The Case for Basic Income for Parents

As automation accelerates, the wealth gap between those who own robots and those replaced by robots will increase dramatically. This may sound like a sci-fi apocalypse scenario, but it’s a vision that’s shared by a growing number of tech executives. Recognizing those challenges, Elon Musk, Bill Gates, and Mark Zuckerberg have publicly thrown their weight behind a policy known as universal basic income, a pre-determined salary from federal or state governments.

Scott Santens, a leading basic income advocate based in New Orleans, has crowdfunded a $1,000 per month basic income of his own via the Patreon platform. Strangers pay him to spend time promoting the idea of a universal basic income online. He believes that UBI programs should be extended to every member of a household, but that they have particular potential when applied to parents.

“The best way to reduce child poverty is to make sure parents are unconditionally given income sufficient to create a home environment with less stress, food of sufficient quality and quantity, and meaningful time with parents and friends,” Santens explains. “If adults got around $12,000 per year and kids got around $4,000 per year, that would effectively end poverty in America as defined by our existing federal poverty guidelines.”

At its core, basic income offers the promise of financial security regardless of shifts in the economy and individual circumstances. When the loss of a parent’s job can so easily threaten the stability of an entire family, it’s easy to see why this idea might appeal to moms and dads.

One of the greatest challenges for kids growing up in poverty is the tension created by uncertainty. Long-term stress drastically affects outcomes, meaning that there is a developmental poor tax levied against the already disadvantaged. A study by Duke University Medical Center found that kids who grow up in financially-stable homes tend to grow into better-adjusted adults. In North Carolina a Cherokee tribe built a casino on their reservation and chose to grant every citizen an equal cut of the profits. Around $6,000 of supplemental income was granted to local families, many of which were living below the poverty line. The research showed that the increased income reduced children’s rates of behavior and psychiatric issues to levels seen among families who were never poor to begin with.

At the University of California, Irvine, research is being undertaken to determine the effects of basic income and other forms of welfare on the development of young children. Greg Duncan, professor of education and head of the research program, believes all it would take to fund a UBI is a few changes to the existing tax system.

“The U.S. now has a child allowance of sorts, spending almost $100 billion annually on the child exemption and Child Tax Credit in our federal income tax system. But those ‘payments’ are annual and not monthly, and are not received by families that pay no taxes,” Duncan explains. “At no additional cost, you could convert those tax breaks into a monthly universal child allowance of nearly $150. Adding another $100 or so billion would bring the monthly allowance into the $250 to $300 range.”

Last week, Hawaii became the first U.S. state to pass a bill supporting the creation of a basic income. The resolution, which states that every person is deserving of a basic income, was unanimously approved by both houses of the State Legislature. Chris Lee, the Hawaii state representative who drafted the bill, says that goal now is to “to analyze our state’s economy and find ways to ensure all families have basic financial security, including an evaluation of different forms of a full or partial universal basic income.”

The main obstacle to implementing basic income schemes–family-focused or not–is that the money has to come from somewhere and that somewhere is typically other welfare programs. In the U.S., there are 79 different programs designed to provide food, housing, medical care and other social services to low-income Americans. On top of the cost of the actual provisions that they provide, each of these programs has to pay for offices full of staff to administer the programs. Simplifying all social security with a single, universal payment could bring administrative costs close to zero, but even then, the entire social security spend of the U.S. isn’t enough to fund a meaningful basic income for every single American or every single American parent.

For parental basic income to take off, the idea will need to prove out on a trial basis and find a larger base of support. That’s unlikely to happen in the next few years, but if automation takes off and experiments yield encouraging results, it may become a politically viable way to level the playing field for American children.