to come mainly from Silicon Valley technologists and their foundations. I’m thinking of charitable giving from people like Twitter CEO Jack Dorsey or Facebook co-founder Chris Hughes. Now with California’s announcement, funding is starting to come from states, too — so “free money” is moving from the realm of charity into the realm of policy. Is that a big milestone?

    Michael Tubbs

    Absolutely! When we started the pilot in Stockton, I said it’s not going to be sustainable with philanthropic dollars, with kindness dollars. At some point it’s going to have to come from all of us, from tax dollars. And maybe we should have a conversation about our tax code, so those who are able to give money can give, but through the tax system.

    Now having state-infused dollars saying it’s important for the government to study this — it gets us one step closer to a policy.

    Sigal Samuel

    So what do you think should now be the role for the Silicon Valley tech bro megadonors? Do you want them to remain invested and interested in donating to this cause but not be the main funders anymore?

    Michael Tubbs

    No, I’m different than a lot of people. To me, it’s how you use the money. I think it’s great and I’ve been so blessed to have the support of folks like Jack Dorsey and Chris Hughes. I think they’ve been good models. Chris has set up a whole organization [the Economic Security Project] around advocacy and research and policy — like, how do you make this a policy? Jack has supported the research and advocacy efforts.

    I think it’s all about figuring out how do we move from pilot to policy. And when the conversation comes about how do we raise revenue — having these same folks also lead [the conversation] about the ways we should increase revenue, which may include increasing their taxes slightly, and asking them to own that and say, “Yes, this is important.”

    I think it’s one thing for me with no money to talk about “yes, we should increase the marginal tax rate; yes, we should look at the capital gains tax; yes, we should look at everything at our disposal to pay for this” — and it’s another thing for someone who’d actually be impacted by that to lead on that. For me, that would be a great sign of leadership.

    Sigal Samuel

    When thinking about universal basic income versus guaranteed income, do you see one as more ideal than the other? In your mind, is the ultimate goal to end up with UBI as federal policy, but you’re just starting with guaranteed income because it’s easier to sell people on?

    Michael Tubbs

    My whole focus is I am committed to getting rid of poverty. Getting a guaranteed income is something that seems much more politically feasible in this moment, and it helps me achieve my objective.

    I will say, though, that with automation and the way work will change, at some point this country will have to reckon with the idea of a universal basic income. UBI makes sense, and it’s going to make even more sense as we see automation [causing job] displacement. But guaranteed income makes a lot of sense today. I want to make sure we get to those who absolutely need it today and then we build to a point where we get it to everyone.

    I think a guaranteed income puts us in a better position to implement a universal basic income.

    Sigal Samuel

    So you see it as a stepping stone?

    Michael Tubbs

    Yes, I see it as a stepping stone. But in terms of my main objective, it is the stone.

    Sigal Samuel

    UBI has typically been framed as a response to automation-induced joblessness, but guaranteed income is framed these days more as a way to address economic and racial inequality. How did that framing come about?

    Michael Tubbs

    Mayors for a Guaranteed Income was created as a response to the murder of George Floyd. A year ago when George Floyd was murdered, I was still mayor and I was talking to some of my mayor friends about how Dr. [Martin Luther] King called for a guaranteed income in 1967, which was another time of racial unrest in this country. He looked at the protests, at the uprisings, and he talked about a guaranteed income. I told them [the mayors], this is what we’re called to do in this moment. We can respond to the demands of our constituents, which aren’t just about police brutality but also about the violence of poverty, about structural violence.

    We know that financial insecurity is a widespread issue in this country, but it’s acutely an issue in communities of color. We saw the ways in which Covid-19 exacerbated and showed how all our systems have failed people of color. That’s why we started Mayors for a Guaranteed Income … because guaranteed income is also about building economic resilience. So when pandemics happen, when calamity happens, people are in a better position to pivot.

    Sigal Samuel

    Do you view Biden’s child tax credit, which makes money available to all parents as a monthly check (though only for the duration of the pandemic crisis), as a form of guaranteed income?

    Michael Tubbs

    Absolutely. That is a big, big deal. It’s a guaranteed income for families with children. It’s amazing. And it needs to be permanent — that’s the first fight that we all should be focused on.

    Sigal Samuel

    And how bullish does it make you about the prospects of guaranteed income becoming federal policy in the near future? Is that realistic?

    Michael Tubbs

    It’s already federal policy for a year — we just have to make it permanent! And Sen. [Cory] Booker, Sen. Sherrod Brown, and others are really fighting to make this child tax credit permanent.

    And there are bills in Congress talking about guaranteed income. Then-senator, now-VP [Kamala] Harris had her LIFT Act — $500 a month every month to every family making $100,000 or less — which is a form of guaranteed income [though one where recipients must be working to benefit]. And Rep. [Bonnie] Watson Coleman, Rep. [Ilhan] Omar, and others have put forward guaranteed income bills.

    So I do think it’s realistic. Not only realistic — it’s a necessity. This could be our generation’s Social Security.

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  • America’s cruel unemployment experiment

    Cutting off unemployment insurance early is all politics, not economics. This is why UBI is so critical.

    By: Emily Stewart 

    Karen just needs a few more months to finally get her massage business back off the ground. Business was booming before the pandemic, and relying on unemployment insurance hasn’t been easy. “I’ve been saving every penny,” she tells me, describing, with what sounds like a hint of shame, how she’s “learned to live without lights” to try to keep her electricity bill low and has started to shower less to cut down on the water. “I made a lot more money when I was working,” she says.

