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Universally Wrongheaded

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Universally Wrongheaded

Handing out money will not change the underlying conditions of poverty. July 20, 2018
Economy, finance, and budgets
The Social Order

Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World, by Annie Lowrey (Crown, 272 pp., $26)

“The issue is not that the United States cannot pull its people above the poverty line,” writes Annie Lowrey, “but that it does not want to.” America’s safety net fails people because it is designed to do so, she argues, “woven as it is with deliberate and large holes.” The solution, per the title of her new book, is to Give People Money.

The idea, specifically, is a “universal basic income” (UBI)—a government program that would send $1,000 to every American, every month, no strings attached, giving everyone enough to live on. A family of four would get $48,000, nearly equal to the nation’s median household income. Lowrey is a wonderful writer, and to make her case for UBI she takes readers on a fascinating global tour—from the border between the Koreas to rural Kenya, from the International Auto Show in Detroit to homeless shelters in Maine. The book falls short, though, when it moves from narrative to analysis—translating these examples, and the societal failings and challenges that they reveal, into the case for a radical policy. It mistakes a shiny object for a silver bullet.

In Lowrey’s indignant telling, many perplexing problems of the human condition are merely a failure of political will or compassion. “What we often think of as economic circumstance,” Lowrey explains, “is largely a product of policy. The way things are is really the way we choose them to be.” She believes that “poverty in the United States is a choice”—not for those in poverty, but for the society that allows them to suffer. Guaranteeing that all households receive money in excess of the government-defined poverty threshold “would, to state the obvious, end poverty.”

To state the obvious, it would not. Perhaps giving people money could reduce the federal government’s official calculation of the poverty rate down to zero. But the poverty rate is just an abstract data point, intended to approximate the share of the population living in conditions of poverty. Giving everyone a basic income would not eliminate those conditions.

For one thing, many people are incapable of using resources well. The additional cash flowing each month to drug addicts might end up in the pockets of their dealers. Nor does cash address the needs of the homeless population suffering from severe mental illness. These situations may be outliers, but so are the ones that Lowrey uses to indict the current safety net. She introduces readers to Carolyn Silvius, homeless because living with her kids was “too burdensome for them and [they] thought she might get better social support if she were in a shelter;” and to Sandy Bishop, who suffered from arthritis, fibromyalgia, asthma, diabetes, and attention-deficit disorder but never received disability benefits, repeatedly lost her food stamps, and wound up homeless as well, despite sending a daughter to college and receiving two modest inheritances along the way.

Perhaps poverty is not just a matter of consumption. Artificially raising everyone’s income does nothing to make the recipients more productive or to enable their participation in the economy and society. To the contrary, a UBI would not only excuse the well-off from concern for those falling behind; it would also exempt those falling behind from the obligation of providing for themselves. A UBI would pave the otherwise-rocky road through life for people who fail to form stable families or prepare for and invest in their own futures. Having three children would guarantee a middle-class income without spouse or employment. Those children would face no imperative to get an education and a first, perhaps low-paying, job that often serves as a prerequisite to a second, better job, and a third, and so on. That they each would have $12,000 to live on is no defense. We know what this looks like because the benefit is roughly equivalent in value to disability or Social Security. People trying to get by solely on that amount in a depressed and dissolving community—or, for that matter, in a booming but high-cost metropolis—are rarely held up as victories in the War on Poverty.

Lowrey seems conflicted about such drawbacks. On one hand, she is committed to the claims of the book’s subtitle—that a UBI would not only “end poverty” but also “revolutionize work and remake the world.”  Thus, she writes, a UBI would “allow[] people not to work” and even “change society’s understanding of value and labor.” She disparages the American “cult of self-reliance” and asks, “Why take a crummy job for $7.25 an hour when you have a guaranteed $1,000 a month to fall back on?”

On the other hand, she doesn’t embrace a work-optional future. She dismisses fears of a workforce exodus as “disproven conclusively.” And she insists that, “Surely, the members of the [Ortiz family of six] old enough to work would not stop working,” even with the family receiving $72,000 per year in government cash. But in her next sentence, she notes that the Ortiz parents could now refuse what she considers “terrible working conditions.”

There’s a fundamental tradeoff here with which the book fails to grapple. We want to help those who cannot help themselves, but we also want people who can help themselves to retain the obligation to do so. Providing too little help to the needy has real costs; so does eliminating expectations and obligations for everyone else, with an inundation of unearned benefits. We ought to have learned this lesson by now, after 50 years spent flooding impoverished communities with trillions of dollars in assistance, only to find the poverty rate higher today than it was in the 1970s.

Our system sometimes fails not because we want it to, but because any system is imperfect, and because painful tradeoffs are unavoidable, and because government will never get it quite right. We can do better and should strive to, and Lowrey’s reporting can help—some people in homeless shelters undoubtedly do need a temporary boost to get back on their feet. But “solving” the problem by indiscriminately spraying cash at everyone only guarantees that, for most people, we will be getting it very wrong.

Photo: Milkos/iStock

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