Overwhelming Evidence that a ‘Guaranteed Basic Income’ Will Work

Basic Income Guarantee - A Surprisingly Cost-Effective Method for Eliminating Poverty

By Paul Buchheit

Guest writer for Wake Up World

We’ll have to do something drastically different to employ people in the future. Our jobs are disappearing.

The driverless vehicle is here, destined to eliminate millions of transport and taxi-driving positions. Car manufacturing is being done by 3-D printing. An entire building was erected in Dubai with a 3-D printer. Restaurants are being designed with no waitstaff or busboys, hotels with no desk clerks, bellhops or porters. Robot teachers are even interacting with students in Japan and the UK.

There are plenty of naysayers and skeptics, of course, who foresee no problem with these developments. The Atlantic proclaimed, “The job market defied doomsayers in those earlier times, and according to the most frequently reported jobs numbers, it has so far done the same in our own time.” But this is a different time, with no guarantees of future job revolutions, and in fact, this is a time of unprecedented machine intelligence that even threatens the livelihoods of doctors, teachers, accountants, architects, the clergy, consultants, and lawyers.

The fact is, most of our new jobs are being created in low-wage service industries, including retail, personal health care and food service. The only one of the eight fastest-growing occupations that pays over $33,000 per year is nursing — and even nursing may give way to Robotic Nurse Assistants. And the evidence that jobs are being downsized keeps accumulating. A U.S. Mayors study found that ‘recovery’ jobs pay 23 percent less than the positions they replaced. The National Employment Law Project estimates that low-wage jobs accounted for 22 percent of job losses but 44 percent of subsequent job gains. Business Insider, the Huffington Post and the Wall Street Journal all concur: the unemployment rate is remaining low because of increasingly low-paying jobs.

We’re fooling ourselves by believing in a future with satisfying middle-class jobs for millions of Americans. It’s becoming clear that income should be guaranteed, so that recipients have the wherewithal and incentive and confidence to find productive ways to serve society.

(For more information on the Basic Minimum Income model, please check out the article, Unconditional Basic Income – an Economic Model for a New Renaissance. In short, it involves issuing payments to low-income workers. Doing so raises families above the poverty line, re-engages them in the economy, and reduces the need for government to oversee and fund a variety of programs that are already in place for low-income earners, such as health care, policing, and social services, spending on which which has been shown to correlate directly with poverty levels.)

Evidence from Research

Credible research overwhelmingly supports this concept.

Successes in North America

One of the earliest experiments with minimum guaranteed income programs was the “Mincome” (minimum income) program conducted in the town of Dauphin, Manitoba during the 1970s. The results were never made clear, partly because of a change to a more conservative government, which put the program’s records in storage, unevaluated. One study, however, found vastly improved health outcomes for the recipients of the basic income payments, reducing the overall burden and cost of general health care and mental health services.

Within the U.S., the Alaska Permanent Fund has thrived for 35 years, even with anti-socialist conservatives in power. Texas has long employed a “Permanent School Fund” to distribute funds from mineral rights to the public education system. Wyoming has used a similar “Mineral Trust Fund” to help eliminate state income taxes. Nebraska distributes low-cost electricity from a publicly owned utility. Oregon has used the proceeds from wind energy to return hundreds of dollars to households. Vermont has proposed “Common Assets Trust” to raise money from taxes on pollution and pay dividends to residents. A pilot basic income experiment is set to begin in Oakland.

Numerous Native American communities have instituted guaranteed income programs, both in the form of shared benefits from casinos and as “land trusts”, which recognize the common ownership of natural resources. Notably, according to a Duke University analysis, the establishment of the Eastern Cherokee Indian Land Trust has resulted in fewer behavioral and emotional problems among the community’s children, relative to neighboring communities. In adulthood, recipients had less depression, anxiety, and alcohol dependence.

Trials are also scheduled to commence in Ontario, Canada. Explains Ontario Senator, Art Eggleton:

“It would provide a floor, a foundation that low-income people can then build upon for a better life… Social programs should lift people out of poverty, not keep them there, and a basic income is a new approach that could work.”

