Basic Income is the Wrong Solution for Atlanta’s Poor

Basic Income is the Wrong Solution for Atlanta’s Poor

by | Jan 27, 2022

Basic Income is the Wrong Solution for Atlanta’s Poor

Hope and help is the only true solution.

Originally posted on RealClearPolitics.

Three hundred Atlanta residents are poised to receive $500 per month for a year, no strings attached. It’s part of a nationwide “basic guaranteed income” experiment largely bankrolled by Twitter founder and former CEO Jack Dorsey.

To qualify for the pilot program, residents must be 18 years or older and have a maximum income of 200% of the federal poverty threshold ($53,000 for a family of four). The ultimate goal is to gauge how the guaranteed payments impact residents’ economic, mental, and physical health.

 

The Alliance for Opportunity is focused on a mission to reduce those in poverty by 1 million over the next 10 years.

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A noble mission with failed outcomes

The mission of this pilot is laudable in attempting to help lower-income Atlanta residents during particularly trying times. But there are reasons to proceed with caution. A significant reason is how these payments could provide a perverse incentive that would discourage people from finding work or moving up the economic ladder. 

Ultimately, we believe there is a better way forward that supports dignity and opportunity for those in need. The mission should be to empower lower-income earners to attain a better life.

For Atlanta to make a real difference in seeking innovative solutions to providing poverty relief, the city must focus on giving those in need opportunity, not simply pity. Most people living in poverty want to provide for their families, get ahead, and live dignified, self-sufficient lives.

In 2020, the poverty rate in Georgia was 21.3%. Major welfare programs in the Peach State in September 2021 had around 3.9 million residents enrolled.  

A key is to improve opportunities to work while giving greater flexibility to our neighbors. This can be done in changing how they may use their temporary government assistance payments to meet their current needs while setting them up for self-sufficiency later. 

 

Exploring Empowerment Accounts

One innovative idea that would do just that are Empowerment Accounts.

These accounts would provide safety net funding to certain eligible recipients on a debit card. To qualify, people would need to be working, training, or being educated while meeting with a community case manager. The program also includes a financial literacy and savings component that paves the way for recipients to pay for long-term needs. 

Atlanta leaders could test these Empowerment Accounts in a pilot project, funded at first by philanthropists.

Why are Empowerment Accounts a better solution than basic guaranteed income?

Their primary benefit is that they treat each recipient as an individual with a long-term upward trajectory. We must help the impoverished through immediate aid, but the best long-term solution to poverty is through creating incentives and opportunities for work. This combination of work and community support will help build the hope and social capital too often lost with the current safety net system.

If implemented on a state or even national scale, Empowerment Accounts would also provide a crucial reform to our flawed safety-net system. 

They would condense and replace the overstretched, wasteful programs into one consolidated, more effective program. By reducing bureaucratic bloat and streamlining payments, more resources would go to needy families while fostering eventual financial independence.

Another benefit of Empowerment Accounts over the current safety-net system is that they would eliminate burdensome benefit cliffs when current programs end. Safety net recipients are often discouraged from earning an additional dollar because the cliffs often trap them in a system they yearn to escape. As a solution, Empowerment Accounts funding would taper over a specified period and any savings would stay with the recipient, helping with the problem of a benefit cliff.

The goal of Atlanta’s basic income experiment is commendable, but as with so much in the charitable and welfare sectors, it is misguided. It oversimplifies the struggles of low-income Georgians and falls well short of providing a comprehensive way forward — which should be centered around providing a path to self-sufficiency.

This was originally posted on RealClearPolitics.

 

GCO launches anti-poverty policy site as part of Alliance for Opportunity project

GCO launches anti-poverty policy site as part of Alliance for Opportunity project

by | Jan 27, 2022

GCO launches anti-poverty policy site as part of Alliance for Opportunity project

Alliance for Opportunity announces new policy roadmap to reduce poverty

The Georgia Center for Opportunity launched a resource that provides key policy recommendations for reducing the number of people in poverty as part of their newly formed Alliance for Opportunity project. The recommendations are based on creating generational transformation in Georgia, Louisiana, and Texas, but the policy implications can be applied nationally as well. On the website, policymakers will see an explanation of how the safety net is failing, the path forward, and practical policy options that state leaders can act on now to advance a comprehensive and transformative safety-net reform.

