Cogan and Heil: LA’s new basic income program ignores everything we know about well-being

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The city of Los Angeles has begun accepting applications for its misguided Basic Income Guaranteed program. The program promises $ 1,000 a month to 3,000 poor families. The cash payments come with “no restrictions on how the money can be spent” and no requirements for participants to be employed or seek employment.

The belief that this program will help the poor contradicts centuries of experience of well-being. It ignores our ordinary understanding of motivations, and is rejected by rich academic work.

CALIFORNIA GUFANT HELPS TO FOUND THE UNIVERSAL BASIC EXPENDITURE PROGRAM LIMITED TO COLORED WOMEN

The cordless promise is a sharp departure from centuries of welfare politics. Through the ages, a hallmark of a successful welfare policy has been that recipients must undertake efforts to improve their situation in life in exchange for help. Charities, mutual aid societies, religious organizations, and, until recently, all levels of the U.S. government have embraced this policy.

The policy recognizes that social assistance given without responsibility discourages personal initiative to achieve self-sufficiency through work and a better life through family formation.

FILE - Los Angeles, California: View of downtown Los Angeles skyline and traffic on the 110 Freeway.  (Photo by Ronen Tivony / SOPA Images / LightRocket by Getty Images)

FILE – Los Angeles, California: View of downtown Los Angeles skyline and traffic on the 110 Freeway. (Photo by Ronen Tivony / SOPA Images / LightRocket by Getty Images)

The LA program rejects this ancient wisdom in favor of a new belief that unconditional help does not weaken the natural human desire for self-confidence and self-improvement. This defies common sense.

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Individuals receiving cordless assistance have fewer reasons to worry about themselves being employed, seeking employment, or improving their skills. The degree to which these incentives affect behavior may vary from one person to another, but they operate on all persons, including those with a strong commitment to self-confidence.

John F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Institution.

John F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Institution.
(Hoover Institution)

To see the effects of free cash, one only has to look at the large number of unfilled jobs and current shortage of basic goods in our local stores.

Since the onset of the COVID-19 pandemic, both federal and California state governments have flooded the economy with billions of dollars in unlimited aid. This is one essential reason why millions of able-bodied Americans choose to give up work. Nationwide there are 3.1 million fewer workers in the workforce than in September 2019. With fewer workers producing and distributing goods and services, shortages or higher prices are inevitable.

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Academic research provides more evidence of the dangers of cordless aid. In the 1960s and 1970s, government-sponsored social experiments tested the consequences of basic guaranteed income programs on labor force. The results of the experiments, especially the Seattle-Denver Experiment, were gigantic.

Despite the fact that participants knew that the experiment was temporary, workforce among participants decreased significantly.

Largely because of those results, Congress rejected President Jimmy Carter’s proposed national income guarantee program.

FILE - On this Monday, August 23, 1976 file photo, Democratic presidential candidate Jimmy Carter gives an informal press conference in Los Angeles during a campaign tour through the West and Midwest.  (AP Photo)

FILE – On this Monday, August 23, 1976 file photo, Democratic presidential candidate Jimmy Carter gives an informal press conference in Los Angeles during a campaign tour through the West and Midwest. (AP Photo)

More recent academic research on the effects of aid programs has reinforced these findings. This research has shown that even temporary exits from the workforce have long-term adverse effects on future income and employment prospects. So, for the 3,000 families enrolled in the LA program, the long-term effects of the short-term cash payments could be very detrimental.

Daniel L. Heil is a Policy Fellow at the Hoover Institution.

Daniel L. Heil is a Policy Fellow at the Hoover Institution.
(Hoover Institution)

Economics aside, the proponents of the program mistakenly assume that it does not matter whether individuals achieve a level of material well-being through their own efforts, or from government grants.

This belief ignores a crucial aspect of living a fulfilled life: efforts and sacrifices to achieve a personal goal are essential to a person’s sense of self-worth.

An effort to achieve a personal goal, rather than achieving a level of material well-being, provides the true rewards of life.

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The failure of the LA program to understand this key aspect of human nature is perhaps its most serious shortcoming.

Proponents of the program may say it’s just a pilot program, but that ignores the tendency of small pilot programs to grow into big rights. One example is the federal Supplemental Nutrition Assistance Program (SNAP). Formerly known as Food Stamps, this program began in 1962 as a pilot program. It later became a permanent right, which now provides monthly assistance to 40 million people.

Everyone should take care of the plight of the poor. But a cordless government manual is not the way to help them.

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More than a century ago, social reformer HL Wayland wrote that to really help poor society one needs to understand that “There is no bread they (the poor) want, it is a soul; it is not soup (they need), it is a spirit. ”

THE city officials would be wise to follow Mr. Wayland’s advice instead of trying to solve the poverty problem simply by throwing more money at it.

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