By: David Nicklaus
It sounds like a no-brainer: The way to alleviate poverty is to give poor people more money.
That’s the reasoning behind St. Louis Mayor Tishaura O. Jones’ push to provide some residents a guaranteed income, and it’s sound logic. Experiments in other cities show that recipients use the checks for basic needs, not luxuries or vices.
The question is whether the city can dole out enough money to make a real difference in people’s lives.
A bill introduced this month in the Board of Aldermen would set aside $5 million of federal stimulus money to launch a guaranteed income program. If it passes, St. Louis will join about four dozen cities that have initiated such programs since 2020.
These pilot programs are a variation on universal basic income, the concept touted in 2020 by Democratic presidential hopeful Andrew Yang. Instead of sending money to every citizen, as Yang proposed, the cities target residents based on income or other characteristics.
Atlanta, for example, is handing $500 a month to 300 residents whose income is no more than double the poverty line. Los Angeles is giving $1,000 a month to 3,200 parents who earn below the poverty line.
The approach makes sense to Mark Rank, a professor of social welfare at Washington University. “If you’re talking about addressing poverty, it’s a very straightforward way of doing so,” he said.
“Poverty is a lack of money.”
Critics muster two big arguments against guaranteed income programs:
They’re expensive and they may make people lazy.
Research tends to refute the second criticism: Grant recipients’ work history is at least as stable, and maybe more so, as that of non-recipients. “If you have that little bit of a cushion you can look for the kind of job you really want, and you’re more likely to stay in that job,” Rank explained.
Widespread income support programs are costly, though. Most cities’ pilot programs run for one or two years, with no promise of anything beyond that.
“Cities just don’t have the levers to pull,” said Stephen Nuñez of the Jain Family Institute, a leading researcher on guaranteed income.
“If there’s a future for this kind of thing, it has to be at the federal or state level.”
For parents, the federal child tax credit serves as a form of guaranteed income. When Congress temporarily expanded the tax credit last year, it cut the child poverty rate in half.
The local experiments have answered some interesting research questions, Nuñez said, but don’t appear sustainable. “All these pilots take a tremendous amount of coordination,” he said. “How can that be transferred to something persistent?”
In St. Louis, the $5 million that Jones wants to spend is not much money. City officials haven’t released any details, but the arithmetic is simple: If she sends checks of $500 each for 12 months, $5 million will only cover 833 people.
That won’t put much of a dent in the city’s 20% poverty rate, which equates to some 28,000 households struggling to cover essential expenses.
Helping a few of those people pay their food and energy bills for a year is a noble idea, but St. Louis lacks resources to sustain the program after the federal money runs out.
If it undertakes the experiment, St. Louis needs to study the results carefully and publicize them widely. If dozens of cities show that guaranteed income works on a small scale, state and federal policymakers may be willing to try it in a larger, more sustainable fashion.