I'm writing reviews of interesting books I read... you can find my reading list here. Prior book review: #1 .
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Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World (Amazon link)
by Annie Lowrey (Twitter, The Atlantic)
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Ever read a book and think “gee, I wish I’d read that earlier?” In the case of Annie Lowrey’s book on unconditional cash transfers (sometimes conflated with universal basic income or UBI), that definitely happened, and not just because it’s a very good read. It’s because my opinion on such transfers has changed a lot over the past year and a half, and I wish I could have done a before/after comparison of my reaction to the book.
The first time I spent much time thinking about UBI was when I moved back to the San Francisco Bay Area in the summer of 2015 to work at a tech company. Lots of people in my professional and social world talk about UBI. A commonly held view is that technology is on the verge of (or maybe already) radically upending employment, leading to massive and permanent job losses; a UBI would be essential to cushioning the blow from such technological unemployment. I was skeptical about this “sci fi safety net” for two reasons - because worries about technological unemployment are somewhat overheated, and because I thought the appetite for safety net expansion in the US was close to nil (indeed, I was convinced we were headed for cutbacks). I still hold the former view, but not the latter.
What changed my opinion was the COVID19 pandemic, its impact on the US economy, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which temporarily caused a massive increase in the American safety net. Gross domestic product - the value of goods and services produced in the United States - fell sharply in the spring of 2020. Tens of millions of Americans lost their jobs. But unlike past economic downturns, when such an outcome would have been potentially devastating to poor and middle-class Americans, poverty (temporarily) fell. In one fell swoop, Washington DC convinced me there was political appetite for a stronger and more comprehensive safety net.
And that brings us to “Give People Money”, which I recently finished. Though the subtitle characterizes this as a book about UBI, it’s really about a broader range of policies that are probably best described as unconditional (or nearly-unconditional) cash transfer programs. Instead of setting narrow and specific criteria for receiving such benefits, it’d be given to people with relatively minimal and simple hurdles (Lowrey is lukewarm to means-testing but not aggressively opposed). And instead of restricting how those benefits are provided or what they could be spent on, it would fall back on a core capitalist axiom: give people money, and they usually have the common sense to spend it on what they really need.
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Lowrey approaches the idea of giving people unconditional transfers from many different angles: Silicon Valley’s worries about technological unemployment, the challenges of the working poor, concerns about labor disincentives, the overpowering complexity of existing American poverty-mitigation programs, the grim intertwining of American poverty with the country’s legacies of racism and sexism. She also explores its application as a poverty-reduction measure in Kenya and India.
The empirical evidence on unconditional transfers are quite positive. They help to significantly reduce material poverty. They improve the mental and physical health of the poor (and very importantly, poor children). Work disincentives, which economists and policymakers often worry about when discussing safety net expansion, seem to be small or even non-existent (at least when transfers are relatively small relative to median income). Worries that transfer recipients will waste the money are unfounded.
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Given the benefits of such a policy, it’s probably not surprising that variants of an unconditional transfer program have gained traction on both sides of the political aisle (though not without opposition). As part of the stimulus bill passed a few months ago, Congress massively expanded the Child Tax Credit (CTC) into something approximating an unconditional transfer program (with some means-testing, and limited to people with kids). Lowrey laments the “kludge” of America’s existing safety net, but it’s likely that whatever UBI-ish scheme the US eventually adopts will be pretty kludgy. Nevertheless, two and a half years after publishing this book, she’s probably pleased to see things moving in the right direction.