Basic Income Guarantees Would 'Warehouse' Poor, Not Propel Them

Basic Income Guarantees Would 'Warehouse' Poor, Not Propel Them
AP Photo/Mark Lennihan
Story Stream
recent articles

As Americans struggle to recover from a deep recession fueled by the COVID-19 crisis, and respond in horror to the violence in many communities following the death of George Floyd, economic inequality and lack of opportunity have risen to the top of the political discussion.

Liberal voices like House Speaker Nancy Pelosi and former presidential candidate Andrew Yang are pushing universal basic income as a way to boost incomes, especially in economically-depressed urban areas. Basic income would, depending on the specifics, send people a check for up to $1,000 to essentially stay home and do nothing. Yang’s plan would cost an estimated $2.8 trillion.

Universal basic income is “fool’s gold” for those whose families have been stuck in poverty for generations and want to get a good-paying job and provide a better quality of life for their loved ones.

Growing up as a young man in a life of extreme poverty, I know firsthand the false promise of schemes like universal basic income.

My family and I lived in rural Texas outside Fort Worth in a single-wide trailer. My grandfather made just enough money to qualify for every government assistance program you can imagine, from food stamps and welfare to free government cheese and Medicaid.

If you had given my family an extra $1,000 a month, this would not have done anything to lift us out of poverty. This extra cash would not have moved us up the economic ladder or closed the income gap. It wouldn’t have empowered us to buy a home, move into a neighborhood with better schools, or pay for college.

At best, basic income would have provided us with a few extra dollars to pay the overdue bills, or enabled us to eat a little better than the mayonnaise sandwiches we ate at the end of the month when dollars were stretched thin waiting for the next government check to arrive.

Yes, an extra $1,000 a month might have made my family a little more comfortable in poverty, but it would have been gradually eaten away by rising costs of living and taxes. And my grandparents would have still died poor, as universal basic income doesn’t give people the economic incentive or skills needed to get a better-paying job and a ticket to a better life.

Universal basic income as a program doesn’t try to make our economy and our workers more competitive in the global economy. All it does is pay people so that they don’t even have to try.

Basic income continues the trend – as evidenced by the expanded COVID-19 unemployment benefits that pay many Americans more money to stay at home than they would make working - of politicians like Pelosi enacting subsidies rather than solutions.

America’s poor will remain poor if they don’t have the proper work skills. And even if they get those skills, they will remain poor if we don’t have a growing economy with plentiful opportunities for them to get hired and a good-paying wage.

Rather than enacting another in a long line of government anti-poverty programs that do not work, we must help those in poverty acquire the skills to adapt to a changing economy or create their own job.

That means embracing skills-based economics – helping every person learn a skill that produces a decent income through a transformation of K-12 education. By refocusing traditional public education on the end goal of work through expanded skills-based curriculum, apprenticeships/internships to gain work experience, and coursework eligible for college credit, students can graduate from high school with a professional license/certification, an AA degree, or credits to transfer toward a four-year degree.  

Apart from education, we also need to reform expensive occupational licensing requirements and other regulations that effectively serve as a barrier to poor entrepreneurs earning a living.

Instead of warehousing a large part of our workforce to stay poor under a universal basic income system, we need to prepare, engage, and empower America’s poor to succeed.  

Damon Dunn is a former collegiate and professional football player turned successful entrepreneur and fellow in business and economics at the Pacific Research Institute. He is the author of the new book, Punting Poverty: Breaking the Chains of Welfare.

Show comments Hide Comments