Why Not Just Give Poor People Money?

July 14, 2014

Not long ago, a Chinese millionaire decided to invite some homeless people for a fancy free meal, with $300 checks as a post-dessert treat. The operators of the shelter he contacted agreed to supply the guests, but only if he donated the money to the shelter instead.

Some of the guests might use their cash gifts to buy alcohol and drugs, the executive director reportedly said.

The story provoked some sputtering and muttering, as you might imagine. It also gave rise to a New York Times op-ed that teed up an idea that’s been around for awhile. Why not just give the poor cash?

This, in fact, has been done, to a limited extent, in some developing countries. Professor Christopher Blattman, who wrote the op-ed, provides examples, including some trial programs he and colleagues had assessed.

For the most part, recipients used the money to improve their lives. Some extremely poor women who were given $150, plus a few days of business skills training nearly doubled their earnings, invested in some “durable assets” and, on average, tripled their savings.

Even homeless men and drug users in Liberian slums bought themselves some clothes and “ate and lived better.”

In most of the trials, people worked more after they got the grants, though the trials apparently didn’t impose work requirements, as our major cash assistance program does — and SNAP (the food stamp program) for people like at least some of the Liberian slum-dwellers.

Would handing out cash, with no strings attached, work here — and on a large scale? We don’t know. The U.S. projects Blattman mentions required families to set goals and report on progress, make efforts to “build up their human capital,” etc.

What we do know is that private donors, public officials and nonprofits like the New York City shelter are likely to take a dim view of addressing poverty in the simplest, most direct way, i.e., by giving poor people money.

Even one of the projects that linked cash to goal-setting and the like encountered “mistrust from donors and other nonprofits who held hard to the view that poor people can’t make good decisions,” Blattman says.

This is a commonly held view, I think. In some cases, it’s a form of blaming. People are poor because they made bad decisions — didn’t finish high school (or go on to college), had children before they were married, etc.

And how many stories have we read of the extravagant and/or unhealthful things people buy with their food stamps? How many proposals to keep them from using their benefits this way?

We see something of the same view in widely-reported experiments designed to show that poor people make bad decisions through no fault of their own, but because their brains are overloaded with worries about not having enough money. Note the assumption here.

Awhile ago, blogger Matt Bruenig figured that we could cut poverty in half by giving every American about $3,000 a year, which we could each use however we chose.

This was perhaps more a thought-provoker than a serious proposal — a way, as he said, of showing that the obstacle to “dramatic poverty reduction” is politics, not the inherent complexity of devising effective solutions. Nor the cost.

Yet he’s not enthusiastic about simply giving everyone who’s poor enough money to lift them over the poverty line. This, he says, “would probably cause intolerable numbers of people to drop out of the labor market.”

Reihan Salam at the National Review objects to “unconditional income support” — and for somewhat similar reasons. “[I]t might help the most motivated poor people with the strongest social networks to raise their earnings potential,” he says. But it would harm the rest because they wouldn’t engage in gainful employment.

The biggest worry for him, it seems, isn’t what this would do to our economy, but rather that the poor would miss out on the personal benefits work provides.

Brink Lindsey, a “bleeding heart” libertarian whom Salam cites, elaborates on this point at length. “Joblessness,” he says, “means not only lack of income, but also lack of status, lack of identity, and lack of direction. It is the path … to anomie and despair.”

I suppose, in our society, this is generally true, though we can all think of exceptions — just as we can all think of jobs that, if anything, impair one’s sense of personal identity.

What’s interesting to me is that both Salam and Lindsey assume that poor people will make a decision that’s bad for them. They’ll forgo personal fulfillment and chose “anomie and despair” instead.

I doubt that giving no-strings cash to poor people is the solution to poverty. Among other things, it’s unimaginable that we’d give them enough. But, as Blattman says, “why not try” and see what happens?

 


Four Candles on My Blog’s Birthday Cake

December 6, 2012

Today is my blog’s fourth birthday. So I’m going to indulge in a few reflections.

Things I’m Grateful For

I’m grateful for the many organizations whose research and advocacy make my posts possible. I’m awed by the quantity and quality of what they produce.

I’m also grateful for the inspiration they provide. Huge challenges. Disappointing results sometimes. Partial victories more often than total wins. So much effort to preserve what’s been won.

I’m sometimes inclined to feel that advocacy is a hopeless labor — forever rolling the boulder up the hill only to have it roll back down again.