    It’s taking her some time to get clients to return, and she expected to be back to work and off unemployment insurance by August. But the rug is being pulled out from under her: Texas Gov. Greg Abbott (R) has decided to opt his state out of expanded unemployment benefits early. And he’s hardly alone in that choice.

    Federal unemployment programs that added extra weekly money and extended benefits to those who wouldn’t normally receive them, such as freelancers and people who have been unemployed long-term, were put in place in response to the pandemic. They were supposed to end on Labor Day. Now 25 states — all Republican-led — are cutting them off as early as this week, arguing that the extra support is no longer needed.

    They say that generous benefits are keeping people out of work and causing a labor shortage, even though it’s far from clear that’s what’s going on.

    States are about to undertake a reckless and unnecessary experiment in cutting off expanded unemployment in the midst of a rocky recovery, with the lives and livelihoods of an estimated 4 million workers in the balance.

    “We’ve had this message throughout the pandemic that we’re going to make sure that people who were disadvantaged by it would have the support they needed until things recover,” said Andrew Stettner, senior fellow at the Century Foundation. But from some corners, that message has gone away. “Sympathy for the unemployed disappeared the minute some people got two vaccine doses.”

    Many workers, including Karen (whose last name is being withheld to protect her privacy), have been caught by surprise and are scrambling to figure out what’s next. “I don’t know how I’m going to be able to make my rent,” Karen says. “I’m going to have to start begging clients to come in.”

    Cutting off unemployment early is a political decision, not an economic one

    When the Covid-19 pandemic took hold in 2020, millions of people lost their jobs seemingly overnight, and Congress took sweeping measures to try to provide them with extra support. The federal government added an extra $600 in weekly federal benefits through July 2020. (Those dollars expired for a while but were then reinstated as $300 in extra benefits.) It also enacted programs that would support people who don’t normally qualify for unemployment, such as freelancers, independent contractors, and gig workers, and for people who are long-term unemployed. They also lengthened the number of weeks an unemployed worker could receive benefits once they exhausted their state benefits in an effort to help the long-term unemployed.

    That decision — namely, the extra dollars in federal benefits — was politicized from the start. Many Republicans and even some Democrats argued that $600 was just too much, noting that some people would make more on unemployment than they would at work.

    They also fretted that overly generous unemployment would keep people from returning to work, a perennial talking point among businesses and conservatives. “The extra money was very politicized, even more politicized than other unemployment insurance issues in the past,” Stettner said.

    As vaccines have become more widespread and the economy has started to recover, the fretting around unemployment insurance has reached a fever pitch amid chatter that there’s a labor shortage and speculation about what’s causing it. There’s a simple, capitalistic answer if companies are struggling to find workers willing to work at the wages and conditions they’re offering: raise those wages, and make the conditions more attractive to workers. But the chatter continued, and the April jobs report, which showed far fewer jobs were added to the economy than expected, became the tipping point. Business groups, including the Chamber of Commerce, upped calls for states to end unemployment.

    Montana and South Carolina said they were going to opt out of enhanced unemployment programs, and now half of all states, all Republican-run, have followed suit. All are axing the extra $300, and most are getting rid of the other expanded programs. May’s jobs report didn’t provide much clarity on the situation: The US economy added 559,000 jobs last month, a number that was neither terrible nor stellar.

    “Sympathy for the unemployed disappeared the minute some people got two vaccine doses.”

    Those in support of cutting off jobless benefits early say that it’s an economic decision. But it’s hard not to see it as one largely driven by politics.

    About 8 million fewer people are currently employed than prior to the pandemic, and people ages 20 to 24 continue to see double-digit unemployment rates. While vaccine rates are rising and businesses are reopening, the economy is going through many fits and starts, and the recovery is going to take time. Nearly 16 million people are still receiving benefits under all unemployment programs, which, as the Associated Press points out, is about eight times as many people as were getting benefits in August 2014, when the unemployment rate was about what it is now. Rep. Don Beyer (D-VA), chair of the US Congress Joint Economic Committee, released a report that found cutting off unemployment early could cost local economies over $12 billion, and just ending the $300 will cost would-be beneficiaries $775 million each week.

    JPMorgan’s economic research team wrote in a note in late May that opting out of UI before the timeline set by Congress appears to be “tied to politics, not economics.” They noted that indicators of economic health didn’t really coincide with unemployment-related decisions. “While some of these states have tight labor markets and strong earnings growth, many of them do not,” they wrote.

    The unemployment rate in Texas, for example, is still above the national unemployment rate. And many people looking for work there know just how hard it can be. Lynn, who lost her job as an office manager near Houston in March, has sent out over 100 résumés but so far has only gotten two callbacks.

    “There isn’t anything I haven’t tried to get a job over the last two months,” says Lynn, whose last name is being withheld to protect her privacy. “Do you think I like sitting on my tookie all day?”

    At her age — she’s 59 — she worries a lot of companies just aren’t interested. But she’s really not in a position where she can take just anything: She needs to make enough money to pay for her mortgage so she can keep her home. Her partner uses a motorized wheelchair, and they can’t easily pick up and move. She’s already strategizing how she can make extra money while she continues to look for steady work, by mowing lawns and cleaning houses. “We’re going to be so screwed,” she says. “There’s going to be a lot of sleepless nights here.”

    Karen told a similar story of anxiety over Abbott’s decision. “I’ve had nightmares for two weeks since this has been announced,” she said. Her dog is on anti-anxiety medication, and she said she’s snuck one sometimes just to sleep.

