Guaranteed Basic Income a liberal pipe dream

By M.D. Kittle

MADISON — Be prepared for an uptick in liberal taxpayer-funded experiments now that California aims to rollout the nation’s first state-funded guaranteed basic income program.

Madison Mayor Satya Rhodes-Conway already has taken Wisconsin’s most liberal city down the path of “free” monthly income handouts, and Milwaukee Mayor Cavalier Johnson says he’d dump taxpayer money on a similar program if he had the money to do it.

While liberals gush over Universal Basic Income  as a panacea for ending poverty, the welfare programs are expensive and fail to attack the root causes of “income insecurity.” Reason and common sense should tell us the liberal initiatives are often disincentives to work and would rob resources from people truly in need.

California’s lead 

The California Department of Social Services last month announced plans to award more than $25.5 million in grant funding to seven pilot programs across the Golden State, the Sacramento Bee reported. Nearly 2,000 Californians could receive monthly cash payments of $600 to $1,200 as part of the state-funded program.

Legislators unanimously approved the state-funded program last July in a strong show of bipartisan support, the Associated Press reported.

“I think other states will be watching California very closely and following suit,” Natalie Foster, co-founder of the Economic Security Project, an organization committed to funding and studying guaranteed income programs, told the Bee.

Indeed.

Participants in Mayors for Guaranteed Income have charted plans for pilot programs in dozens of U.S. cities, including Madison.

The Madison Forward Fund, a year-long guaranteed income experimental program, recently distributed the first of 12 monthly payments to low-income Madison families. Monthly payments of $500 will be given directly to 155 households over the next year — no strings attached and no work requirements, the mayor’s office proclaims.

“The program is founded on the belief that Madison families deserve a basic level of income to support fundamental needs, and that people experiencing financial scarcity are best positioned to make decisions regarding their household needs,” a press release states.

Madison’s $930,000 pilot program is being underwritten by private donors — for now. But as California suggests, taxpayers could eventually be asked to pay the freight.

Earlier this year, Milwaukee Mayor Cavalier Johnson said he’s open to the idea of a guaranteed income program, but the city can’t afford it right now. His predecessor, Mayor Tom Barrett, was part of the Mayors for Guaranteed Income movement and directed city officials to come up with a program. Former Ald. Chantia Lewis initially led the organization effort. The Milwaukee Common Council passed a Universal Guaranteed Income pilot program, but Lewis was subsequently kicked off her committees after being charged with multiple criminal counts connected to the theft of some $20,000 in campaign funds and false travel reimbursements from the city. The former alder was sentenced to 30 days in custody and three months probation.

Milwaukee’s guaranteed income program has been stalled since July 2021.

Finland and U.S. failures 

The programs in Madison and elsewhere target low-income residents. Universal Guaranteed Income programs in their purest sense provide “free” cash regardless of income.

It’s a redistribution of wealth scheme that would rapidly expand government dependency, say critics of the welfare programs. They point to Finland.

Two years after it became the first European nation to launch a basic-income trial in which nearly 2,000 unemployed residents were given a regular monthly stipend, many of the recipients remained jobless, according to Business Insider. Proponents blamed the failure on a flawed experiment model, but the costs to support a full-scale Universal Basic Income program would have been staggering.

As Investors.com, reported, a form of UBI has already been tested in the U.S. It, too, failed.

The best available evidence about the potential effects of these programs comes from the federal government’s “negative income tax” experiment, according to Vijay Menon, former research assistant at the Heritage Foundation. He wrote:

The experiment, which ran from 1968 to 1980, consisted of four random, controlled trials across six states designed to test the negative income tax. Similar to the universal basic income, a negative income tax guarantees a minimum income, which phases out as earnings increase.

In his 1984 book “Losing Ground,” (Libertarian scholar Charles) Murray described the negative income tax experiment as “the most ambitious social-science experiment in history.”

“No other even comes close to its combination of size, expense, length, and detail of analysis,” he wrote.

As Murray recounted, the experiment’s planners hoped that providing a minimum income would encourage work. But their worst fears were realized when the results showed the opposite.

Evaluations of the experiment found that the negative income tax reduced “desired hours of work by 9 percent for husbands, by 20 percent for wives, and by 25 percent for single female heads of families.”

For single males who were not heads of households throughout the experiment, the reduction in hours worked per week was a staggering 43 percent.

“It would steal resources from those truly in need for broader distribution. It would effectively warehouse people who might otherwise find ways to contribute to society and do so at great cost,” wrote Forbes’ Milton Ezrati in a piece headlined, Universal Basic Income: A Thoroughly Wrong-Headed Idea. 

And leave it to San Francisco — the most Californian of California cities — to go full woke on its guaranteed income program.

Mayor London Breed recently announced the city will launch a guaranteed-income pilot program specifically for transgender, nonbinary, intersex, and gender-nonconforming people, according to Fast Company. It’s an effort to drive down high rates of poverty, unemployment, and homelessness among those communities.

“Over an 18-month period starting in January 2023, 55 low-income San Francisco residents who identify in one of those categories will receive $1,200 per month to use as they see fit. The program, called GIFT (Guaranteed Income for Transgender People), is run by the Mayor’s Office of Housing and Community Development and the Office of Transgender Initiatives—the only one of its kind in the country,” the publication reports.

Empower Wisconsin | Dec. 5, 2022

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