Are More Guaranteed Income Payments in Our Future, and Do They Discourage Work?

A number of cities and counties across the country are experimenting with guaranteed income payments, supplementing programs on the federal level.  There are at least 20 such pilot programs currently in existence, designed to study the concept of giving low-income persons money with none of the traditional strings of welfare.  The idea is to gain research from which to determine appropriate policy for the future, but the projects are small in scale and so far have given out less than $35 million.  Examples include San Francisco, which has given out $1,000 a month to 130 persons lasting six months, and Hudson, New York, which is paying a random selection of 25 low-income residents $500 a month for five years.

If these programs sound radical, consider that Congress itself passed a temporary mass cash distribution program in the form of stimulus checks to a majority of Americans.  Many believe the closest thing we have to a long-term assistance program is the child tax credit, which sent eligible parents between $250 and $300 a month for each child they have.  This current level of child tax credit expired at the end of 2021 without being renewed. 

There is considerable debate from both sides of the aisle about these and similar programs.  Many years ago, the Nixon Administration almost passed a national basic income policy for all but the wealthiest Americans.  The concept is quite simple, that if you give people money, they are going to be better off, but the question is are they better off compared to what?  

Some believe that the limited duration and scope of the current programs are not sufficient to determine the policy moves that could be considered.  The biggest fear is that a guaranteed income would deter people from working at all.  Even supporters can see that the monthly support sometimes reduces work hours.  Supporters are also divided as to whether a basic income concept should take precedence over other social programs like universal healthcare or affordable housing.

This is part of our March 2022 Newsletter.

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