    It’s not clear what this will prove, or whether proving anything is worth it

    There’s been quite a fierce debate about what is contributing to some workers feeling hesitant to go back to work and how quick or slow the labor market recovery will be. While some business groups and economists point to unemployment insurance as the culprit, there are also plenty of other explanations — continued concerns about the pandemic, a lack of access to child care, people rethinking their career paths or holding out for better jobs. It’s difficult, if not impossible, to figure out exactly what is motivating who, and many people could be motivated by multiple factors.

    A working paper out of the Federal Reserve Bank of San Francisco estimated that the $300 weekly unemployment supplement has been making a “small but likely noticeable contribution to job-finding rates and employers’ perceptions of worker availability.” How small: They estimate that if seven of 28 workers receive job offers they would normally accept in the early months of this year, just one would say no in order to hold on to the $300.

    The question then becomes: Does the choice made by that one worker to stay unemployed a little longer really need to outweigh the lifeline that many workers desperately need?

    “If you’re saying I’m just going to shut off your benefits, but I still don’t have child care, and I still don’t have a way to ensure my child is attending their digital school, how is that going to force me into the labor market?” said Rebecca Dixon, executive director of the National Employment Law Project (NELP). “It may force me into homelessness. It may force me to be hungry. There’s an enormous amount of workers that are still behind on rent. This whole narrative is just completely wrong, and it’s incomplete.”

    She also nodded to the racial undertones of what’s happening with unemployment: Many of the states cutting off pandemic programs early are those with many Black workers, and they’re also often the states with the stingiest and hardest-to-navigate unemployment systems. “At the root of all this is this narrative that Americans have to be forced to go to work, and it is completely and totally rooted in structural racism,” Dixon said. “Because who was being forced to work in the 1800s? Black people.”

    The point of unemployment isn’t to make workers take just any job. It’s designed to give workers the time to match with a job that’s at least on par with the job they had before, which is what many of them are doing.

    Justin, who runs an electric taxi operation in downtown Austin, didn’t want or need to find another line of work during the pandemic. He took out two Paycheck Protection Program loans for small businesses and took advantage of unemployment. Now that nightlife is picking back up and people are out and about, he’s headed back to work and off of jobless benefits. For him, the system worked. “Not having a job wasn’t my issue; it was not being able to work,” he said.

    “If you’re saying I’m just going to shut off your benefits, but i still don’t have child care, and I still don’t have a way to ensure my child is attending their digital school, how is that going to force me into the labor market?”

    The hope that governors and businesses have in cutting off unemployment is that it will force people back into the workforce and make it so that they have basically no option but to accept any job, no matter the pay or benefits or hours. It’s not clear how their experiment will work: Indeed found that job search activity rose modestly — and temporarily — when states announced they were opting out early.

    Telling people they would have support through the summer and then unexpectedly taking it away doesn’t solve the problems that might be keeping them out of work; it just turns those problems into an emergency.

    Unemployment insurance needs an overhaul

    Once governors began announcing they were cutting off unemployment insurance, many people were shocked. Congress had said unemployment would go through Labor Day, and workers were caught off guard that this could even happen. After all, the programs being cut off are funded by federal money, not the states.

    “These are temporary programs, and the way that these temporary programs are administered is an agreement between the secretary of labor and the governor of the states, and that agreement gives either side — the Labor Department or the state — 30 days to terminate it,” Stettner said. “That’s what’s happening. They’re exercising this termination clause in the agreement.”

    Some experts, politicians, and advocacy groups have argued that the Labor Department should step in to try to stop states from ending benefits. NELP put out a memo laying out the case that the labor secretary has to figure out a way to keep Pandemic Unemployment Assistance (PUA), which covers self-employed people, part-time workers, and people who wouldn’t otherwise qualify for regular unemployment compensation, going. Sen. Bernie Sanders (I-VT) sent a letter to Labor Secretary Marty Walsh reiterating NELP’s case.

    Thus far, the administration insists that its hands are tied on keeping unemployment going in states that are trying to shut it off. A Labor official told Vox that they believe their authority is nil on the matter, and that because states administer unemployment insurance, it’s next to impossible to find workarounds where the federal government or other states would pay benefits. The official said they are still open to ideas.

    Some advocates and workers have expressed doubts that there’s really nothing the federal government can do, as well as frustration that many Democrats aren’t speaking out more about the matter. “I have been extremely disappointed by the silence from President Biden and from the secretary [of labor] to not sort of more publicly call out [what’s happening],” said Rachel Deutsch, who heads the Unemployed Action movement at the Center for Popular Democracy.

    The White House hasn’t exactly offered a full-throated defense of expanded unemployment.

    At a briefing on Friday, White House press secretary Jen Psaki said governors “have every right” to opt out of unemployment benefits and emphasized that no one in the administration “has ever proposed making these permanent or doing it over the long term.” She said that deciphering the extent to which expanded unemployment is keeping people out of work is “difficult to analyze.”

    Telling people they would have support through the summer and then unexpectedly taking it away doesn’t solve the problems that might be keeping them out of work; it just turns those problems into an emergency.

    Some unemployed workers are organizing to try to protest and keep their promised benefits, and advocates insist there are ways to help. But the current situation points to the broader problem of how deeply flawed America’s unemployment insurance system is. If it were more robust, we wouldn’t be here. “This is actually a microcosm of the full dysfunctionality of the unemployment insurance system as a whole,” Deutsch said.

