Despite popularity, guaranteed basic income is not the answer to upward mobility

Few public policy ideas have spread as fast as guaranteed basic income has across America’s largest local governments. The most recent, Los Angeles County, just approved a pilot program to give at least 1,000 residents $1,000 a month for three years. The County Supervisors gave the Chief Executive Officer 30 days to find funding for the program and six months to come up with a plan to expand the program.

L.A. County Supervisor Kathryn Barger, the lone dissenting vote, released a statement saying, “Implementation of ‘Guaranteed Basic Income’ has yet to be fully researched and vetted in a jurisdiction comparable to ours. As the largest county in the nation, we should be more diligent, thoughtful and strategic before we implement a program of this nature.”

In 2019, people questioned whether an idea as radical as this would take hold, but since the group behind this fast-growing policy, Mayors for a Guaranteed Income, launched, cities and counties of all sizes have moved to implement some form of it in their jurisdictions.

In July of 2020, 11 jurisdictions were on board, less than a year later the number of jurisdictions in the coalition are 51 and counting.

L.A. County may be the most populous jurisdiction to implement the policy but others in its sphere have jumped in, too, like Houston, San Antonio, Austin, San Francisco, Atlanta, Philadelphia, Baltimore and Pittsburgh.

It’s an old idea that has gained new life.

Iterations of guaranteed income can be traced back to Thomas Paine and even further. MLK, Jr. called guaranteed basic income the “solution to poverty” and President Nixon proposed it in his Family Assistance Plan. Most recently, then-Presidential Candidate Andrew Yang called for a universal basic income for Americans.

It wasn’t until Stockton, California under Mayor Michael Tubbs, implemented the idea that it caught steam. Tubbs is also the founder of Mayors for AGI.

The stated goal of the group is to advocate for guaranteed income at the local, state, and federal level, seemingly creating a patchwork of programs to model federal legislation after, but today’s iteration of guaranteed basic income is unlike other welfare programs that currently exist.

The no-strings-attached, no work requirement program doesn’t do anything to encourage upward mobility. Of course, it alleviates immediate burdens from short-term expenses, but doesn’t close gaps in wealth or income disparity.

Most of the programs consider candidates who are making at or below $30,000. The assistance could boost their annual income by $6,000-$12,000. One’s natural instinct is to do what’s in the best interest of their family, so unless a GBI recipient finds employment with a post-tax salary far exceeding what they will get from a GBI plan, then they’re likely to stay on the plan instead of moving up the next, immediate rung in the employment ladder.

On the fiscal side, GBI programs have, so far, garnered support from charitable and philanthropic dollars. Twitter’s CEO donated $15 million last December to support GBI initiatives, stating at the time that he hopes the program can “inform federal policy in the future.” A form of this on the federal level is the component of President Biden’s American Families Plan, a child tax credit giving boost for the 2021 tax year that gives most parents checks of up to $300 per month per child.

David Harrison wrote for the Wall Street Journal that a national program would carry a price tag of $1.2 trillion or 5.9% of the annual economic output of the U.S.

According to the Demographia Annual Housing Affordability Survey, Los Angeles ranked the 83rd least affordable out of 92 major metro areas. San Francisco, also a member of Mayors for AGI, ranks 85th. The report notes that “a considerable body of research associates worsening housing affordability with the implementation of stronger land use regulation,” which many of these cities have long favored.

While GBI is supposed to improve standards of living for those on the lower end of the economic spectrum, as long as local officials contain to further regulate housing, levy burdens on existing and new businesses, and increase local taxes, cost of living will continue to increase.

Fortunately, for elected officials it’s more politically expedient to hand out money to those experiencing poverty rather than pursue the heavy lifting required to address the drivers of cost of living. Policies like this create a false sense of security for those receiving the funding while boosting the political stock of those who are claiming to help.

Economic disparities need to be addressed, but long-term, sustainable solutions for upward mobility are needed, not policy with good intent that only pacifies a struggling public but continue to handicap generations to come.  

Charles Blain is the president of Urban Reform and the Urban Reform Institute.