Basic Income is the Wrong Solution for Atlanta’s Poor

by Erik Randolph & Vance Ginn | 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

by Corey Burres | 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.

Could inflation be a persistent problem for the foreseeable future?

by Erik Randolph | Jan 12, 2022

Could inflation be a persistent problem for the foreseeable future?

The CPI is up over 7% over last 12 months

Today, the U.S. Bureau of Labor Statistics announced that in December the Consumer Price Index (CPI) rose 0.5% on a seasonally adjusted basis. The CPI is up 7% over the last 12 months, not seasonally adjusted. That is the largest 12-month increase since 1982.

Georgia Center for Opportunity’s take:

“Pundits are breathing a sigh of relief after the latest CPI numbers landed because they weren’t worse than expected, but optimism may be misplaced,” said Erik Randolph, GCO’s director of research. “The problem is that we’ve established a new floor for prices that likely won’t go down in the coming years. Those impacts are most acutely felt in the areas that hit the pocketbooks of the lower income the hardest, such as food, rent, and energy. Now, it’s more important than ever to avoid pumping more stimulus into the economy that will only worsen the problem. Doing so could make inflation a year-in, year-out persistent problem for the foreseeable future.”

Money Can’t Replace Meaning and Purpose

by Eric Cochling | Dec 15, 2021

Money Can’t Replace Meaning and Purpose

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.

New report details the economic devastation of COVID-19 shutdowns in the 50 states

by Corey Burres | Dec 3, 2021

Can Cash Payments Help Atlanta’s Poor? | AJC

by Corey Burres | Nov 22, 2021

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