    This has been painfully evident for a long time, and particularly acute during the pandemic. Unemployment insurance is run as a state-federal partnership that gives states a lot of leeway in how they administer the program. That has translated to low benefits in many states and impossible-to-navigate bureaucracy. Even more than a year after the pandemic hit, workers still describe spending hours on the phone and on websites trying to figure out how to apply for unemployment. Ken, a Texas teacher who is trying to figure out what to do without unemployment for the last two months before he goes back to school in the fall, said Sen. Ted Cruz’s (R-TX) office finally helped him get through to the state agency to at least collect what he’s owed before he’s cut off. “If I send a message to Ted Cruz’s office, they get me on a call list, and I get a call back,” said Ken, whose last name is being withheld to protect his privacy. (Anecdotal evidence from a Facebook group of unemployed people from Texas suggests Cruz’s office is highly effective in helping people navigate the system.)

    What happens consistently in downturns is that federal lawmakers need to step in to decide whether to help unemployed people instead of putting in some sort of automatic triggers, which would mean help is dictated by economic conditions and not political whims. Maybe some of the states cutting off benefits right now do have economies that merit it, but not all of them do.

    “We have to have standards for the benefits at all times so we don’t have to so drastically increase them,” Stettner said. “And if we’re going to have federally supported programs, we may need to have some provision in law that allows the federal government to directly pay them if the state refuses.”

    We don’t know when the next recession will come, but we know that it will. And the country and workers will be stuck in this doom loop unless there is real change or, perhaps, the entire system is overhauled.

    “Fundamentally, if we are really serious about having an income support program that is countercyclical, that actually puts money into the economy when we’re heading into a downturn and provides people with money to meet their basic needs, we actually need to create that program,” Dixon said, “because what we have now is not adequate.”

    Karen, whose husband died in 2017, is currently collecting about $418 a week in unemployment. It’s enough to pay the rent for her house and for the shared office she’ll soon be working out of yet again, but not much more. “It’s just enough to make it by,” she said, “and live in the dark.”

    Later this month, she thinks it will be cut to $0.

    _________________________________________

    Original article appeared in Vox: https://www.vox.com/platform/amp/policy-and-politics/2021/6/3/22465160/states-ending-unemployment-labor-shortage-texas

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  • Petition for Monthly Stimulus Checks Reaches 2.25 Million Signatures as Author Laments ‘Deeply Struggling’ Americans

    Public support for Universal Basic Income is growing day by day. Can we get to the point where UBI becomes a political imperative?

    By: Alexandra Hutzler

    Change.org petition calling for monthly $2,000 stimulus checks has reached 2.25 million signatures—roughly 750,000 names away from reaching its goal of 3 million.

    “Our country is still deeply struggling,” wrote Stephanie Bonin, the creator of the petition. “The recovery hasn’t reached many Americans—the true unemployment rate for low-wage workers is estimated at over 20% and many people face large debts from last year for things like utilities, rent and child care.”

    Bonin, a restaurant owner in Denver, is calling for the U.S. House of Representatives and Senate to pass legislation that will provide monthly $2,000 payments for adults and $1,000 payments for children until the coronavirus pandemic is over.

    Petition for Monthly Stimulus Checks Reaches 2.25 Million Signatures as Author Laments ‘Deeply Struggling’ Americans

    The federal government has sent out three direct payments since the start of the COVID-19 pandemic. Under former President Donald Trump, Congress approved a $1,200 check in March’s Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act and a $600 check in December of last year.

    Petition for Monthly Stimulus Checks Reaches 2.25 Million Signatures as Author Laments ‘Deeply Struggling’ Americans

    President Joe Biden, as part of his $1.9 trillion American Rescue Plan, sent out a round of $1,400 checks in March.

    “It took nine months for Congress to send a second stimulus check, and just moments to spend it,” Bonin wrote in her petition. “Moving forward Congress needs to make recurring checks automatic if certain triggers are met. No more waiting around for our government to send the help we need. Sign to join our movement to get recurring checks to the people.”

    Petition for Monthly Stimulus Checks Reaches 2.25 Million Signatures as Author Laments ‘Deeply Struggling’ Americans

    Earlier this month, the petition ranked 23rd on Change.org’s top all-time petitions list in the U.S. It also ranked 40th in the top list of petitions globally. When it reaches 3 million signatures, the site said it will become “one of the top signed on Change.org!”

    The petition for recurring $2,000 checks also made the list of Change.org’s top 10 petitions of the year 2020. It ranked seventh with 2.1 million signatures.

    Petition for Monthly Stimulus Checks Reaches 2.25 Million Signatures as Author Laments ‘Deeply Struggling’ Americans

    Bonin created the petition in March 2020 and has regularly updated it since. On May 17, which was Tax Day, Bonin wrote: “Let’s make sure that everyone has a piece of the pie…monthly checks to families ensures this.”

    Her update also called for Biden’s expanded child tax credit to be made permanent. Roughly 39 million households are expected to receive the expanded child tax credit automatically, a figure the White House said covers nearly 90 percent of the children in the country.

    The $300 monthly payments will start to be sent on July 15. Eligible households will receive the check every month through December.

    Petition for Monthly Stimulus Checks Reaches 2.25 Million Signatures as Author Laments ‘Deeply Struggling’ Americans

    “20 years ago, Community Change Action and Children’s Defense Fund- demanded an expanded Child Tax Credit. Today, they’re a reality and will cut child poverty in HALF. Now, we must extend this permanently,” the update read.

