by Karl Widerquist | Nov 15, 2017 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in December 2001.
As I was putting this newsletter together, the National Bureau of Economic Research officially announced that the U.S. economy has been in recession since last March. The delay in the diagnosis is nothing unusual because a downturn is not considered a recession unless it lasts for a significant period of time. But the point at which a recession is recognized is a good moment for reflection on the performance of the economy. Even though the United States is in a recession right now, the long-term performance of the economy as a whole over the last 20 years has been quite good. The expansion that ended in March lasted for exactly 10-years—the longest in U.S. history—and it came after a short and mild recession in the early 1990s, which followed a long, stable expansion during the 1980s. The last 20 years have had the most stable growth in U.S. economic history. The growth was not particularly rapid, but there is a lot to be said for stability. The economy may decline by a few percentage points over the course of the recession, but an economy that grows by 2 or 3 per year during economic expansions can weather the occasional downturn. Thus, although there are worrying signs on the horizon (such as a persistent trade deficit and a high and growing level of indebtedness), the verdict on the performance of the U.S. economy as a whole over the last 20 years has to be largely positive.
Good performance of the economy as a whole does not necessarily mean that it has performed well for all individuals. If one judges the success of an economy by the well being of its less advantaged individuals the performance of the U.S. economy has been terrible over the last 20 years. Real wages at the low-end of the wage spectrum have stagnated or even declined slightly. Usually, poverty declines slowly during expansions and increases quickly in recessions, but there has been no lasting progress in reducing poverty since the early 1970s. The official poverty rate has been stuck in a range between 11% and 15% since the early 1970s. There was an extremely rapid decline in poverty in the 1940s and again in the 1960s, but it has not been repeated since. The ’40s, ’50s, and ’60s were marred by frequent recessions, but individuals across the economic spectrum were able to count on gains during the expansions that would more than make up for losses during recessions. The ’70s were a period of instability in which the less advantaged lost ground, and since then there has been no return to the progress experienced earlier.
Why were the experiences of the less advantaged so different during the good economic times of the ’80s and ’90s than they were in the ’40s, ’50s, and ’60s? The difference is largely one of government policy. The earlier period saw the GI Bill, the fruition of Social Security, the expansion of AFDC and Medicare, increases in the minimum wage and the creation of Food Stamps and Medicaid. Since the early 1970s, many of these programs have been canceled or allowed to lapse or have been effectively cut by not being adjusted for inflation. These programs were not the best possible programs for fighting poverty, but they were all we had, and rather than being reformed, they’ve largely been cut with little or nothing to replace them aside from TANF, which seems to make welfare so unpleasant that jobs without living wages are preferable. TANF has been declared a success simply because it has reduced the number of families on welfare. The success of TANF should be measured instead by whether it reduces poverty and whether it makes children healthier and happier and whether it helps them grow into better-adjusted adults. Should it be any surprise cutting nearly every program designed to aid the poor should slow or stop the progress we had been making toward the reduction of poverty? Something else is needed if poverty reduction is our goal.
During recessions, people often voice opposition to direct anti-poverty policies, arguing that the best way to help people is to get the economy moving again. During expansions, the argument is usually to keep it moving or to get it moving faster. They say, “a rising tide lifts all boats,” and everyone benefits from economic growth. But the lesson to learn from the last twenty years of economic expansion is that these arguments are simply false. The incomes of low-wage workers stagnated during the good economic times of the ’80s and ’90s because policy turned against the redistribution of income, but they increased during the good economic times of ’40s, ’50s, and ’60s because policy favored increased redistribution of income. There is no inherent mechanism in a capitalist economy to ensure that everyone will share in the fruits of economic growth. I believe that a basic income guarantee is essential to ensure that everyone shares in our economic success. This and other strategies for better distributional equity will be discussed at the First Congress of the U.S. Basic Income Guarantee Network. I invite you to join us.
