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What is Basic Income?

What is Basic Income?

Basic income is a project that would ensure a basic annual salary for everyone. We see evidence that this sort of program works to reduce poverty, through programs like the federal Earned Income Tax Credit, and through social experiments. A common argument against basic income is that giving people money will create a disincentive for them to work. But this is simply not true.

In 2012, the Earned Income Tax Credit redistributed $60 billion dollars from America’s wealthy to the working poor, primarily low-wage working parents. It sounds controversial, doesn’t it? Well, it’s not. In fact, every president, even Reagan, has embraced this federal program since its creation.

Richard Burkhauser, an economist at Cornell and the American Enterprise Institute, says that “this program worked […] And there’s not a hell of a lot of these programs where you can see the tremendous change in the behavior of people in exactly the way that all of us hoped it would happen.”

Burkhauser is not the only economist who believes that giving money to the poor helps alleviate poverty. Milton Friedman, a conservative 20th century economist, also argued that rather than spending money on creating specialized programs for the poor, we should give the poor money and let each person choose what to do with it.

This program has allowed low-wage workers to pay off their debts, relocate to better areas, and receive education among other benefits.

A real-life example of basic income in action is the story of Dauphin, Manitoba. As an experiment, the poorest residents of this Canadian town were given an annual basic income. 5 years later, Dauphin was completely poverty free. Furthermore, their overall health seemed to improve: there were significantly less accidents, injuries, and hospitalizations. The purpose of the project was to analyze whether or not “free money” would create a disincentive for people to work: it didn’t.

For more on the Dauphine story, check out these articles:
http://www.cbc.ca/news/canada/manitoba/1970s-manitoba-poverty-experiment-called-a-success-1.868562
http://www.huffingtonpost.com/2014/12/30/city-eliminated-poverty-mincome_n_6392126.html

For more on the Earned Income Tax Credit:
http://www.npr.org/blogs/money/2013/03/15/174358638/a-surprisingly-uncontroversial-program-that-gives-money-to-poor-people

Photo credit: https://www.flickr.com/photos/ajbatac/7315963368/in/photolist-c9ue2s-kcc9u-8xb6CN-omeFP-pVzSkk-56XP19-pPR7qE-oeTe9c-96oXJx-8siCan-4KaZSG-98PECS-eiRNeZ-9UeD9c-cDYqdd-hJYExe-hj719U-hJZz2b-8JCqdh-5BggiV-bSZsxc-7ahBVn-4oeH3A-q38Lbn-pxyz92-p9PvdY-edPPB3-7gMpw9-9s1tPt-8n7Mis-7amwhj-778bNw-pYkXyJ-9HSpoK-buCpGE-4oeGG5-cpLMxQ-nW2hBr-hjhC8g-6VPhPT-4jPTyW-dKvR5T-aaycNv-gx2GyR-aKvoJT-8hP7VH-8gyghq-tuhNB-aUQNYM-gwmMNB

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