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Posted by: Javonni Brustow Comments: 0 Post Date: December 17, 2018

Kamala Harris and Cory Booker’s Universal Basic Income Plans have been Tried & Don’t Work

Potential 2020 candidates Cory Booker and Kamala Harris just introduced plans for universal basic income without actually calling it that because they know how divisive a term it is. Just what is universal basic income? It’s when the government gives out lump sum payments to people monthly lately under the guise that people won’t be able to find jobs and this is necessary. The problem is that we now have historic lows in unemployment so why would this even be discussed now?

For starters, Cory Booker is proposing an “opportunity account” where a child will receive $1,000 – $2,000 a year up to $48,000 by high school graduation. Kamala Harris on the other hand is planning to tax banks and financial institutions for a $6,000 annual tax credit. But what is the inspiration for this? Earlier in the year she proposed a rebate for renters citing that rent is high for people. She’s also proposing a $500 a month tax credit to families, essentially universal basic income.

Other area’s contemplating Universal Basic Income include Chicago who is looking into it to lower crime according to ChicagoNews reporter Janette DeFelice. There’s about 30 Fortune 500 companies in and around Chicago. Any of them could create job training programs as a nonprofit community benefit and that would be far more effective than just passing out free money. Chicago also ranks second in the country for its number of corporate headquarters but yet it can’t find a way to grow their economy, only further redistributions of wealth. Three years ago Illinois had the highest amount of food stamp usage in the mid-west. The Illinois Policy Institute called the state’s welfare system a trap so if redistribution of wealth hasn’t been helping them thus far, so why would UBI work?

BUt nothing’s ever free. Who stands to benefit from this? Silicon Valley of course. Uber seems to be pushing the idea. Author Douglas Rushkoff said if the economy slumps, iphones, Uber and the like will still be in people’s reach to purchase. It’s also what helps Uber sleep at night about taking taxi jobs. So instead of pushing for further market innovation like Uber did to improve the country, Uber wants to be the end all be all and everyone else just get government subsidies to survive. That’s pretty condescending.

And lastly, Universal Basic Income has been tried before in America. You don’t hear it mentioned because it goes against the current national narrative. The time period was from 1968-1980 in 6 states over 4 trials. It referred to Conservative economist Milton Friedman’s negative income tax plan. In theory, if Americans under a certain income threshholds had no handouts and just received a flat amount of money, it would be better off than the system that we currently have of a slew of handouts and subsidies. The problem is that that isn’t what happened. The amount given was on top of what they were receiving and it turned out to predictably disincentivize people from finding work.

The result of this experiment was that it lowered the “desired hours of work by 9 percent for husbands, by 20 percent for wives, and by 25 percent for single female heads of families.” So in other words, they wanted to be less productive. The single men that weren’t the heads of households worked 43% less hours per week. When people lost their jobs they took even longer to find work.  Husbands took an extra two months to find work when unemployed compared to almost a year for wives and even longer for single mothers. Libertarian scholar Charles Murray wrote the book Losing Ground in 1984 where he spoke about the failures of the program acknowledging the disincentives to work. He too felt that if our current entitlement programs were abolished, it would work. The reality is that that would never happen because the activists wouldn’t stand for it. Also, a 2016 General Social Survey showed that 70% of Americans said they’d prefer a good paying job even if they didn’t need the money.  This is a bad policy idea and misses the fact that people come to America for work and opportunity, not socialism and handouts. It’s that availability of opportunity that we should be promoting and not Universal Basic Income.

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