The city of Los Angeles just released a report on the city’s BIG:LEAP program. That’s the acronym for the “Basic Income Guaranteed: Los Angeles Economic Assistance Pilot” program.
The 2021 program provided $1,000 per month in unconditional cash payments for 12 months to households living in deep poverty within the City of Los Angeles. To qualify, Angelenos were required to be at least 18 years old, have at least one dependent child within the household or be expecting a child, be negatively impacted by COVID-19, and fall below the federal poverty threshold. The program, funded with public money, was limited to 3,200 households. Fifty thousand people applied for it.
Taxpayers and free market advocates should be on alert whenever they hear the words “Basic Income” or “Guaranteed Income” being advanced in public policy discussions. It is also critical that citizens know some of the variations of these programs.
The most controversial is “Universal Basic Income.” UBI generally describes those welfare programs that would provide citizens with a regular cash payment, typically monthly or annually, regardless of their work status, income, age, family situation, or other factors. UBI payments would be unconditional, meaning they would not require recipients to work or meet any other means test.
UBI may have superficial attractiveness, but the Reason Foundation just last week published an article entitled Bad News for Universal Basic Income in which researchers found that giving people $1,000 every month for three years resulted in decreased productivity and earnings. Moreover, most UBI programs, such as the experiment in Finland, have failed to deliver on their promises and have been abandoned.
Let’s be clear about L.A.’s BIG:LEAP experiment. It is not a UBI program. That is clear from the description above about who would be eligible. In addition to an age requirement, recipients had to have at least one dependent child, be below the poverty line and meet other criteria.
So does the BIG:LEAP program differ from other welfare programs? That’s a good question. General Assistance or General Relief (GA/GR) programs are designed to provide relief and support to indigent adults who are not supported by their own means, other public funds, or assistance programs. They are administered and funded by each county.
In addition to GR, the county also has programs for Refugee Cash Assistance, Cash Assistance for families with minor children (CalWORKS) and many other programs including CalFresh and housing vouchers. Other counties offer the same programs.
It should be noted that the BIG:LEAP program by the City of Los Angeles is on top of the myriad of county welfare programs. In fact, one could legitimately ask why a municipality is spending taxpayer funds on a county function. Is this little more than bureaucratic mission creep by the City?
Perhaps, but something else may be going on with the effort to rebrand what appears to be a run-of-the-mill welfare program as “guaranteed basic income.” What comes to mind is the term newspeak, coined by George Orwell in his 1949 dystopian novel 1984. Newspeak was a language “designed to diminish the range of thought.” Newspeak was characterized by the elimination or alteration of certain words, the substitution of one word for another, the interchangeability of parts of speech, and the creation of words for political purposes. Like food stamps are now called CalFresh. It just sounds better.
Is this push for “Basic Income” programs such as UBI or “BIG:LEAP” just another effort to label welfare as something with a better sounding name? If so, policy leaders should proceed carefully. Relabeling welfare as something else may be innocuous in and of itself, but if it is designed to layer on more, duplicative programs on top of each other, neither the public interest nor the public treasury would be well served.
Finally, basic income programs come with high costs, not only in the initial price tag, but also indirect costs, including a reduction in the tax base and removing incentives among recipients to seek and engage in work. If basic income is viewed simply as free money or paid leisure, it will likely breed resentment among those who are ineligible because they must now pay an ever-larger share of their earned income in taxes.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.