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Ending Hunger, Homelessness, and Poverty

by Steven Shafarman

It sounds like a utopian fantasy, saying we can end hunger, homelessness, and poverty. No mainstream politician talks about that. Many did, however, in the 1960s and 70s, when Democrats and Republicans called for "guaranteed income" or a "negative income tax," cash payments to the poorest Americans.

Today, the nonprofit Citizen Policies Institute is working to revive those ideas in a simpler, more feasible form. "Citizen Policies" would guarantee every adult citizen enough income to ensure basic food and shelter; in return, every adult citizen would be expected to donate a few hours each month to the community through volunteer work. The guaranteed income would be just enough money to cover basic needs, not enough to undermine people's incentive to work, earn, save, and invest. Welfare and many other government services would become obsolete, and the savings would largely pay for the program. The result would be a baseline of economic justice, equality, and security.

We're often told that this won't work or can't be done because some people will waste or misuse the money—for example by buying drugs or alcohol. It makes more sense, many say, to provide jobs or increase wages.

Though people are quick to challenge the unfamiliar proposals, they rarely question the conventional wisdom. Let's examine what it means to provide jobs and raise the minimum wage. Then we'll consider the logic of directly providing income instead.

Providing Jobs

Providing, creating, or protecting jobs is an explicit goal of many government programs and practices. Politicians brag about how many jobs they will create or have created. Members of Congress reflexively resist any reforms that might mean fewer jobs in their home states or districts. One consequence is that our military is bloated with bases the Pentagon doesn't want and weapons it cannot use. Fiscal prudence is routinely trumped by the jobs card.

At the federal level, government efforts to create jobs began with Franklin Roosevelt's New Deal assertion that government should be "the employer of last resort." For the next few decades, government created jobs by building schools, libraries, community centers, and other infrastructure. But in the 1980s our electorate decided that government should be small and lean, should not create jobs directly but indirectly-by promoting private enterprises through tax breaks, subsidies, enterprise zones, privatization, and deregulation. Counting federal, state, and local outlays, such programs cost us taxpayers up to half a trillion dollars every year. When it's in someone else's congressional district, it's "corporate welfare"; when it's just down the street, it's "economic development."

Yet the political imperative to create jobs indirectly is inherently problematic. After all, much of that money does not pay workers' wages but goes instead to executive bonuses, shareholder profits, and lobbying for more corporate welfare. More important, for employers, creating jobs can never be a goal; profits must come first, and often require the "consolidation" (elimination) of jobs. A company's stock price usually rises when layoffs are announced.

Government policies that offer incentives to private enterprises that promise to create jobs also give the recipients considerable power to exploit government. Examples of such exploitation are common. News accounts of a large employer relocating—or deciding not to—often contain some mention of the tax breaks or subsidies the employer is receiving from the state or local government. And there have been many instances of government jurisdictions openly bidding against each other for some major manufacturer or retailer. Investigative reporters Donald H. Barlett and James P. Steel, in a Time series on "Corporate Welfare," cite cases where "a million dollars in corporate welfare may add one or two jobs."

It gets worse. The perceived need to create jobs often overshadows questions about the quality of jobs created. Dead-end jobs that pay minimum wages are not something to be celebrated; nor are jobs that impart no portable skills or that might be transferred to, say, China or Mexico next week. People who tout the success of the 1996 welfare law rely on quantitative measures—the number of people receiving benefits or dropped from the rolls—with little or no qualitative analysis. In many states, welfare benefits are contingent on accepting whatever work might be offered. Under Wisconsin's privatized system, recipients are sometimes "employed" by contract service providers in menial jobs such as filing papers, sweeping floors, or sorting metal hangers. A Wisconsin-based advocacy group, Welfare Warriors, calls this "wage slavery."

Those who advocate jobs as a policy instrument to reduce hunger and homelessness have a lot of work to do. They should demand that jobs funded with public money be monitored for type and quality. They have to require accountability, with fines and penalties for subsidized employers that fail to deliver. They might insist that government funds only go to creating jobs that provide public benefits, such as rebuilding schools and communities. And they ought to openly defend the logic of giving welfare to corporations but not to individuals.

