A universal basic income (UBI) is one of those rare policy ideas which has support on both sides of the aisle. Progressive, anti-poverty advocates are excited about ending extreme poverty, increasing workers’ bargaining power and bolstering the safety net. And as Bruce Bartlett summarizes, the idea of a direct cash payment has earned support from more conservative and libertarian-minded critics of government bureaucracy and an extensive ‘welfare state’.
There’s still a sizable leap from opinion pages to the floor of Congress for policy ideas like this, of course. Even advocates acknowledge the proposal is unlikely to be adopted any time soon. But so far as these debates shape the political conversation about how to address low wages, poverty and inequality, it is important that its benefits and limitations be well-investigated and understood.
Proponents have argued that a universal basic income could “replace all other government benefit programs.” Whether this is possible depends on the value of the basic income. Generally, those who make this argument assume it would be somewhere between $5 and 10,000 a year, much lower than the value a family in poverty might gain from access to housing vouchers, SNAP, child care assistance, and Medicaid or CHIP. The value of these benefits would far exceed ten thousand dollars – as well they should! A basic income of $10,000 is far, far below what families need to be secure.
WOW has long advocated that eligibility and benefit levels for income support programs be determined using our Basic Economic Security Tables and Elder Economic Security Standard Index. Compared to the federal poverty levels on which eligibility for these programs is usually based, these Indexes are much more accurate measurements of families’ income needs. Comparing the BEST to local median wages demonstrates how poorly today’s wages and even standard public assistance cover the cost of basic expenses, such as rent, groceries and child care. A UBI can, however, be used to increase family economic security if it is added to the current array of support programs. Such an income can help families on the edges of poverty become more financially stable as they work towards economic security.
And this is not to mention the additional financial challenges faced by families with unique issues, including mental or physical illnesses and disabilities. The institution of a UBI should not take back housing assistance or health services that help families meet these challenges.
However burdened by bureaucratic inefficiencies, our patchwork of welfare programs still have the potential of delivering the level of support that families need to achieve basic economic security. A universal basic income offers some important benefits, but it should work with current programs, not be sold as a replacement for them.