A universal basic income study published in November found that paying low-income Americans an average of $492 a month led to a net increase of just $92 in monthly income, and a significant average decrease in non-grant income compared to control groups.
“When the value of cash transfers is included in total household income, treatment households experienced a net increase in monthly income of $92 at the endline survey,” said the study.
[RELATED: Maine City Exploring Universal Basic Income Program, $20/Hour Minimum Wage]
The Massachusetts-based National Bureau of Economic Research (NBER) conducted a study from 2021 to 2023 designed to explore the potential effects of a taxpayer-funded universal basic income, or UBI.
Researchers selected 695 low-income households in Compton, California, to receive payments averaging $492 per month and compared the recipients to a control group of 1,402 households.
Some of the households identified as eligible did not accept the transfers, bringing the average down to $450, when including 28 non-compliant households.
Recipients received transfers of $300 per month for households with no dependents, while households with two or more received $600 per month.
While full-time workers participating in the study generally continued to work as before, participation in the labor market by part-time workers dropped by a significant 13 percent.
“Receiving guaranteed income had no impact on the labor supply of full-time workers, but part-time workers (at baseline) had lower labor market participation by 13 percentage points,” said researchers.
In line with the drop in work-force participation, researchers found an average $333 monthly income reduction in non-grant funds compared to the control group.
“Income (excluding the transfer) was reduced by $333 per month on average
relative to control households, and expenditures were reduced by $302 per month,” said the study.
That drop in pre-grant income negated a large part of the grant, leaving recipients with an average income increase of only $92 from monthly payments that averaged nearly $500.
Researchers also found that, despite the grant, recipients’ expenditures were, on average, $302 per month less than those of the control group.
The NBER claims that the reduction in expenditure by recipients indicates they intended to save the money or use it to reduce their household debt.
“When the value of cash transfers is included in total household income, treatment households experienced a net increase in monthly income of $92 at the endline survey,” said the organization.
Recipients, on average, had a $2,190 reduction in non-housing-related debt, although researchers clarified that this figure is not statistically significant.
Strangely, researchers found “a decrease in direct reports of tobacco expenditures; and an increase in tobacco use.”
Researchers found no significant impact on other secondary outcomes, such as alcohol expenditure and consumption, domestic violence, or volunteer work.
The results may, however, be heavily influenced by the timing of the study, which began during the height of the COVID-19 pandemic lockdowns. These lockdowns were particularly severe in California, where the study took place.
Researchers also pointed out the importance of noting that the study had only a 50 percent response rate.
Some Democrats, such as unsuccessful 2020 Democratic presidential candidate Andrew Yang, have strongly advocated for a taxpayer-funded universal basic income.
Gov-ment math $492 = 92, and all the liberals screamed success!
When Janet sent me my Covid checks.
I bought a new big screen color tv .
A windshield for my snow machine .
And a couple of cases of Fireball and Allen’s .
Can I get some more a.
Thanks Janet …..you’re the best !
NOT
“Universal basic income” does not lead to riches, but poverty, as people will simply stop producing goods and services.
The shaming here in the comments is all the study you need to figure out why people hid their vape purchases.
In a global pandemic, working the most miserable jobs less is a good thing. It will force the employers offering those awful jobs to work harder to attract workers, which may lead them to create accommodations that reduce exposure to the pandemic so more candidates consider their jobs, where before they hadn’t bothered.
It will likely also increase wages. There’s a lot of belief we need prices to go down, but, hundreds of years of economics will tell you prices don’t do that. What you can do is increase wages, and employer competition for fewer workers is one great way to get there.
It seems unlikely the timing of this study says anything more than that – a study peak Covid isn’t exactly applicable to anything else, except maybe what happens if we offer it when Bird Flu picks up.
PFFFFT–$500/month?! ALMOST enough to cover the cost of groceries! What were the recipients supposed to do, start their own businesses? Try paying everyone a UBI as high as what our Fearless Leaders in Congress pay THEMSELVES– we’d jump-start our own local economies. Poverty would completely END, meaning we could hand out pink slips to all the bureaucrats who get paid comfy middle-class salaries to pretend to “help” the poor by maintaining them at the poverty level, for HUGE tax-savings. Plus there would be huge reductions in crime & illness, for way more cost-savings–but our for-private-profit prison-industrial complex & medical-industrial complexes would HATE that.
Andrew Yang’s idea of UBI was only HALF as much as the cost-of-living, meaning that all those tax-sucking tweak-poverty bureaus would still be in place. Seems to me that Yang, a capitalist entrepreneur, was worried about how much he’d have to pay his workers once having to work for somebody else just to survive became a REAL CHOICE.
I know–let’s pay Congress $500/month PLUS Federal Minimum Wage, and force them to LIVE ON THAT, w/out one extra cent from any other source. I bet they’d figure out how to end poverty in a hurry, or at least raise Fed. Min. Wage to a very comfy level indeed.
Nobody gets their panties in a wad if THE RICH spend money on tobacco, or on cocaine or strippers or child-prostitutes or anything else…why the double-standard? Is it because it’s OUR money that the poor are spending? Maybe the real problem here is that US taxation is so regressive. (Why are non-rich ppl having to spend ANY money on taxes in the first place? 2% of Americans own 90% of all US wealth. The 98% barely own ANYTHING. Talk about trying to get blood out of a stone….)
“Jill Herendeen
33 minutes ago
Nobody gets their panties in a wad if THE RICH spend money on tobacco, or on cocaine or strippers or child-prostitutes or anything else…why the double-standard? Is it because it’s OUR money that the poor are spending? Maybe the real problem here is that US taxation is so regressive. (Why are non-rich ppl having to spend ANY money on taxes in the first place? 2% of Americans own 90% of all US wealth. The 98% barely own ANYTHING. Talk about trying to get blood out of a stone….)”
Oh for crying out loud. Because it is my $ that they are spending, and living easier and in some cases better than I am. FYI The top 5% pay 66% of all taxes per the IRS.
As an ex-cigarette smoker (free the last 30 years) I can smell tobacco like a bloodhound. I find the smell nostalgic. When we’re out walking through our Bangor neighborhood I smell pot being smoked far more often than tobacco.
Revealing the real reason they are poor. Hint, it aint whitey’s fault.