Monthly Archives: June 2015

The Dreamer’s Case for a Guaranteed Basic Income

There’s been a big push lately to increase the minimum wage to $15 an hour. Seattle was the first to do it, and other places, like New York and Los Angeles, are pushing to up the minimum wage to the same level. But there’s a lot of push back, because doing so puts the onus on the business. They have to eat the costs and pass them on to their customers. And it still doesn’t mean that someone who wants a job can get it. The conventional wisdom says that there will be less jobs with these higher minimum wages. Of course, thanks to the value of those extra dollars to the people who have the least, there might be a boost to the local economy as they spend their new dollars.

But there’s another option. Guaranteed basic income (GBI) would pay everyone a minimum amount yearly. Yes, everyone. You can sit on your ass and get the money. No means tests, no hassles over whether you are on drugs, just a check. It would also eliminate all other social support programs, like welfare, food stamps, and social security. And, of course, it would eliminate the minimum wage. The simplicity of it appeals to both liberals and conservatives.

But the best reason to implement GBI is that it gives labor the power back. Your survival is no longer dependent on your employer. You have the money to provide for your basic needs, any work you do pays for your extra ambitions. Right now, we’ve got a ton of people working multiple, low-paying jobs just to provide for their family. McDonald’s hands out tips on how their employees can survive on minimum wage, including how they can get food stamps.

Now imagine if those people did not have to work those jobs in order to make ends meet. A lot of people would be happy just getting the basics and would drop out of the labor force. These jobs would have to pay some amount that makes that job worth it to an individual. Would pay rise? Maybe. Employers would definitely have to do more in order to attract workers. You wouldn’t see 11,000 people apply for 400 Walmart positions, though.

The other thing it would do is make up for a lot of the productivity gains from the past 40 or so years that workers haven’t seen. A lot of that has come from automation and computer technology. The employee is still doing the same job, albeit with a computer or with the help of robotics. Why pay them more? And computerization and automation is only going to increase. When we are replaced by robots, we’ll need to feed ourselves somehow.

The current government fix for poverty and financial stress is a combination of welfare programs and tax breaks. Welfare programs are often labyrithine and frustrating, especially if you work another job and have to schedule time in their offices around you work. Tax breaks help only those with enough income to afford a tax specialist. Neither of these have been very effective. Maybe it’s time to try something new.

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Why Do Those Bums Get Free Homes?

Last time, we talked about the problem of situational homelessness. Chronic homelessness is a different story, and the financial cost of the folks who live on the streets for years at a time is staggering. According the Secretary of Housing and Urban Development, each person living on the streets costs taxpayers about $40,000 per year. Outliers, like the famed Million-Dollar Murray, can cost way more, depending on the hospitalizations, jailings, emergency shelter, and and emergency services that this person encounters, it could be lots more.

It turns out that ending chronic homelessness has a pretty surprising fix: give them free homes. It’s cost effective and manages to get help people who are pretty broken overall.

But that’s not what this post is about. This is about the knee jerk reaction people have when they hear about this plan.

If you look at the published articles about the program, they are all pretty glowing. Even conservatives like it. But ask people on the streets and you’ll get some heavy push back. When I first heard about it, I mentioned it to the person I was dating at the time, and they said it was disgusting. She couldn’t even believe that I could find this idea the least bit interesting. Not even worth talking about why she found it offensive.

The thing is, she had experienced a bout of situational homelessness herself and was at that time building a small business. So the idea that you would give away homes to drug addicts and losers for doing absolutely nothing is absolutely offensive to someone who built themselves up from nothing.

She’s not alone. Check the comments section at any article about this or this Imgur post and you’ll see the rage over someone putting something over on them. Here’s a quick sample:

  • “Did that include the long term effect of motivating people ‘above the cutoff line’ to quit and be homeless to get a free house?” -Imgur user twozerooz.
  • “Well the nonprofiteers (sic) and their friends and families are certainly getting rich. The developers too. The drunken drug addicted trash that get the fancy housing. Well they are still drunk and addicted. They do ruin neighborhoods though. The one thing they seem to do well.” – User David Brown at the American Conservative.
  • “That’s basically the central premise of homelessness. It’s a lifelong game of moral chicken that the craven vagabonds are willing to wage until their last dying breath. Utah lost the game of chicken to what is essentially a class of extortionists. Or are they blackmailers? One or the other. I say hook up stationary bikes to generators and make these moral racketeers contribute to the greening of America, 50 hours a week minimum, in order to keep a roof over their heads.” -User Jack Wheeler at the Washington Post.