But then I see how the advocates I admire draw strength from their core values and keep on keepin’ on, while always looking for ways to do more and better. I’m uplifted by their unquenchable spirit.

I’m grateful to the issue experts who take time to answer my questions — and sometimes to send me even more information.

They’ve enabled me to avoid blunders and to tackle points I’d otherwise evade, knowing I’d be likely to blunder. Not claiming I’ve made no blunders, however.

I’m very grateful to the organizations that have sort of taken me into the fold, even though I’m just a lone blogger. The feeling that I’m in some manner part of a like-minded community has become a sustaining part of an otherwise rather solitary life.

I’m grateful to the people who read my posts. I do write for you, not for myself.

Lastly, I’m grateful for the blog itself –and not only because it’s a precondition for the other things I’ve named.

For me, the blog provides a discipline for learning. Scads of interesting things I might dip in and out of — and often do. But I’ve got posts to publish on a regular schedule. So I’ve got to fix on an issue and try to get my mind around a manageable piece.

And then follow it because even issues I think I’ve got a handle on keep evolving — or surfacing again in different forms.

I’m by choice the hedgehog who knows many things rather than the fox who knows one thing well.

Thanks to the blog, I know more things than I did four years ago — and feel I’m getting to know some of them closer to well over time.

Things I Hope For

I hope to put a fifth candle on my blog’s cake. By then,  I hope I’ll feel that it’s better than the four year old I’m reflecting on now.

I don’t know quite what “better” should be — except posts that are more interesting and useful for the people who read them.

I’d be extremely grateful for feedback of any sort — now or whenever the spirit moves.


Bits on Work Requirements, Income Inequality and Judging People

October 4, 2012

Another “scrapbook” of items that might have become full-fledged posts, but didn’t.

It Really Is All Politics

I observed awhile ago that the Republicans were making a fuss about waivers the Obama administration has offered states to improve their Temporary Assistance for Needy Families programs was based on the source, not the substance.

That was before the Romney campaign jumped on the issue, with a spate of ads accusing the President of “gutting” the TANF work requirements — a claim that’s been roundly debunked by fact-checkers.

Then House Republicans decided they’d flog the issue too. Before they left the Capitol, having briefly visited, they passed a resolution to block the waivers. Some Senate Republicans tried — unsuccessfully — to get a vote on a similar resolution before they also hustled home to campaign.

But Wonkblogger Dylan Matthews has unearthed proof that Republicans — at least those on the House Education and Workforce Committee — don’t really care about those work requirements at all.

In June, they passed a bill revamping the Workforce Investment Act — the single largest source of federal funds for job training, counseling and the like.

The bill would let states roll all their federally-funded workforce-related programs together into one big Workforce Investment Fund — not only those funded under the current WIA, but many others, including TANF.

The Congressional Research Service analyzed the bill and concluded that the TANF work requirements might no longer apply if states opted for the Investment Fund because TANF wouldn’t be a separate program any more.

Some ambiguity here. But none in what the bill tells us about Republicans’ purported concern for those very restrictive work requirements — or their enthusiasm for state flexibility so long as it’s not offered by a Democrat.

What I Didn’t Know About the Census

As I guess you know, the big downside news in the latest Census Bureau report on its Current Population Survey wasn’t the poverty rate.

It was the unusually large increase in income inequality last year — or more precisely, the widening gap between the top fifth on the income scale and all of us who occupy the lower fifths.

What I didn’t know is that the gap is probably much wider — at least, between the richest fifth of households and households trying to get along on incomes that put them in the bottom two fifths.

That’s mainly because the Census Bureau doesn’t count capital gains as income. Yet profits from the sales of stocks, bonds, real property and the like flow primarily to the top fifth — and within this privileged group, to the very wealthiest of all.

The Bureau also limits the income information it collects for this very wealthy group. All salary income over $999,999 per job gets recorded at this amount. We know that some big corporate types get a whole lot more.

So if we want to see what’s really happening with income inequality, we’re better off with analyses based on Internal Revenue Service figures — or a combination of these and the Census figures.

Here’s what the latest of each type look like, courtesy the Center on Budget and Policy Priorities.

Judge Not?

You’ve all heard of food stamp challenges, I’m sure. Now an organization called Everyone Matters has come up with a very different sort of challenge.

On November 19, we’re to go for 24 hours without judging anyone for anything — out loud or in our heads.

“They have as much right to be who they are as you do,” EM says. “Everyone gets to choose for themselves … [W]e are no better or worse.” Meaning, I think, that no one’s choices are better than anyone else’s.