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  • Universal Basic Income could be a vaccine against poverty in Scotland

    Tory Government snubbing Universal Credit proves we should free Scotland from UK

    By: Annie Brown

    A Caribbean friend of mine taught me a new phrase this week – “a cockroach smoke your pipe.” He was using it to describe being poor in the Caribbean – in other words being royally screwed. It’s an apt description of how many people feel right now as they await the end of furlough and the spectre of economic ruin.

    When the pandemic began, scientists locked themselves away in labs in dogged pursuit of the common goal of a vaccine – and the profits it would bring.

    The Government, a Tory one no less, dug deep to stop a nation of workers falling off a financial precipice.

    Now the vaccine sees us climbing down the tiers while the financial safety net of furlough is about to be pulled from under millions of people.

    But there is an alternative, a vaccine if you like, against the threat of crippling poverty – a Universal Basic Income. It’s a simple notion, the human right to a guaranteed income, regardless of social and work insecurity. Ronnie Cowan, the SNP MP for Inverclyde, has tirelessly ­championed this cause but has admitted it is no “magic wand.” But he said: “It is not discriminatory and doesn’t stigmatise – it’s a policy that is dripping in humanity.” The benefits system as it stands is not fit for purpose and is being used as a stick to beat the most vulnerable with.

    Its implementation is punitive and callous, inefficient with delays, sanctions and heinous caps like the “rape clause”.

    This week it emerged that disabled man Maxwell Quinton, from Glenrothes, left a handwritten note begging his family to tell the Department for Work and Pensions what they are “doing to people” after having his Personal Independence Payment stopped last month.

    His crime was failing to meet the deadline to submit his bank statements to the DWP and he paid for the mistake with his life. It is the stuff of Dickensian nightmares, with a country of millionaires and billionaires grinding the poor to dust. For decades I have had a good job and a decent wage and I am thankful for it every day because I have watched the suffering money worries bring. My dad was unemployed for over a year when I was a teenager and I saw him disappear into a vacuum of stress.

    There is nothing like the fear of losing it all, everything you have laboured for and dreamed of, because of a precarious capitalist system interested only in the insatiable appetite of the rich.

    Those at the bottom are scrambling for copper pennies while the rich get richer. A couple without children on benefits is left with only £8 a day after bills in this country. Before we fall back on the trope of the feckless poor, with their fag habits and big tellies, the truth is a universal basic income (UBI) brings people back to work. There are councils in Scotland ready to launch pilot schemes for UBI ,with Glasgow City Council behind a project which guarantees £213 a month.

    Cowan is campaigning for them to be allowed to give it a try.

    For the last two years, 125 people in the US city of Stockton received monthly payments of £450 a month in just such a pilot scheme. At the start of the project, 28 per cent of the recipients were in full-time work. That rose to 40 per cent a year later.

    This is because mental health and self esteem improved and, even with such a small amount guaranteed, recipients were freed from the paralysis of poverty. The SNP, the Greens and some Lib Dems support UBI but the Tory administration wading in sleaze has no inclination to indulge the poor.

    That should tell us everything we need to know about freeing our country from the concrete boots of a Tory Government dragging us below the water line. And Cowan is right, it is about decency and humanity. It’s about Maxwell Quinton and so many like him, who would rather die than live under the cosh of the system which
    failed him.

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  • OPINION: Furlough was a radical success. Now let’s talk about a universal basic income

    Though imperfect, Covid support measures changed attitudes to those who have less money through no fault of their own

    By: Zoe Williams

    With an estimated 188,000 job vacancies in the hospitality industry, pub and restaurant owners are starting to complain about the furlough scheme – specifically, that it has made people lose the will to work. That is unlikely: furlough covered only 80% percent of wages, and given what a struggle it is to keep afloat even on 100% of a pay packet (17.4% of working households are now in relative poverty, the highest number this century), anyone on minimum wage would probably prefer work to furlough. Arguably, the million people who have left the UK since Brexit might have more to do with the labour shortage than our new collective indolence.

    Workers can always be found if the wages and conditions are right, so it’s possible that looking for the answers in the shortcomings of individual characters is a blind alley.

    It’s interesting, though, because this is the argument always used against universal basic income (UBI): the radical idea of replacing some or all means-tested benefits with a tax-free, unconditional, non-contributory flat amount given to everyone in the country (including children, though at a reduced rate and paid to parents; most modelling puts this as a similar sum to child benefit, pre-coalition government). Why would anyone work if they didn’t have to? Before we get to the counter-arguments, both behavioural and practical, pause a moment to consider just how radical furlough has been.

    From David Cameron’s environmental agenda to Boris Johnson’s “levelling up”, the Conservatives are often said to have parked their tanks on Labour’s lawn. It’s amazing how often they get away with this: saying whatever is expedient in the electoral moment, abandoning it when it suits them and, for their final trick, doing the exact opposite. What they’re actually parking is a papier-mache tank for just long enough that the grass dies and Labour forgets where its lawn ever was or how to describe it. You can’t even blame the Tories for trying it on, only the schmucks who take them seriously. As George Bush would say, fool me once …

    However, the furlough scheme was different in the sense that it actually happened. It cost real money – £61.3bn – and it made a real material difference. More consequentially, if you can call 60bn quid less than entirely consequential (hell, if Rishi Sunak can, so can I), it embedded a principle of shared responsibility: if millions are unable to work due to an emergency, there is a collective duty to support them until normality is restored.

    A parallel principle was also established: that the support isn’t “the least you can get away with”, but rather “the most you can afford”.