Karl Widerquist, New York, NY, December 2001.
by Faun Rice | Nov 15, 2017 | News
Dolly Parton, 2011. Credit to: Eva Rinaldi Photography
Approximately 1,300 homes were destroyed by wildfires in Gatlinburg, Tennessee in November of 2016. Singer and actress Dolly Parton, who comes from the same county, created a fund through the Dollywood Foundation to help families uprooted by the fires. The My People Fund provided $1,000 USD per month to each family who lost a home, beginning in December 2016 and ending in May 2017 with a final payment of $5,000. Approximately 900 families were found eligible for this program.
Stacia West, Assistant Professor of Social Work at the University of Tennessee, made a link between the My People Fund and basic income in a recent interview. West worked with the Dollywood Foundation to develop an evaluation of the My People Fund, using a survey that assessed family finances, housing, wellbeing, and sources of support. The first survey was answered by approximately 100 voluntary participants in April 2017, and preliminary findings are available. The same questionnaire will be distributed in December 2017. This approach is intended to help the team assess whether or not the My People Fund had a positive impact on recipients’ lives, and if so, to what extent.
In an email communication with Basic Income News, Dr. West commented on the link between the My People Fund and basic income:
“Though intended solely as financial support for survivors of the wildfires, the My People Fund cash transfers mirror some components of basic income, particularly that the transfers were provided without a means test and for a somewhat extended duration of 6 months. Final results of the longitudinal evaluation will be available in early 2018, and I look forward to learning how the transfers impacted financial, social, and health outcomes for the sample.”
Credit to: UT Knoxville
The preliminary findings of the My People Fund Evaluation state that on average, respondents experienced an increase in housing costs (mortgage or rent) following the wildfires. For example, partnered or married households shifted from spending 38% of their income on housing before the fires, to 64% after relocation. Most respondents reported having to take time away from work, and 74% of respondents had fire-related expenses not covered by insurance. Some experienced depression, anxiety, or a loss of self-efficacy following the fires. In addition, 62% of respondents noted that cash donations were the most useful form of support following the fire.
Download the full report here.
More information at:
Steve Ahillen, “Dolly Parton’s ‘My People’ money paid off for those who lost homes in fires, study shows,” USA Today Network-Tennessee. November 16th 2017.
“UT Releases Preliminary Findings of ‘My People Fund’ Evaluation,” Tennessee Today, November 16th 2017.
Stacia West, “My People Fund Evaluation: Preliminary Findings,” The University of Tennessee Knoxville College of Social Work, October 1st 2017.
by Cordelia Holst | Nov 6, 2017 | News
On Thursday, October 19th, activists, social justice advocates, economists, futurists, venture capitalists, writers, community organizers and politicians gathered at the Old Mint in San Francisco – a symbolically poetic building – to talk about Cash. Organized by the Economic Security Project, the goal of the conference was to “reimagine what an economy built on the well-being of everyone could look like.”
Cara Rose DeFabio and Sandhya Anantharaman were the MC’s for the day, introducing each segment, panel or presentation, showcasing a range of thoughts around how cash transfers can shape society. See the full schedule here.
The conference embraced a range of reasons why giving cash through a Universal Basic Income is an appealing concept. Most segments were in a panel format with experts in their field, moderated by one of their own. This allowed participants to see the differences in thinking across the movement as well as its broad appeal, regardless of what brought these thinkers into to the movement. The first panel was a discussion on automation’s effect on the work force, and how UBI could provide economic security during retraining, between jobs, or to supplement part time work. Another panel, with representatives from three different venture funds, discussed how a UBI might encourage entrepreneurship, while a third panel talked through historical and current systemic racist and sexist policies and practices, and how a combination of a UBI plus a wealth tax to help fund it could course correct extreme inequality.
A general acceptance for the benefit of cash transfers seemed to be the most basic common denominator. The audience was educated on the results of past cash transfer and basic income experiments, as well as updates on current experiments. You can view a high level video of some of the outcomes of these experiments here.
