California’s troubling shift to “basic income” – Daily Breeze
When the economically struggling town of Stockton in the San Joaquin Valley launched a program in 2018 to provide an unconditional monthly allowance of $ 500 to a select group of residents, it was clear that supporters of the plan were hoping to incentivize other governments to adopt a similar program. Indeed, some cities in the Bay Area quickly followed suit.
Now, the California legislature has passed – and the governor is supporting – a statewide $ 35 million “universal basic income” program that will likely provide around $ 1,000 per month primarily to young people who come out of the state foster care system. The state program is the first of its kind in the country – something we hope to disseminate widely.
We tempered our criticism of Stockton’s “SEED” plan (Stockton Economic Empowerment Demonstration) on the basis that a private foundation provided the funding. Private organizations can distribute their own money as they see fit, but we saw what was coming. The legislator made specific reference to SEED in its analysis justifying Senate Bill 739.
These types of plans are now all the rage. The legislative staff report notes that “guaranteed income projects have been shown to have a significant increase in quality of life benefits”. Yes, people with extra income can afford a better lifestyle. We don’t need pilot programs to prove this point. However, such programs have two key problems.
The first is financial. The goal here is for taxpayers to fund the payments. The SB 739 costs are a rounding error in a $ 263 billion budget, but the benefits only target a small group of Californians. In this case, the legislature was wise to choose a sympathetic group. Young people in foster care definitely need help leaving this state-controlled system, which arguably explains its bipartisan legislative support.
But proponents of Basic Income generally want out-of-pocket payments to become the norm. Even California’s budget cannot shoulder this burden, whether it targets only the poor or the general population more broadly, as some advocates want. The US budget already exceeds $ 28 trillion in debt, so this is a failure at the federal level.
The second problem is a philosophical one. It is wrong to condition an ever-increasing number of Americans to turn to government for their livelihood. Employers are already struggling to find enough workers due to generous COVID-19 stimulus checks.
Universal Basic Income programs – or more targeted variations of “guaranteed income” – discourage work and business. They certainly provide immediate help, but deter people from learning the job skills that will improve their long-term economic prospects.
They also discourage the state and cities from focusing on the best income plan: a better business climate that offers a myriad of work opportunities. UBI will also create a permanent lobby for higher benefits, creating endless legislative battles over payment levels. The state plan is funding localities with UBI programs, so it will encourage more cities to start them.
The push is coming from the progressives, but the Assembly report noted that free market economist Milton Friedman was supporting something similar. The Conservatives, however, saw it as an alternative to the bureaucratic system of social services. SB 739 exempts these payments “from being considered for eligibility and benefit determination” for existing programs.
It is fine for the legislature to help foster youth, but it should not use this laudable effort to set the stage for a far-reaching, costly and counterproductive basic income program.