    The Conservatives didn’t change all their spots: sick pay was kept so low that it left people in non-furloughed work unable to self-isolate, imperilling thousands of others. Nevertheless, there is a scissor pressure here on the public debate, with “money is no object” from one direction and a reconfiguration of need from the other; those without wages are people just like us, only with less money. They are not morally compromised by dint of their hardship. This will seriously complicate the modern benefits narrative.

    As Stewart Lansley and Howard Reed, the nation’s foremost experts on UBI noted in April last year, furlough and the pandemic generally had an almost immediate impact on perceptions of the policy: 84% of the public, as well as 110 MPs and peers across seven parties, supported the idea of a “recovery basic income”, while worldwide there was a surge of interest in an “emergency basic income”.

    Spain became the first country in the world to roll out a form of basic income on a permanent basis, while Hong Kong, Japan and the US have since made significant one-off payments. Wales, meanwhile, has announced a UBI pilot scheme.

    The argument for UBI runs thus: the existing benefit system, devised in a single-breadwinner, job-for-life era, no longer meets the needs of a population increasingly dependent on zero-hours and short-term contracts. The flat amount would not be so great as to obviate work, only to forestall desperation.

    It would create an upward pressure on stagnant wages, restore bargaining power to workers, and encourage innovation, education and entrepreneurship. Various pilot studies have shown only a slight decrease in paid work – in a basic income pilot conducted in the 1970s in Manitoba, Canada,work hours only decreased among new mothers and teenagers.

    Affordability depends on some variables, such as the rate the UBI is set at, the number of benefits it would replace and what other changes were made alongside it. Certainly, if you were to undertake such a total reform of the benefits system without looking at housing costs, the impact would be muted. Conversations so granular were only had at the very fringes of the political debate before the pandemic. It was simply considered too radical to think about – too radical even for Labour’s 2017 or 2019 manifestos, though John McDonnell did talk of a UBI pilot. When you think of how their relatively mild “free broadband” pledge went down, that’s understandable.

    What furlough has done, then, even if it was by no means universal, and was, by its own design, reverse-means-tested (so the more you had before, the more you got), is take the brakes off the discussion. More important than any of the practical objections – this would stop people working, why give money to those who don’t need it, won’t it dampen the competitive spirit that drives the economy? – was the wall of impossibilism. That defence has now been breached, and the debate can begin in earnest.

    ______________________________________________

    Original article appeared in The Guardian: https://amp.theguardian.com/commentisfree/2021/jun/01/furlough-universal-basic-income-covid

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  • Eliminating extra unemployment benefits won’t solve worker shortages, study finds

    Despite political rhetoric, extra pandemic-era unemployment benefits largely don’t keep workers from accepting new jobs, according to a new paper by the Federal Reserve Bank of San Francisco.

    By: Denitsa Tsekova

    As nearly half of states opt out of the extra weekly unemployment benefits to combat worker shortages and spur hiring, new research shows those efforts may be futile.

    The extra pandemic-era unemployment benefits largely don’t keep workers from accepting new jobs, according to a new paper by the Federal Reserve Bank of San Francisco, because the total amount in benefits — while higher than usual — is not enough to offset other long-term advantages of being employed.

    If seven out of 28 unemployed workers received job offers they would normally accept, only one declined because of the extra $300 of weekly unemployment benefits, the paper found.

    “Jobs are very long lasting and unemployment payments are fixed in duration,” Nicolas Petrosky-Nadeau, author of the study and vice president of macroeconomic research at the Federal Reserve Bank of San Francisco, told Yahoo Money.

    “You’re [not only] turning down a typical job [worth] two years of income versus 17 weeks of additional income, but you’re also turning down the many additional valuable benefits of being employed.”

    ‘Not likely to have an incentive effect to accept jobs’

    The findings varied by state because each state offers different levels of jobless benefits. For instance, workers in Alabama, Georgia, Mississippi, Florida, and Tennessee — five of the 24 states canceling the federal programs in June — were the least likely to turn down a job because of the supplemental benefit, the study found.

    “These are states in which cutting the supplemental income — because it had no disincentive effect to begin with — is not likely to have an incentive effect to accept jobs at a higher pace,” Petrosky-Nadeau said.

    In states like North Dakota, Idaho, and Montana — which are also opting out of the federal programs — workers were the most likely to reject a job because of unemployment benefits compared with other states. Even then, the level of unemployment benefits in those states was still unlikely to discourage workers from employment, the study found.

    ‘Bigger factors are health and safety concerns… child care concerns’

    The analysis looked at the effect on job acceptance under the CARES Act, which provided $600 in weekly unemployment benefits through July of last year.

    In all states, the extra benefits weren’t enough to meaningfully alter whether a worker would accept a job or not. 

    Workers are even less likely to have their job acceptance decisions affected by the current $300 weekly unemployment supplement, according to Petrosky-Nadeau.

    Accepting a job allows workers to move to the next position and maintain a professional network through their job, creating additional value to take a position rather than stay on unemployment.

    “[For] the majority of people, the bigger factors are health and safety concerns… child care concerns,” Robert Valletta, author of the study and vice president at the Federal Reserve Bank of San Francisco, told Yahoo Money.

    “Those kinds of considerations appear to be much more important for people’s decisions about whether they should return to work.”

    ‘Making these unemployment benefits no longer necessary’

    Starting in mid- or late-June, jobless workers in 24 states will lose the extra $300 in weekly unemployment benefits, while contractors, gig workers, and others will lose access to the Pandemic Unemployment Assistance (PUA) program in 22 of those states, meaning they won’t get any benefits at all.

