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USBIG NewsFlash Vol. 14, No. 69, Summer 2013 (B.I.G. = Basic Income Guarantee)

By Karl Widerquist  Posted by Scott Baker (about the submitter)       (Page 2 of 29 pages) Become a premium member to see this article and all articles as one long page.   1 comment, In Series: Economic Reform
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Gutierrez, Alexandra, "Oil Tax Referendum Meets Ballot Requirements," Alaska Public Radio Network, July 29, 2013: http://www.alaskapublic.org/2013/07/29/oil-tax-referendum-meets-ballot-requirements/

Dischner Molly, "Parnell spares budget vetoes, signs SB21," Morris News Service - Alaska, May 29, 2013: http://homernews.com/homer-news/business/2013-05-29/parnell-spares-budget-vetoes-signs-sb21

Forgey, Pat, "With stroke of governor's pen, Alaska back in deficit spending," the Alaska Dispatch, May 21, 2013: http://www.alaskadispatch.com/article/20130521/alaska-governor-signs-laws-immediately-creating-state-deficit-spending

Metcalfe, Ray, "Give away Alaska's fair share of oil wealth, give away Alaskans' PFD checks," the Alaska Dispatch, May 20, 2013: http://www.alaskadispatch.com/article/20130520/give-away-alaska-s-fair-share-oil-wealth-give-away-alaskans-pfd-checks

 

2. Opinion: Important study finds that giving money to the poor increases both employment and wages

A randomized field study recently conducted in Uganda found that giving money to people without conditions actually increases both how much they work and how much they earn per hour. The study gave a $400 one-time grant to 20 young people, chosen randomly out of a group of rural Ugandans who applied to be a part of the study. Essentially, this grant amount is a one-time basic income, sometimes called a basic capital grant.

 

Perhaps, $400 doesn't sound like much, but because poverty is so high in rural Kenya, the $400 grant is equivalent to an entire year's income for the people in the study. Researchers then followed the recipients for two and a half years to see how they behaved relative to rural Ugandans who did not receive the grant. What they found might surprise some readers.

 

Two-and-a-half years later, receipts of the grant worked 17% more hours than similar Ugandans who did not receive the grant, and they earned higher wages and salaries, so that their incomes increased by even more than the hours the worked for a total increase of 50%. If those who did not receive the grant were making $400 per year, recipients were making $600 per year. No one knows yet how long the differential will last, but it is likely to accumulate for at least several years, perhaps many years.

 

The reasons for the increase in wages and hours worked are not yet certain, but possible explanations stem back to the extreme poverty experienced by so many people in developing nations. People who face such low wages have very little time to spend either improving their skills or looking for better work. They simply must spend their time focusing on getting enough food for the next day. A basic income gives them the opportunity to step back, improve their skills and/or look for a better job.

 

The theoretical possibility that basic income could have a positive affect on wages and hours worked (especially among the poorest people) has been understood for a long time. But this study provides an extremely important piece of empirical confirmation.

 

The basic income debate should take these results seriously. These results challenge the widely-held (yet rarely-empirically-investigated) belief that poor people are poor because they are too lazy either to work hard or to learn better skills. There are billions of people around the world living on less than two dollars per day. Perhaps unconditional cash is what they need most. -Karl Widerquist, begun in Aberdeen, Shetland, Scotland, completed in Beaufort, North Carolina, USA

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a former blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:
http://www.americaisnotbroke.net/

Scott is a former and current President of Common Ground-NY (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written dozens of (more...)
 

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