Eduardo Porter has a column up with the provocative headline “Why a Universal Basic Income Will Not Solve Poverty,” which intrigued me because my understanding from reading coverage by Vox’s own Dylan Matthews and others was that a UBI most certainly would solve poverty.
Having read Porter, I remain unconvinced. His argument turns out to be something more like “a universal basic income would be expensive” or “a universal basic income is an example of a poorly targeted public policy.” The former is clearly true, and the latter is at least something clearly worth talking about. But Porter’s own numbers make it very clear that a UBI would eliminate poverty in the United States and would do so at a price that, though high, is within the realm of possibility.
Right now there are 39.5 million retirees receiving Social Security benefits that average $16,020 a year. To reach the goal of a universal basic income of $10,000 per adult, we don’t need to cut each of those 39.5 million people a brand new $10,000-a-year check; we just need to raise the minimum benefit to $10,000 a year.
That would reduce the headline price tag of the UBI by a percentage point or two of GDP and not leave any seniors worse off than they are today. By the same token, if we had a UBI we could cut a few of the smaller means-tested welfare programs — LIHEAP, Section 8, “Obama phones” — and leave poor people clearly better off. Those programs don’t cost a ton, but every little penny helps. The point is you could get the total level of spending down to Sweden/Italy/Austria levels without triggering any of the perverse effects Porter is talking about.
A universal basic income could absolutely solve poverty