    Workers in those states stand to collectively lose $23.7 billion, averaging out to potentially thousands of dollars per worker, according to an analysis by the Century Foundation.

    The move to cancel federal programs gained steam among Republican governors following April’s disappointing jobs report, with Nebraska and Florida becoming the latest states to exit the $300 weekly bonus program.

    “Transitioning away from this benefit will help meet the demands of small and large businesses who are ready to hire and expand their workforce,” Dane Eagle, secretary of the Florida Department of Economic Opportunity, said in a press release on Monday announcing the move.

    The post Eliminating extra unemployment benefits won’t solve worker shortages, study finds appeared first on Basic Income Today.

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  • Opinion: With Universal Basic Income, people can lead more meaningful lives

    As a result of the the Pandemic, people are taking a hard look at the type of jobs they take and people are rejecting working at terrible jobs

    By: STUART SCHUFFMAN

    Remember before the pandemic when that one-term loser of a president used to brag about how stellar job growth was in the United States? That used to make me so cranky because, the part that was always left out of the conversation was what exactly those jobs were. Just because something is a “job” doesn’t mean it’s a good job. It kinda reminds me of sandwiches.

    If I put a turd between two slices of bread, technically it’s a sandwich. But what it really is, is a shit sandwich. If you’re hungry enough, and you don’t have any other choices, you’re gonna eat that shit sandwich, but I think all of us can agree that nobody should have to do that.

    Same goes for jobs.

    Yes, there was a bunch of job growth before the pandemic, but much of that growth was gig economy jobs: Jobs without health insurance, 401k, paid time off, sick leave, maternity/paternity leave. …. basically shitty jobs.

    Now I’m not denigrating the workers or the work they were doing. All work and all workers deserve respect and fair treatment, but that’s exactly my point.

    What makes these jobs shitty is that the people working them are viewed as disposable and undeserving by the companies that make money off their labor. In short, they are being exploited.

    And companies like Uber, Lyft DoorDash, TaskRabbit, etc. know this too. When they say things like “Our business model can’t support treating everyone like employees,” they are literally admitting that theirs is an exploitative business model.

    This is even further demonstrated by the way these companies flourished during the pandemic. People literally put their lives on the line to work for companies who were making record profits, yet still refused to give them extra hazard pay.

    Then there’s the hospitality industry. We’re lucky in California that people get a full minimum wage while also making tips, but 42 states and territories have a tipped wage where people who earn tips have a lower minimum wage than traditional employees. In 16, that minimum wage is $2.13 an hour without any guarantee of any other acutal income.

    On top of that, most service industry jobs in the U.S. don’t come with health insurance, paid time off, sick leave, etc, meaning they too are shitty jobs.

    Couple all that with the fact that, according to the National Low Income Housing Coalition, “Full-time minimum wage workers cannot afford a two-bedroom rental anywhere in the U.S. and cannot afford a one-bedroom rental in 95% of U.S. counties.”

    So, is it any wonder why we keep hearing “Nobody wants to work” from idiot pundits? We’re currently living through the biggest Universal Basic Income experiment in history, and it’s wildly successful! People are using the stimulus checks and unemployment money to get themselves out of the cycle of working shitty jobs. Some are using it as an opportunity to go back to school and get a degree. Others are using it to stay home with their kids instead of having to scramble to find child care. Still others are seizing this moment to create new businesses doing the things they are passionate about instead of working to fulfill someone else’s dream. And yet people are mad because the workers they told to “get a better job if they weren’t happy” decided to do so?

    Look, nobody ever wanted to work. People want to lead meaningful and fulfilling lives that bring them joy. Nobody ever said, “I want to spend my life making $2.13 an hour while serving jumbo Dr. Peppers with extra ice to people who look down on me because I only make $2.13 an hour serving them jumbo Dr. Peppers with extra ice.”

    Our entire system has been built to keep people in positions where their only option is to work these jobs.

    So instead of listening to millionaires on TV talk about how nobody wants to work, you should be celebrating the fact that regular working people are finally catching a break.

    While this isn’t technically Universal Basic Income since not everyone is getting it, it’s a damn good start. Hopefully, if enough people take this opportunity to make a new reality for themselves the people in charge of these jobs will finally be forced to give workers what they deserve: dignity, respect, and no more shit sandwiches.

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  • Why Cash Is Better Than Expanded Health Insurance for the Poor

    Cash transfers go directly to people in need, while health insurance expansions pay mainly for care that the uninsured already receive, an economist says.

    By: Amy Finkelstein

    The Biden administration is moving in a new direction. It is trying to help low-income Americans by pushing for direct cash assistance in addition to expanding health insurance.

    Each is a laudable goal. But doing both at once may not be feasible, as lawmakers raise concerns about the total price tag of Biden’s plans.

    If the administration has to make hard choices, it can do more to help the poor by prioritizing cash transfers over expanded health insurance. That’s because cash helps recipients directly, while health insurance would pay mainly for care that many uninsured people were already receiving at low or no cost.

    For over a decade, health insurance expansions have dominated the budget and politics of legislation directed toward the poor. In 2019, the government spent more than $600 billion on Medicaid — the major health insurance program for low-income Americans. This was more than 10 times the amount spent on the largest cash transfer program, the earned-income tax credit.