Raising Wages

During the 1996 presidential campaign, Bill Clinton boasted about how many jobs were created in his first term, and Bob Dole quipped about someone who had three of them. Dole was probably not the first to use that line, which has since been repeated by many other candidates and expresses a serious truth: Workers cannot support themselves and their families with minimum wage or part-time jobs. The minimum wage was last increased in 1997 to $5.15 an hour. In terms of real purchasing power, however, if compared with its level in 1968 it should be $8.15, according to economist Robert Pollin of the University of Massachusetts.

Many people seeking to end hunger and homelessness are focusing on campaigns for a living wage. In New Orleans, in February 2002, 63 percent of voters approved a referendum to increase the minimum wage to $6.15. That will now go to the courts. Opponents include the New Orleans Chamber of Commerce and the Small Business Coalition to Save Jobs. If forced to pay more than the minimum, they say, employers will reduce hiring, go out of business, or relocate out of the affected jurisdiction, with a net loss of jobs for low-wage workers. More ideological opponents simply reject minimum wage laws as government interference in the market.

Living wage laws have been passed in many cities around the country since 1994, but those gains are often threatened. In 2000, Santa Monica, CA, enacted a living wage of $10.50 an hour for large employers in the tourist district. A referendum to repeal it will be on the ballot in November. Employers are always trying to cut costs, especially during a recession. And employer associations are usually well funded and politically influential. If your children are uninsured and malnourished today, a living wage campaign doesn't offer much comfort.

Ensuring Income

Whatever happens with efforts to provide jobs or living wages, there will always be some people who cannot work or simply don't. In the absence of government support, they depend on families, friends, or charities for subsistence. Social Darwinists and other moralists may believe the homeless are unfit and undeserving, but such views are contrary to religious traditions. Some income support is necessary in the name of decency as well as in the practical interests of society at large.

Social Security helps many disabled persons and survivors of deceased workers. And there is the federal earned income tax credit for low income taxpayers. The E.I.T.C. is inadequate, however, because it's linked to earnings and goes mostly to families, not single workers. The fact that it's complicated and embedded in the tax code makes it hard to mobilize support for any expansion of it. And the flat tax favored by many conservatives would eliminate it, perhaps intentionally.

Supporters of some type of guaranteed income have included F. A. Hayek and Milton Friedman, Nobel laureate economists and revered conservative thinkers, and Peter Drucker, renowned as the founder of management science. In The New Society, Drucker argued that attempts to guarantee jobs or wages "do only harm to the worker and the economy" because they "give the worker the illusion of security which is bound to be cruelly disappointed" during any business setback or recession while "subsidizing obsolescent industries and restricting, if not stopping, technological progress." Instead, he called for a minimum guaranteed income that varies with changing economic conditions.

It would enhance freedom and security for everyone, Hayek claimed in The Road to Serfdom, if people are ensured "some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work." This is "no privilege but a legitimate object of desire."

Friedman proposed a negative income tax as the best and most efficient way to help the poor. In Capitalism and Freedom, he contrasted that with minimum wage laws or job programs:

The advantages of this arrangement are clear. It is directed specifically at the problem of poverty. It gives help in the form most useful to the individual, namely, cash. It is general and could be substituted for the host of special measures now in effect. It makes explicit the cost borne by society. It operates outside the market.

In the 60s, most Americans supported the idea of guaranteed income, according to Gallup and Harris polls, as did the New York Times, Washington Post, and other major newspapers. Martin Luther King Jr. called for it in his last book, Where Do We Go From Here?. Leading economists, including James Tobin, Paul Samuelson, and John Kenneth Galbraith, published articles and a letter signed by over 1,200 colleagues that called on Congress to adopt "a national system of income guarantees and supplements." Richard Nixon and George McGovern were among the political proponents.

Nixon's guaranteed income plan was passed by the House of Representatives-easily, with 2/3 of the vote. After it was defeated in the Senate Finance Committee, Daniel Patrick Moynihan, who wrote the bill, analyzed the debates about it in The Politics of a Guaranteed Income. The defeat, he concluded, was engineered by conservatives who cut the amounts and increased the restrictions so much that liberals voted against it. Mostly, he blamed shortsightedness and lack of political vision and courage. Those are still the main obstacles to progress.

Citizen Policies would benefit everyone and could attract broad political support, if we can overcome our knee-jerk objections. An amount of $400—$800 a month would eliminate hunger and homelessness—or the fear of hunger and homelessness that comes with job insecurity—but would not be enough for most people to live comfortably without earning money in the workforce. States or cities where the cost of living is high could supplement the national guarantee from local revenues.

