Minimum income proposal worth considering: Column

Duncan Black | USATODAY

Voters in Switzerland will soon be voting on a referendum for whether the country should provide its adult residents a minimum monthly income of about $2800. It's something we should be seriously considering here, and while implementing government aid to the poor is typically associated with liberalism in America, this is actually a very conservative way to lift people out of poverty, supported by none other than libertarian-conservative economist Milton Friedman.

People's views on just how much government assistance should be provided to people of limited means, either for people experiencing short term unemployment or for families experiencing long term poverty, differ, nonetheless federal and state governments spend a lot of money on a variety of programs which do just that. Whatever the merits or appropriate relative generosity of each individual program, having a patchwork of agencies and eligibility requirements greatly increases administration, compliance and enforcement costs.

And the general conservative complaint that welfare programs, broadly defined, trap people in poverty is not without merit. It isn't that most people would prefer to subsist on meager benefits, it's that asset and income means testing for program eligibility make it hard for people in those programs to get ahead. For people in poverty it's at best three steps forward and two steps back. If they're fortunate enough to find ways to increase their wage incomes, they'll end up losing some of their benefits. If those lost benefits include housing vouchers and health insurance for the kids, that's quite a loss.

We do provide some cash transfers for those in poverty in the Earned Income Tax Credit and the pretty temporary and limited in scope Temporary Aid for Needy Families program, and in unemployment insurance payouts for the recently laid off, but otherwise our social safety net leans towards the paternalistic. We don't give people cash. Instead we give them health coverage, housing vouchers and food stamps.

There are reasonable arguments for some of this paternalism. Some of these benefits are ultimately meant to flow to children and providing the means to obtain food, shelter, and health care for them ensures that at least some of this aid does reach the children directly, even if their potentially irresponsible parents are the decision-makers. Still it's worth asking if this all of this additional complexity and costly administration is really worth it? Maybe we should just give people some money.

It's almost impossible to imagine something as generous as the proposed Swiss program having widespread political support in this country. It might not pass in Switzerland. I'm not even sure I'd support it myself, and I'm someone who is in favor of some pretty high levels of redistribution. But the fact is that the simplest way to keep people out of poverty is to give them enough money to stay out of poverty. We already spend a lot of money trying to ameliorate the effects of poverty and a lot of money on the administration of those programs. Why don't we cut out the middlemen and just give people cash and let them decide what they should spend it on?

At some level there are two basic questions. First, how much redistribution should there be? Second, for a given level of redistribution, how best to improve the lives of recipients? There will probably never be much consensus on the first question. Some argue for a very generous welfare state, and some argue for almost none at all. But wherever you stand on the first question, it's pretty clear that the most efficient way to improve the lives of people is to guarantee a minimum income. Maybe we can agree on the policy, even if we don't agree on the amount.

Duncan Black writes the blog Eschatonunder the pseudonym of Atrios and is a fellow at Media Matters for America.

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