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WHISNANT: Make it rain

A universal basic income should be the next front of the war on poverty

In his 1964 “Great Society” speech delivered in Ann Arbor, Lyndon B. Johnson launched a series of initiatives that would come to define American politics for the next half-century. Programs such as Medicare, Medicaid, food stamps and Head Start dramatically improved the standard of living for millions of Americans. Between 1967 and 2012, the Supplemental Poverty Measure—a method of evaluating poverty that takes into account government programs that assist low-income families not included in the official poverty measure—fell from 26 percent to 16 percent. The Census Bureau estimates that antipoverty programs kept 41 million people, among them 9 million children, out of poverty in 2012 and that the poverty rate would be double what it is without the safety net.

Despite these achievements, the War on Poverty hasn’t been an unqualified success. In response to a conservative backlash, Ronald Reagan and Bill Clinton pared back much of the welfare state Lyndon Johnson helped build, and today around 47 million Americans live below the poverty line. In order to eliminate most of the poverty in this country, policymakers must adopt a new strategy that takes our complicated patchwork of programs and transforms them into a more coordinated and comprehensive approach.

The cornerstone of any new approach ought to be a universal basic income (UBI). The UBI has been endorsed by everyone from Martin Luther King Jr. to conservative luminaries like Milton Friedman and F. A. Hayek, would have the effect of both radically redefining citizenship and dispensing with some of the worst elements of public sector bureaucracy. With the government sending a check for a poverty-level income to every adult American, the incentive structures of safety net programs that sometimes punish job-seekers would be eliminated. The poor would no longer have to weigh whether or not signing up for a job is worth it because of the loss of crucial benefits; the UBI stipend would remain the same regardless.

As a consequence, the labor market would be redefined to become truly voluntary. People would no longer be forced into undesirable jobs because of dire financial straits. With this new shift of bargaining power to workers, corporations would have to make those jobs more attractive by offering higher benefits and wages that better reflect social value produced by those jobs. It’s easy to imagine the salaries of sanitation workers, for instance, going up dramatically to attract workers to the positions.

Such a system would also empower working-class women. Childcare workers and housekeepers today, whose occupations have traditionally been seen as “women’s work,” are some of the lowest-paid and most vulnerable participants in the labor market. A universal basic income would send the message that society values their work and would provide them with negotiating power they previously lacked. As such, poor minority women, especially single mothers, would perhaps be the biggest winners of a UBI, and the gender wage gap would collapse.

Framed another way, the UBI can be seen as a small-government conservative reform. The current system of means-tested welfare programs is wasteful, uncoordinated, duplicative and too often distorts market incentives. Upon enacting a universal basic income, we would see food stamps, WIC, heating assistance, cash welfare, public housing vouchers, unemployment benefits and numerous other smaller programs written out of existence, with their purposes being superseded by one simple yearly payment. A post-UBI federal government would be streamlined, more efficient and much easier to manage and monitor. The government could still provide health insurance through Medicare and pensions and disability benefits through Social Security, but other means-tested programs would be eliminated along with the perverse incentives that keep too many people in poverty.

Beyond making employers offer more worthwhile work, protecting working poor women, slashing poverty rates and streamlining the federal government, a universal income would remake our society by dramatically changing attitudes toward certain types of work and certain groups of people. It would increase social solidarity by making the poor harder to demonize for getting a benefit the middle class doesn’t, because everyone from hedge fund managers to the homeless would receive the same amount. It would encourage creative work by spurring people to quit their dead-end jobs and pursue the musical or writing career they’ve always dreamed of. It would eliminate the worry about the negative side effects of automatization by allowing businesses to pursue technological efficiency without their employees’ livelihoods being jeopardized. As such, the UBI is perhaps the only welfare reform that is capable of producing results that the left, right and center would appreciate.

There’s no doubt that guaranteeing every American a basic standard of living would have a price tag. Though proposals that have ranged from setting the amount anywhere between $10,000 and $35,000 per household, there are several funding sources that could be adjusted accordingly to pay for the plan. The federal government spends about $212 billion on social welfare annually, and that money would largely disappear with the arrival of the UBI. Cuts in the $729 billion military budget could also redirect revenue away from defense contractors and to all Americans. Beyond that, new revenue would certainly be needed, such as through a financial speculation and/or a value added tax, but the sum required isn’t impossible to reach.

In 1969, no less a radical leftist as Richard Nixon proposed a guaranteed income of $10,160 in today’s dollars with his Family Assistance Plan as a conservative spin on the War on Poverty. Though the Republican Party and the country have changed a great deal since 1969, a universal basic income should become the end goal for antipoverty efforts on all sides of the political spectrum. As Lyndon Johnson said of the War on Poverty, “The richest nation on Earth can afford to win it. We can not afford to lose it.”

Gray Whisnant is an Opinion columnist for The Cavalier Daily. His columns run Wednesdays.


Published January 15, 2014 in Opinion

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