For people who disagree with outright giving people homes, it’s not because the program doesn’t work; it’s because the homeless are con artists and “trash,” people looking just to get money for nothing. It’s tax money, so that’s our money! Don’t just give it to them! Wait until they are arrested or hospitalized for something, and then spend the money.

It’s true that a lot of chronically homeless people use and abuse drugs and alcohol. It might even be the number one reason people become homeless. But it’s also something people do to cope with living on the streets. America has little compassion for addicts and fewer options for treatment. In fact, some people go to jail in order to get clean.

But the kicker, the real crazy talk here is that this is some sort of shell game to the homeless. That this is a scam they are running in order to get free stuff. And that some people will decide they want to opt out of the working world and get that sweet homeless ride. This is insane. Living on the streets is incredibly dangerous. Exposure, assault, and theft are all ready threats, not to mention the long term changes to your self-image the constant insults and uncertainty cause.

It boils down to class anxiety. The American Dream says that everyone should have a shot at working hard and bettering themselves. People who get something for nothing – welfare, unemployment, housing first – are getting a leg up on the rest of us busting our humps like honest folks. And these honest folks see themselves working harder and harder just to make ends meet.

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Briefly Homeless When Crisis Hits

In 2014, 15% of the 600,000 people homeless at any given time were considered chronically homeless; that is, someone who has spent over a year homeless or has had four episodes of homelessness within the past three years and has a disability. That means the majority of people who spend time in shelters or living on the streets are there for a short time – the situationally homeless.

These people are living on the edge of survival and it only takes a little nudge – a job lost, medical bills, car breaking down – to put somebody into the danger zone. The National Law Center on Homelessness & Poverty estimates that between 2.5 and 3.5 million people will be homeless within a single year. One percent of America. Celebrities like Miranda Lambert and Jennifer Lopez have opened up about their time without shelter in order to shed some light on the issue.

Miranda Lambert

Miranda Lambert experienced situational homelessness.

And the issue is that people living on the streets aren’t just junkies and drunks; it’s families. It’s kids from abusive homes. It’s blue collar folks who got a pink slip while their job went overseas. Like a lot of poverty issues, homelessness isn’t a matter of personal failing; it’s a matter of Americans running a tightrope act on a razor-thin wire. And there’s no net to catch them.

One of the big reasons that this happens is the cost of housing itself. This fun little map shows how much per hour a person would have to make in order to afford a two-bedroom apartment at market rates. There’s no state in the country that you can work 40 hours a week at minimum wage and not have it take more than a third (the amount that the study’s authors consider a reasonable percentage) of your income. Families are either working more or spending a greater percentage of their income (or cramming into a one bedroom). Or both. That’s a lot of time gone to live paycheck to paycheck.

The number of hours at minimum wage you need to work per state to make rent.

The number of hours at minimum wage you need to work per state to make rent.

With employment becoming more unstable as nearly everything becomes part of the gig economy, more people will soon get to live on this margin. We’ll be underbidding each other on who gets to assemble Ikea furniture so we make rent. Because if we don’t, we’re looking for space in a shelter. Minimum wage hikes are fought against tooth and nail because economists can’t seem to agree on whether they’ll help or hurt. But ask anyone trying to make rent on a minimum wage job. You can’t have just one.

Situational homelessness is a hard problem to tackle, maybe even harder to solve than chronic homelessness. With the chronically homeless, states like Utah have found success in simply giving them homes. But if you slip into brief homelessness whenever crisis hits, what’s the solution? You can’t give everyone homes; many families would be too proud to accept it. But making sure that someone who works gets paid enough to stay off the streets would be a start.

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