The Alliance for Opportunity is a collaborative initiative between the Texas Public Policy Foundation (TPPF), the Pelican Institute for Public Policy (Pelican Institute) in Louisiana, and the Georgia Center for Opportunity (GCO). It is designed to promote solutions and build the political will to present and advance a comprehensive and compelling plan for reform to alleviate poverty by allowing people to find work and opportunities that will lead to a flourishing life.

 

The Alliance for Opportunity is focused on a mission to reduce those in poverty by 1 million over the next 10 years.

VISIT THE SITE

According to 2020 federal Supplemental Poverty Measure numbers, Georgia had 1,383,000, Louisiana had 869,000, and Texas had 3,601,000 residents in poverty.

The goal of the Alliance for Opportunity is that over the next 10 years, we reduce the number of people in poverty (defined above) by 20% in each state. That means 1 million people out of poverty: 276,600 people in Georgia, 173,800 people in Louisiana, and 720,200 people in Texas.

“We couldn’t be more thrilled with this new online portal that will be the go-to place for policymakers to find solutions to the most pressing poverty issues in our culture today,” said Randy Hicks, president and CEO of the Georgia Center for Opportunity. “Simply put, the U.S. safety net needs a paradigm shift. Our low-income neighbors deserve to move out of dependency, find lasting self-sufficiency, and flourish. The status quo is unacceptable.”

You can read the full press release from the Alliance HERE.

 

Money Can’t Replace Meaning and Purpose

Money Can’t Replace Meaning and Purpose

by | Dec 15, 2021

Money Can’t Replace Meaning and Purpose

American poverty

Work has intrinsic value

Last month, I had the honor of participating in the Heritage Foundation’s annual Antipoverty Forum, where scholars and practitioners discussed the state of poverty in the country and the local efforts to confront the issue.

The discussion this year centered on the Biden Administration’s Build Back Better (BBB) bill that is now making its way through Congress and the ways in which the bill would undermine work by using much of its $2.4 trillion to expand safety net benefits and create new entitlements, all while eliminating work requirements.

Despite unemployment numbers dropping nearly to pre-pandemic lows in most states, what is not widely understood is that labor force participation (the number of people who are able to work and are actively looking for work) is much lower than when the pandemic began. Some 4-5 million people have effectively dropped out of the workforce – at least for now – despite record job openings (10.4 million in September).

While the drop in workforce numbers is partially explained by fear of COVID and mothers forced to stay home with children, much of it can only be explained as being caused by increased benefits (and the elimination of many requirements for qualifying), rescue-related payments and, now, monthly child tax credit payments. The BBB bill is very likely to make these trends and others, like inflation, worse.

Although we’re concerned that people are choosing not to work and agree that more money coming from Washington, DC, will make matters worse, my remarks reflected our concern at GCO about why worklessness harms the individual. Work is not merely about earning money; it has intrinsic value.

 

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Championing a return to normalcy and healthy social interaction

Work provides each of us with an outlet for our God-given talents and creativity. It allows us to serve others and contribute to other individuals’ well-being in exchange for having our own needs met. More than that, it provides us with social capital and a network of colleagues and friends who can help us when we need it. Much research has also shown that worklessness leads to poor mental and physical health and can contribute to increased drug and alcohol abuse – the 100,000+ overdose deaths during the pandemic representing the latest example.

As our government wrestles with how to deal with the pandemic and sets its priorities, it should avoid anything that discourages employment and causes more isolation. For individual and societal health on every front, the government should be championing a return to normalcy and healthy social interaction – including at work – that allows the American people to be resilient during times of crisis.