Even the concept of providing grants to homeless people seems to work. In both Utah and California, trial programs have led to stable living conditions for dozens of formerly homeless people, with few conflicts or behavioral issues within the communities, and at a significantly lower cost than the alternative of temporary shelters — especially if people without homes are given jobs, as in a new program in Albuquerque.

(For more on the housing trial in Utah, please check out the article, The Amazingly Simple and Cost-Effective Way to End Homelessness — for Good.)


Successes in Europe

Basic Minimum Income programs have also been successful in Europe.

A 2005 program in Britain added support to the argument that the reduction of poverty promotes family stability, rather than the other way around. Efforts to increase family income, especially through work opportunities, resulted in “sharp and sustained decreases in material hardship for the most vulnerable families”, and, in the cases of households with children, more spending on family needs and less on alcohol and tobacco.

A broader study of 18 European countries found “increasing employment commitment as social spending gets more generous” — in other words, dividend payments encourage people to work harder, rather than the other way around. Now Finland is preparing to launch a wide-scale guaranteed income program, and cities in the Netherlands are preparing similar experiments with basic income payments. Despite their initial rejection of a basic income proposal, citizens of Switzerland have continued to advocate for a guaranteed income plan that would provide $2,600 a month tax-free to every adult, and $650 to each child.

Meanwhile, the first EU-wide opinion survey on basic income found a great majority of Europeans not only know about basic income but are also supportive of the idea.

Successes in Africa

A program in Uganda followed young people who were given cash grants with twice the typical annual income. After four years most had invested their earnings in vocations, causing their earnings to rise by 40 percent or more, an outcome that generally lasted well beyond the four-year study period. Women overall earned more than men. As summarized by the authors of the study, “The grants are typically invested and yield high returns… even among poor, unemployed and relatively uneducated women”.

In Namibia, a two-year program yielded remarkable results, reducing rates of poverty from 76% to 16%, child malnutrition from 42% to 10%, and school dropout rates from 40% to almost zero. A Unicef-funded study in India recorded the same positive health effects, with particularly noticeable improvements among the disabled population.

The charity Give Directly, which is highly rated by the charity research organization GiveWell, provided cash transfers to poor rural households in Kenya. Results showed increased spending on food, medical needs, and education, with very little used for alcohol and tobacco, and with similar outcomes for both males and females. According to the authors of the study, “Transfer recipients experience large increases in psychological well-being.”

Basic Income Guarantee - Before and After

Almost Everyone Likes the Idea

The Guaranteed Income concept is not a left-right issue, it is not welfare for the poor or the rich, nor is it a blessing or a bane to any exclusive segment of America. Whereas liberals see it as a means of lifting millions of Americans out of poverty, many conservatives and libertarians endorse it as a means of decreasing government intervention and promoting individual choice in spending decisions, re-engaging the poor in the U.S. economy. Individuals as diverse as Milton Friedman, Martin Luther King, and Charles Murray have all promoted the concept.

Guaranteed Jobs

Perhaps most importantly, a guaranteed income could relieve some of the pressure on our newest generation of young adults, who are deep in debt, under-employed, increasingly unable to live on their own, and ill-positioned to take the entrepreneurial chances that are needed to spur innovative business growth.

A recent Gallup poll found that nearly 70% of workers don’t feel ‘engaged’ (enthusiastic and committed) in their jobs. A guaranteed income will offer young people the freedom to choose more appealing work, re-energizing the workforce. No other group of Americans could make better use of an immediate boost in income.

Paying For It?

Beside the obvious reducing in spending on health care and other services, several ways of paying for Basic Minimum Income programs have also been suggested. An extended list, detailed at You Deserve Facts, includes:

  • Collecting from Corporate Tax Avoiders
  • Collecting from Individual Tax Avoiders
  • A Financial Speculation Tax
  • Military Cuts
  • A Progressive Income Tax
  • The Reduction of Regressive Taxes
  • A Wealth Tax
  • Patent Reform
  • A Share of the Research Benefits
  • Safety Net Savings

Recommended reading by Paul Buchheit:

About the author:

Paul BuchheitPaul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (including www.youdeservefacts.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). His latest book is, Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income. Paul can be reached via email here.

This work originally appeared on www.commondreams.org and is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

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