    By contrast, the $1.9 trillion rescue legislation enacted in March brought a welcome shift in focus toward cash benefits. Among its temporary provisions were about $100 billion in increased payments to low-income families with children and $15 billion in stepped-up wage subsidies for low-income workers, overshadowing the approximately $35 billion in new spending for health insurance.

    The evidence indicates that for the low-income recipients of these programs, cash transfers will provide a greater bang for the government’s buck. Two separate studies that my collaborators and I conducted found that, on average, low-income adults would benefit more from a dollar in cash than a dollar of government spending on health insurance.

    These kinds of comparisons are inherently difficult. One approach we took to measuring the value of health insurance to recipients was to see how much they were willing to pay for it. Another was to estimate the effects of such insurance on their lives, like improved health and increased economic security. Neither approach is airtight.

    But they gave very similar answers: The benefit of Medicaid coverage received by a newly insured adult is less than half what that coverage costs taxpayers, which is about $5,500 a year.

    The reason is simple: The uninsured already receive a substantial amount of health care, but pay for only a very small portion of it, especially when their medical bills are high.

    We have estimated that 60 percent of government spending to expand Medicaid to new recipients ends up paying for care that the nominally uninsured already receive, courtesy of taxpayer dollars and hospital resources. In other words, from the recipient’s perspective the alternatives are $5,500 in cash or only about 40 percent of that — $2,200 — in health insurance benefits, on top of the care they were already receiving.

    The United States has a longstanding tradition of providing free medical services to the indigent. Hospitals emerged in the 18th century largely to care for those with no other sources of help. In modern times, federal and state governments have enacted a grab bag of policies to help defray some of the costs incurred by hospitals and clinics in providing humanitarian care.

    The result is today’s health care safety net for the uninsured. It is grossly inadequate and inefficient. It needs a radical overhaul.

    But in the meantime, the direct benefits from expanding insurance to the low-income uninsured are, paradoxically, limited by the imperfect patches currently in place. Hospitals are major beneficiaries of health insurance expansions, which reduce their financial burdens and increase their profit margins.

    Health insurance has always been an important financial tool for hospitals. During the Great Depression, they pioneered the first widespread health insurance in the United States to help ensure payment for provided care.

    More recently, in 2006, when Senator Mitt Romney was the Republican governor of Massachusetts, he embraced the state’s health insurance expansion — which became the blueprint for Obamacare — as a way to reduce the costs that uninsured patients imposed on hospitals and taxpayers. Hospitals later used similar logic in lobbying for Medicaid expansions under Obamacare and against their repeal.

    Of course, the newly insured have also benefited greatly from health insurance expansions. On this point, the evidence from Obamacare is in, and the research results are clear: Medicaid coverage is better than the safety-net care available to the uninsured.

    Studies have shown that the health insurance expansions under Obamacare saved lives. They also increased access to medical care and reduced medical debt, which can impose substantial financial and emotional pain on patients and their families, even though most of it is never repaid. Covering some of the remaining 30 million Americans who are still uninsured would most likely produce similar benefits.

    But people in need also benefit greatly from cash. And there is evidence that cash transfers can also save lives.

    In addition, a large body of work shows that wage subsidies to low-income workers with children help lift their families out of poverty, increase economic self-sufficiency, and improve their health and well-being.

    A recent experiment found that wage subsidies very similar to the ones that were temporarily expanded in March also increase employment and earnings for low-income adults without dependent children. Likewise, direct cash transfers provide important benefits to families and their children, whose academic achievement and physical and mental health can improve as a result.

    In an ideal world, everyone would have health insurance and sufficient income. But in the real world, budgetary and political constraints often force wrenching trade-offs.

    There are powerful moral imperatives for making sure that everyone has adequate medical care, as well as sufficient income for their nonmedical needs. It’s hard for economists to weigh competing moral imperatives.

    But we can, at least, stack dollars on scales. And the good done by cash transfers tips the scale in their favor.

    The Biden administration is now trying to make permanent its temporary expansions of both cash subsidies and health insurance. If forced to prioritize how best to help those who are struggling economically — either because of the coronavirus pandemic or from longer-term, structural obstacles — it’s time to recognize that cash is more effective than insurance.

    __________________________________________

    Article originally appeared in New York Times: https://www.nytimes.com/2021/05/13/business/health-insurance-cash-Biden.html

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  • South Africa Moving Forward in Introducing Basic Income

    Government planning new basic income grant for South Africans aged 19 to 59

    Social Development minister Lindiwe Zulu says that her department will move forward on plans to introduce a new basic income grant in South Africa.

    Presenting her departmental budget speech on Tuesday (25 May), Zulu said that the need to introduce a basic income grant has become an urgent consideration for the African National Congress-led government.

    “To this end, the Department has developed a Basic Income Grant (BIG) discussion document that we have started to consultations on,” she said. “These consultations are targeted at developing the BIG financing mechanism for the unemployed population group that is aged 19 — 59 years.”

    Zulu said that a secondary process around a new BIG is being discussed by the National Economic Development and Labour Council (Nedlac). The pandemic prompted president Cyril Ramaphosa to announce a temporary top-up of existing grants by up to R300, including a R350 unemployment grant in late March 2020.

    The ANC has previously said that it will also look at the feasibility of introducing a basic income grant as part of a series of outcomes decided upon by its National Executive Committee (NEC).

    According to a June 2020 document seen by Bloomberg, the ANC has proposed paying a R500 monthly grant to those aged 19 to 59 who aren’t normally eligible for other aid. This would cost the state R197.8 billion a year.

    Between 50% and 60% of the money could be recouped by levying extra taxes on those with jobs, it said.

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