When every adult citizen has that basic economic security, there will no longer be any rationale for corporate welfare. People can find or create their own jobs-perhaps by starting small businesses, a vital engine of economic growth. For workers, that economic security will make it easier to demand living wages and better conditions. It would, in effect, give every American worker a strike fund. And when workers' economic security is not so completely dependent on their jobs, more may choose to work part-time or flexible hours; employers will find it easier to adapt, innovate, and compete.

Why give money to the rich? Because not doing so would require some sort of means testing and would involve perpetual struggles about how and where to draw the lines, as well as massive bureaucracy to enforce those lines once drawn. Those cost would be greater than any potential savings. Besides, many people who appear to be well-off are experiencing economic insecurity. It's much simpler to give the basic income, the "citizen dividend" to everyone and tax it back from those who really don't need it.

The money won't come from any one source in a federal budget layered with fat, but it's easy to see that a significant percentage of the funds can come from eliminating corporate welfare. Many welfare programs for individuals can also be cut, including federal and state agencies that provide housing-government services that would no longer be needed.

The constitutional basis for all job, wage, and income supports is the mandate to "promote the general welfare." Citizen Policies will do that directly, reliably, and efficiently. Then we can cut all programs that support only the special welfare of particular individuals, groups, businesses, or industries.

Universal Service

A common concern about any type of welfare, especially guaranteed income, is the lack of reciprocity. Recipient's should earn the money, some insist. In return for our guarantee of economic security, each of us could perform, say, eight hours a month of community service. Many Americans already do so, but many people who are "working poor" or supporting a family cannot afford the time. The "citizen dividend" of guaranteed income would, in effect, buy back a portion of every worker's time—it would make universal service possible. The two components of Citizen Policies—guaranteed income and universal service—are mutually enabling.

It will not be necessary to monitor or enforce citizen service through some government agency. The pressure of social expectations can do the same job for free, and because everyone will be receiving citizen dividends, the pressure to serve will be enormous. Employers will ask about it in job interviews. Journalists will ask celebrities how they serve. Priests, preachers, rabbis, and imams will use it as a subject for sermons. A few people will shirk their social obligations, but only a few; would you refuse to do citizen service? Do you think your friends and neighbors would?

Calling for universal service seems especially sensible, appropriate, even conservative in the aftermath of September 11th. President Bush wants every American to give 4,000 hours over our lifetimes, and he and others are calling for some new or expanded government bureaucracy to implement and oversee that. Citizen Policies would be far simpler and cheaper than any of those proposals. And every American serving eight hours a month will do much more to unify and secure our nation from threats and unexpected calamities.

Citizen Policies will remind every citizen each month that we are all stakeholders, benefiting from and contributing to the community. As Martin Luther King Jr. wrote:

[A] host of positive psychological changes inevitably will result from widespread economic security. The dignity of the individual will flourish when the decisions concerning his life are in his own hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement.

For many, seeking self-improvement might involve improving our schools, neighborhoods, and local political practices. By providing a baseline of justice and equality, Citizen Policies will put everyone on the political playing field. People will be more likely to vote and participate in our democracy.

And what about people who waste or misuse their citizen dividends, who spend the money on drugs or alcohol, or spend their time in unproductive pursuits? Some people, rich and poor, will do so-as they do today. But each will have enough income for food and shelter, and so be less susceptible to the lures of drug dealing, prostitution, theft, and violence. Anyone concerned about these issues might do community service that helps people who are coping with addiction or mental illness.

Now, a time of economic uncertainty and physical vulnerability, is the ideal time to demand Citizen Policies. Since the early 1970s, on issues involving hunger, homelessness, and poverty, progressives have mostly been playing defense, aiming low for marginal goals as the nation has become more conservative. It's hard to build a mass movement out of efforts to extend the time limit on Temporary Aid to Needy Families.

People across the political spectrum may get excited about Citizen Policies. After all, this is the truly conservative option, the one that will best enable us to reduce government interference in markets and our everyday lives. It is also liberal, in the best sense of the term, recognizing the injustice of any economy that fails to give everybody a decent life. Citizen Policies will not solve all of our problems, but this will at least make it possible for us all to address them, and we've got plenty of work to do. Let's roll.

ÓSteven Shafarman
Citizen Policies Institute
steve@citizenpolicies.org