Mayor Tubbs of Stockton talked about his plans for a UBI in his city. Elizabeth Rhodes also gave an update on the Oakland Y-Combinator project. Then Joe Huston, CFO of Give Directly spoke to the effectiveness of cash transfers and positive outcomes in their work in Kenya and Uganda. He announced that Give Directly is now involved in its first US based project, where they are giving debit cards with $1500 directly to victims of Hurricane Harvey in the Houston area. He noted the work that still must be done changing perceptions around what people will do when they are given cash unconditionally, joking that employers don’t say, “I would like to give this employee their bonus, but I’m worried they might drink it away,” yet this is somehow common thinking that needs to be changed based on research results.
Aisha Nyandoro, CEO of Springboard to Opportunity spoke about where the current Welfare system in the US fails. She illustrated the challenges that families living in poverty in Mississippi have piecing together welfare benefits from the government – housing voucher, electricity voucher, and food stamps. The system creates poverty traps and the benefits don’t cover many of the real needs these families have, but cash would. Cash would also limit interaction with the system and remove the feeling of being judged, as well as the stigmas around welfare.
Damareo Cooper, Director of the Ohio Organizing Collaborative shared his personal story also highlighting how the current welfare system and prison system fails children and young people, making a convincing case for switching to cash. Almaz Zelleke, professor of Political Science at NYU Shanghai, went further, explaining why a UBI must be paid as cash and not a negative income tax.
Throughout the day, however, there seemed to be a lack of consensus on aspects surrounding universality and unconditionality of a cash transfer policy. The range of standpoints could be seen clearly in a panel with Hawaii State Representative Chris Lee and Alaska State Senator Bill Wielechowski, as well as Joseph Sanberg, the founder of Golden State Opportunity Foundation. Bill educated the audience on the Alaska permanent fund. On the aspect of Universality and Unconditionality he said, “Universality is critical. If the policy was needs-based it would diminish it. The fund is framed as each resident’s ownership of shared resources. This is something that Alaskans share together.”
On the other side of the issue, Joseph Sanberg said, “The social contract is work and you will be able to have economic security.” He tied work requirements to the right to economic security and his efforts have been focused on California Earned Income Tax Credits.
Chris Lee from Hawaii seemed to be working out his state’s position on the issue, noting that for their Earned Income Tax Credits they have expanded the definition of work, looking at where people are spending their hours – for example, caregiving. He did note that his task force is looking at a universal benefit across all economic classes.
Aisha Nyandoro cited the work she does as evidence that work requirements are difficult and policy makers are out of touch on the issue. She invited any policy makers that wanted to get in touch to call her. Anne Price, President of Insight Center for Community Economic Development, explained how racism and sexism shaped current welfare policy around judging who is deserving and who is undeserving. She noted that it is degrading to be on the receiving end of morality, and shared her vision for dignity for all: universal benefits – working or not.
How to pay for it was touched on by some, with ideas ranging from a wealth tax to combat inequality, to a shared patrimony dividends, like Alaska, or some combination of these revenues.
Other highlights of the day included a session by Jane McGonigal from the Institute for the future, and A Frank Conversation about Money with Chris Hughes, co-founder of Facebook and Co-Chair of the hosting Economic Security Project. Jane coached the audience on how to create empathy for our future selves and envision a future with Universal Basic Income. Anna Sale from “Death, Sex, and Money” interviewed Chris Hughes about his thoughts and feelings around his own fortune and why he supports Universal Basic Income.
The organizing team is clearly very competent and professional, as the entire conference ran very smoothly from check in, AV, lunch, and seating. All details were thought out and executed well. Participants had many opportunities to make connections and discuss the themes.
All in all, this was a very important gathering for the movement.
by Dawn Howard | Nov 2, 2017 | News
The 3rd episode of the “In All Seriousness” podcast presented a casual but poignant round table discussion on UBI with Zeitgeist Movement founder Peter Joseph, Rob Dew, and Michael Jordet. Special guests included Larry Cohen, founder of The Economic Security Project and Build the Floor, as well as Scott Santens, an activist and columnist who has been a recipient of a crowd-funded monthly basic income since January 2016.
