Universal monthly payments not enough but sends key message against restriction – means-tested comparatively worse - strips dignity and locks in control

[Jhumpa, “Exploring Guaranteed Income Through A Racial And Gender Justice Lens,” Roosevelt Institute, June 2019 https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI_UBI-Racial-Gender-Justice-brief-201906.pdf, accessed June 26, 2023, GDS-LL]

MONTHLY INSTALLMENTS MODEL

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While the universality of the benefit is very attractive to many, the effects of the benefit greatly depend on where a family sits in the economic ladder. For single mothers and families of color who disproportionately live paycheck to paycheck (Bhattacharya and Price 2018) and struggle to make ends meet, a monthly installment allows them to use the cash benefit as a way to pay for basic household costs, such as rent, food, and utilities. It can serve as a buffer in times of income volatility due to circumstances out of their control like a change in shift hours or a cut in pay. It can also provide a sense of agency to low-income families—a feeling often reserved for those in higher income brackets.

An unconditional cash benefit allows people to make the best decisions for themselves and/or their families on how to spend the money, rather than solely suffer through a paternalistic, means-tested public benefit that often strips dignity and aims to control behavior. Unconditional cash gives the message that we actually trust people and doesn’t restrict people’s behavior in the ways that many other public benefit programs do. These gains should not be taken lightly.

However, expecting that these families could use the benefit towards wealth accumulation is a stretch, as the most likely scenario is that the benefit will help people meet a basic standard of living that their current incomes do not allow them to do. Low-income families are battling low wages that do not allow them to meet the actual costs of living, are in jobs that do not pay benefits, and bear the brunt of criminal justice fines and fees. Without addressing these factors, a monthly cash benefit can only go as far as meeting the basic human needs that our government currently fails to guarantee, and it will not help low- income families build wealth.

In comparison, for families that are already able to meet their basic needs, an additional cash benefit affords them the choice to spend the benefit on things like vacations, healthier food, or to put some money towards savings. This allows them to either add to or start some wealth accumulation. Families in this income bracket may be able to breathe a little easier knowing that they have the supplemental income to fall back on in times of an unexpected emergency.

A monthly cash benefit can only go as far as meeting the basic human needs that our government currently fails to guarantee, and it will not help low- income families build wealth.

For higher income families who already have established wealth, the benefit adds to their overall wealth, perhaps exacerbating current wealth inequities even further. Recent proposals to fix the lopsided tax system by taxing the super rich at a higher percentage could be one way to address this concern.