I’m quite sure I could refrain from judging people on most of the bases EM cites as examples. I tend not to judge people by what they wear or how they behave in their everyday, private lives, unless they deliberately hurt others. Never judge by where they come from or their race, age, disability, etc.

But could I go for 24 hours without judging anyone on the basis of their social and/or political views? Highly doubtful, as those of you who’ve read my posts — even the first fragment here — would guess.

Frankly, I don’t think that taking an anything goes attitude toward people who demean others because they don’t earn enough to pay federal income taxes or who claim our government does too much to help the poorest of them is something to strive for.

Nor do I see any value in suppressing admiration for people who commit their lives to serving the needs and interests of the most vulnerable in our society.

There’s a difference, I think, between believing that all men (and women) are created equal and believing that all their opinions — and the actions that follow from them — are equal too.

And you?


What Is This American Dream Anyway?

October 10, 2011

Recent events have got me thinking about the American Dream.

Here in our nation’s capital, a conference brought together a large group of well-known progressives under the rubric “Take Back the American Dream.”

The plan, we’re told, was to “channel … grassroots energy into an unstoppable force” that would counter corporate and Tea Party threats to “the fundamental pillars of middle class prosperity.”

One of the two sponsoring organizations was the newly-formed Rebuild the Dream — a nonprofit that “tells the story of, and acts as a hub for the emerging American Dream Movement.”

It’s got a contract that’s clearly a counterpoint to the Republicans’ Contract With America and the update Pledge version they issued last year.

Ten steps to get our economy back on track — mostly policy positions that progressive organizations have argued for at least since the last Presidential election.

It’s the preamble, however, that tells us what the American Dream means to the organization and the more than 306,000 people who’ve signed on to the contract.

“Liberty and justice … for all,” it says. “Americans who are willing to work hard and play by the rules should be able to find a decent job, get a good home in a strong community, retire with dignity, and give their kids a better life.”

We see similar sentiments in the We Are the 99 Percent stories brought to us, we’re told, by “the people who occupy wall street.”

As Washington Post blogger Ezra Klein observes, these generally aren’t rants against the system, anarchist manifestos or calls for revolution, though some of the movers and shakers envision the Wall Street occupation as a seedbed for radical change of some sort.

They’re “small stories of people who played by the rules … and now have nothing to show for it” — or “worse … tens of thousands of debt.”

Here again the notion of playing by the rules and the expected payoff.

The very fact there are so many stories tells us something about the distress that millions of Americans are feeling.

The home page summarizes many of their grievances. “We are getting kicked out of our homes … forced to choose between groceries and rent … denied quality medical care … forced to work long hours for little pay and no rights, if we are working at all.”

Add to these the many references to large debts, mostly for college loans. These tell us something about the age group most actively engaged in the Occupy Wall Street movement, but also why.

The writers feel betrayed by the rules.

Get a good education and you’re on your way to a secure middle-class life. Who didn’t hear this during their growing-up years?

But the Heldrich Center reports that only 56% of those who got their degrees last year were employed in spring 2011. Stories of those who’re tending bar, pumping gas or flipping burgers at McDonald’s are unfortunately commonplace.

Many more figures on the American Dream blog, which proclaims that “millions of young Americans want what was promised to them. They want good jobs that will enable them to enjoy the ‘American Dream.'” And they’re “mad as hell.”

When the term “American Dream” was coined, in 1931, it referred mainly to equality of opportunity.

“It is not a dream of motor cars and high wages merely,” wrote James Truslow Adams, “but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

Rebuild the American Dream’s contract reflects this vision in its reference to “liberty and justice.” But — and I think this is characteristic of the common understanding now — “justice” means reaping the economic rewards of “playing by the rules.”

The problems that have brought the American Dream to the fore are, in many cases, recession-related.

But they seem to have convinced many people that something is fundamentally wrong with our system — something that can’t be cured just by creating more jobs and getting the rich to pay their fair share.

And indeed, something is fundamentally wrong. But it’s something — or rather, some things — that have been wrong for longer than the American Dream has been part of our language.

There have always been people who worked hard, stayed out of trouble, honored their debts, scrimped and saved as best they could and yet never got anything like the payoffs that the current American Dream promises.

No “pillars of middle class prosperity for them.”

I would hope that any reforms that emerge from the groundswell of anger and frustration we’re witnessing would bring the American Dream within the reach of these people too.


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