Can Cash Payments Help Atlanta’s Poor? | AJC

Can Cash Payments Help Atlanta’s Poor? | AJC

by | Nov 22, 2021

In The News

Can Cash Payments Help Atlanta’s Poor? | AJC

Almost three years ago, a simple yet radical experiment was begun in Stockton, Calif., based on an idea floated by the Rev. Martin Luther King Jr. more than half a century ago.

With no strings attached, 125 low-income residents were given $500 a month for two years.

They spent their money on food, clothes, home goods, auto costs and utilities or saved it as a cushion for emergencies. Many were spurred to find better jobs. Most reported feeling a greater sense of well-being and less anxiety and depression, organizers said…

Buzz Brockway, a former Republican state legislator now at the right-leaning think tank Georgia Center for Opportunity, said he’s open to programs that provide a flexible hand-up for low-income families. But he said such initiatives should be focused on people who are working, actively seeking a job or in a training program.

“We think that what’s important is that people begin to earn their way to self-sufficiency,” he said.

Read the full article here

 

Nicole’s story: How a raise meant losing food stamp benefits for this mom of four

Nicole’s story: How a raise meant losing food stamp benefits for this mom of four

by | Oct 4, 2021

correctional officer

Nicole’s story: How a raise meant losing food stamp benefits for this mom of four

Nicole had high hopes when she moved her family from a rural area in south Georgia to Henry County in the Atlanta metro. The cost of living went up, but the job opportunities were more plentiful and paid much better: She went from making $25,000 a year to over $35,000 as a corrections officer.

But that’s when Nicole got an unpleasant surprise. Her new salary level meant that her safety-net benefits from the government went entirely away—not reduced, but entirely eliminated. She ended up getting around a $10,000 raise but losing approximately $12,500 in benefits.

“I ended up getting kicked off social services because I made a couple dollars more than the max I could,” Nicole shared.

Nicole is 32 years-old and the single mother of four boys. “I’m the only income. I don’t get child support payments or anything else,” she said.

Losing her benefits—particularly food stamps—was a severe blow, especially during the pandemic. Although she has gotten help from local church-based food banks to help her make ends meet, her situation is still stressful.

To further bridge the gap, Nicole is working as much overtime as possible. But she would need to earn significantly more—to the tune of $25 an hour—in order to fully make up for the benefits she has lost. Even in an economy where wages are quickly rising for many workers, that raise level is a tough haul.

 

What needs to change?

Nicole encountered what we call the “benefit cliff,” where well-intentioned policies actually prevent people from getting off public services. They make just enough to lose their benefits, but not enough to make up for those lost benefits. The result is a system that keeps people trapped in poverty rather than one that propels them toward self-sufficiency and the dignity that comes with it.

While it is wonderful to see how the community has stepped up to help Nicole fill the gaps left from her losing access to food stamps, not everyone is so fortunate.

So, what’s the best pathway forward? Our goals should be to shore up the safety net for those who truly need it, eliminate these benefit cliffs, and create a system that encourages (rather than discourages) people from climbing the economic ladder. Along these lines, here are three possible ways forward:

 

  • The food stamp program could be fully redesigned to eliminate the benefit cliffs.

 

  • Separate pools of funds (from public, private, and charitable resources) could be set up as temporary stop-gap measures to get people like Nicole beyond the cliff.

 

  • Nicole could work with someone who understands the cliffs to help her strategize a career and pay progression to effectively jump over the cliff.

 

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

#DareToClimb media campaign

This is why the Georgia Center for Opportunity (GCO) recently launched the #DareToClimb media campaign. The campaign is designed to raise awareness and share stories of those trapped in government assistance programs that, while well-intentioned, are structured in a way that often does more harm than good. GCO believes it is important to share the stories of these courageous men and women who have overcome obstacles in their lives to achieve self-sufficiency.

To learn more, follow the #DareToClimb hashtag.

** The $35,000 income limit is based on Nicole’s interview with us. Although our calculations show it will be somewhat higher, the impact and stress she is experiencing will be the same.