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We Need a Guaranteed Minimum Income

By Brian Nowak The issue of income inequality was a key feature of the 2016 Democratic party primary election. College ...

By Brian Nowak

The issue of income inequality was a key feature of the 2016 Democratic party primary election. College affordability, Stagnant wages, many employed at minimum wage jobs, and health care costs were all at issue during the election season. Frustration with the direction of the country was a factor that helped Republican Donald Trump win election in November of 2016.

Back in 1969, president Richard Nixon and his administration considered the implementation of a universal basic income for all Americans.  A family of four would have received $1600 per year, the equivalent to about $10,000 today. The Nixon administration funded test programs on a smaller scale to gain evidence about the feasibility and success of the program. The House of Representatives passed universal basic income legislation two years in a row, in 1969 and 1970. The legislation was not able to pass the US Senate.

Four decades later, discussion of the policy has come up again in light of the major changes to the economy in the USA. A Universal Basic income was proposed at a time when the welfare state was not as expensive or large as it is today. With the passage of the Affordable Care Act, a major shift towards a basic standard of living for all Americans has taken place.

Many Americans already get assistance from the federal government in some form or another. It comes in the forms of medicaid, TANF assistance, heating assistance, social security disability, and a variety of tax credits that are effectively cash transfers to folks in need. These programs can be simplified and streamlined, freeing up more dollars for direct assistance to people.  The administrative costs of some of these programs is considerable.

Many means-testing programs result in a situation where some fall just outside of the income guidelines, but still need help. A Universal Basic Income would bring each and every person up to basic minimum. Those who work part time or temp work who may earn less would, the Universal Basic Income arrangement, receive additional income that brings them up to the minimum. Those above the minimum income would not qualify.

A Universal Basic Income would also give entrepreneurs the opportunity to take more business risks. Folks starting a business have more room to take that risk if they know they will still draw some income as the business becomes profitable, or in the event the business fails.

Youth unemployment is a serious issue, and a universal basic income would give young people an income that allows them to attain higher education, start a business, or engage in volunteer activities with less pressure on them to draw an income each and every week. Young people can develop their skills full-time in preparation for whatever comes ahead for them.

Universal Basic Income, if implemented at the federal level, would give state and local governments more flexibility to address poverty. Right now, many current programs are kept in place because they are better than nothing. With UBI, reformers can experiment with approaches to address poverty without completely pulling the rug out from under the most vulnerable.