The group covered a wide range of topics, including the history of basic income as a concept, the ubiquity of automation and its destabilizing effects on the economy, the Left’s rejection of Nixon’s 1969 Family Assistance Plan, the nature of work and what it means to live a meaningful life, the popularity of the Alaska dividend, the effects of poverty on the cognitive development of children, stress and its relationship to political apathy, the role of “The State” in social progress, the blockchain as a game-changing technology, the notion of “the three pillars” (universal healthcare, universal education, basic income) and the “adjacent possible”, the disproportionate benefits of UBI on women and minorities, open-source resource and food management, and the greatest obstacles to the implementation of UBI present today.
You can read more at https://www.reddit.com/r/BasicIncome/ or engage with members of the panel on Twitter:
@tzmglobal @scottsantens @larrycohen
by Tyler Prochazka | Oct 30, 2017 | News
In a sign of the major progress Universal Basic Income (UBI) has made in Asia, the United Nations Development Program in Beijing hosted a roundtable discussion on basic income last week. Professors from China’s most influential universities spoke at the roundtable about the potential for a basic income pilot program in China.
Patrick Haverman is the UNDP Deputy Country Director for China. Haverman said he wants to work with academia and government to determine if basic income experiments in different areas of China are feasible.
“With the Sustainable Development Goals firmly focused on the need to ‘leave no one behind’, careful consideration of a wide variety of responses will be essential,” Haverman said during his opening remarks. ”It is very important that we can foster collaborative discussions around potential options to address poverty and inequality into the future, and the role of UBI should not be overlooked.”
The roundtable also discussed the benefits and likely challenges of implementing a Universal Basic Income in China. A large topic was how UBI could improve on the dibao system, which is China’s means-tested unconditional cash transfer program. Dibao currently has issues with targeting the subsidies toward people in poverty, which many participants at the roundtable noted UBI’s universality could potentially alleviate.
Shi Li, a professor at Beijing Normal University, said Chinese people in poverty receive the dibao because of poor targeting. In his research, Li and other researchers found that nearly 88 percent of poor residents in China do not receive dibao stipends. Remarkably, administrative costs of means-testing were three times more than the actual transferred amount.
The large size and economic disparities across the mainland mean it may be difficult to implement a national UBI that is not adjusted based on residence, others noted.
The event was co-hosted by the International Labour Organization, which presented on the potential disruption of automation on employment during the roundtable. Haverman said an advantage in China is that smartphone penetration is high and many businesses now accept digital payments. This means it may be most efficient to send basic incomes to digital wallets.
“Almost everyone has a phone, so if we find a pilot zone I think we should take a look at it,” Haverman said.
Furui Cheng an associate professor at China University of Political Science and Law’s Business School, said the China Basic Income/Social Dividend Research Network is working with UNDP to plan the next steps for a pilot program in China.
Cheng said they are looking to work with local governments and raise money from technology companies.
“Basic income is the probable alternative for the future global social security system, which is facing unprecedent challenges now,” Cheng said.
“We shall learn the experiences of global existing basic income experiments as much as possible, and we welcome any suggestions from any supporters,” she said.
Zhiyuan Cui, a professor at Tsinghua University, has written how China could emulate the Alaska Permanent Fund to implement UBI. Cui explained that Jay Hammond, the Alaskan governor who created the Permanent Fund, said he often felt “closer to Beijing than Washington DC.”
Yang Tuan of the Chinese Academy of Social Sciences said the size of China means it would be a good place “to come up with many types of experiments” for basic income.Tuan, who supported the implementation of dibao when she was working for China’s social security system, said the economic dynamics of China have changed since dibao started.
“(In the past) I have been against western mechanisms of social security,” she said. “But today I think the context of China is different.”
According to Haverman, the UNDP is planning to release up to three more working papers, addressing topics such as financing UBI in China, as well as its effect on work hours.
To see UNDP China’s press release, go here.
To see the original UNDP China working paper, go here.
To inquire about the UNDP project contact Cheng Furui: cfr1978@163.com
