A recent paper published in Nature looked at the effects of cash transfers in a number of pilot programs around the globe. The researchers reported (in typical academic-ese):
We evaluated the effects of large-scale, government-led cash transfer programmes on all-cause adult and child mortality using individual-level longitudinal mortality datasets from many low- and middle-income countries. We found that cash transfer programmes were associated with significant reductions in mortality among children under five years of age and women. Secondary heterogeneity analyses suggested similar effects for conditional and unconditional programmes, and larger effects for programmes that covered a larger share of the population and provided larger transfer amounts,…Our findings support the use of anti-poverty programmes such as cash transfers, which many countries have introduced or expanded during the COVID-19 pandemic, to improve population health.
This research focused on health; other studies have shown dramatic improvements in a variety of social outcomes.
I’ve long obsessed about what an updated social contract might look like, and whether it’s possible to craft a governing structure that both respects individual liberty and provides basic material security. My periodic musings revolve around two issues: whether anyone is truly free who struggles daily just to survive, and whether government safety-net policies can help unify an increasingly fragmented population.
The Greeks were right about that “golden mean” between extremes. The importance of hard work and individual talent shouldn’t be minimized, but neither should it be exaggerated. When the focus is entirely upon the individual, when successes are attributed solely to individual effort, we fail to recognize the social and legal structures that privilege some groups and impede others.
When we ignore systemic barriers, we feed stereotypes and harden tribal affiliations. That’s why the first priority of a social contract should be to nurture what scholars call “social solidarity,” the ability of diverse citizens to see ourselves as part of an over-arching, inclusive American community.
A workable social contract connects citizens to a larger community in which they have equal membership and from which they receive equal support. The challenge is to achieve a healthy balance—to create a society that genuinely respects individual liberty within a renewed emphasis on the common good, a society that both rewards individual effort and talent, and nurtures the equal expression of those talents irrespective of tribal identity.
As I have frequently argued, policies can either increase or reduce polarization. Policies intended to help less fortunate citizens can be delivered in ways that stoke resentments, or in ways that encourage national cohesion. Think about widespread public attitudes about welfare programs aimed at poor people, and contrast those attitudes with the overwhelming approval of and support for Social Security and Medicare.
Significant numbers of Americans stubbornly believe laziness and lack of motivation are major causes of poverty, and that social welfare breeds dependence, despite ample evidence to the contrary. Social Security and Medicare are viewed differently. They’re universal programs; virtually everyone contributes to them and everyone who lives long enough benefits from them. Such programs avoid stigma.
That universal policies unify is an important and often overlooked argument favoring a Universal Basic Income. But pilot programs continue to highlight numerous other positive consequences.
America currently has a patchwork of state and federal programs, with bureaucratic barriers and means testing that operate to exclude most of the working poor. Welfare recipients are routinely stigmatized by moralizing lawmakers pursuing punitive measures aimed at imagined “Welfare Queens.” Meanwhile, current anti-poverty policies haven’t made an appreciable impact on poverty.
A Universal Basic Income is a cash grant sufficient to insure basic sustenance–and unlike welfare, a UBI has no phase-out, no marriage penalties, no people falsifying information.
Support for the concept isn’t limited to progressives. Milton Friedman proposed a “negative income tax,” and F.A. Hayek wrote “There is no reason why in a free society government should not assure to all, protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need descend.”
In 2016, Samuel Hammond of the libertarian Niskanen Center, described the “ideal” features of a UBI: its unconditional structure avoids creating poverty traps; it sets a minimum income floor, which raises worker bargaining power without wage or price controls; it decouples benefits from a particular workplace or jurisdiction; since it’s cash, it respects a diversity of needs and values; and it simplifies and streamlines bureaucracy, eliminating rent seeking and other sources of inefficiency.
Hammond’s point about worker bargaining power is especially important in today’s work world, with dramatically-diminished unions and the growing “gig economy.” With a UBI (and single payer health coverage), workers would have freedom to leave abusive employers, unsafe work conditions, and uncompetitive pay scales.
A UBI wouldn’t level the playing field, but it sure would reduce the tilt.
A UBI would also have much the same positive effect on economic growth as a higher minimum wage. When poor people get money, they spend it, increasing demand—and increased demand is what fuels job creation. (If nobody is buying your widgets, you aren’t hiring people to produce more of them.)
Counter-intuitive as it may seem, a significant body of research supports the
importance of a robust social safety net to market economies. As Will Wilkinson of the Niskanen Center has written, the Left fails to appreciate the important role of markets in producing abundance, and the Right refuses to acknowledge the indispensable role safety nets play in buffering the socially destructive consequences of insecurity.
I have previously written about the salutary effects of a UBI--effects the linked article (and several other studies) have confirmed. I have also suggested budgetary adjustments that could pay for it.
Of course, it won’t happen.
As we’ve seen in other policy domains, notably health care, American policymakers don’t care about evidence, no matter how persuasive. (Don’t confuse them with the facts!)
Maybe in my grandchildren’s lifetimes……