In 1935, the Social Security Act became law, though its proponents faced great political opposition. In adopting this act, the U.S. government for the first time accepted responsibility for meeting the basic needs of at least some of its people – primarily white men, and incidentally their families.
Thirty years after the Social Security Act became law, another sweeping economic proposal was hotly debated throughout the country: Guaranteed Income. A Guaranteed Income in its ideal form would provide every U.S. citizen with a minimum level of income to cover the basic necessities to live.
When President Lyndon Johnson declared a War on Poverty, there were advisors who advocated the streamlined system of Guaranteed Income as a solution. But more established proponents of a complicated poverty industry won out, and myriad bureaucracies were subsequently created to address and oversee, but not solve, the problem of poverty. Federal money was transferred to states to administer welfare institutions, which some say became a feeding trough for the middle class more than an income transfer to the poor.
Eventually, President Johnson, and after him, President Richard Nixon, saw the need for a federal Guaranteed Income. George McGovern had also proposed a form of Guaranteed Income as part of his campaign platform in his 1972 bid for the presidency.
President Nixon came up with a proposal called the Family Assistance Plan, which he introduced to Congress. FAP would have largely replaced the welfare system by extending a form of social security to those falling through the cracks due to unemployment or child-rearing responsibilities. The FAP would also have supplemented those who were working at jobs but not making quite enough to stay afloat. Conservative economist Milton Friedman proposed the “negative income tax” as a way to administer such a plan.
Welfare activists objected to the FAP’s suggested level of income as too low, arguing that the plan would not entirely lift people out of poverty. More powerful opponents said that people would lose motivation to work if any alternative income were freely available to them. There was also powerful political opposition from established Democrats due to the threat the FAP posed to the many entrenched bureaucracies overseeing and administering to the poor. Most of these bureaucracies would have been rendered unnecessary if people had direct access to sufficient income to live decently.
The important principles behind FAP – economic efficiency and social justice – eventually fell by the wayside, while the opposition’s counter-proposals of forced work requirements and an increase in government contracts to oversee (but not end) poverty were adopted. The welfare state, rather than direct income for poor people, expanded greatly. So did a stigma for being poor, and the shame for being “dependent,” which contributed to the cycle of poverty.
Ironically, the opposition’s theory that a Guaranteed Income would destroy the incentive to work was shown to be groundless by four long-term studies conducted during the ‘60s and ‘70s. The studies found that making a basic income freely and unconditionally available to working people had mostly positive effects on their decisions regarding work and family.
In each of these studies, two groups of low-income people were followed. One group was given guaranteed income with no strings attached. The other group received no special treatment or benefits beyond what they received in the system as it existed.
The studies found that fathers in the guaranteed income group, most of them in two-parent families, reduced their work hours by 1 to 7 percent, depending on the study. According to some, this slight reduction could be attributed to taking longer in between jobs to find the right one, or to turning down overtime.
Mothers in two-parent families in the guaranteed income group reduced their total wage work from between 17 to 31 percent, depending on the study, compared with the group given no special treatment. Single mothers given guaranteed income reduced their wage work from between 2 and 12 percent.
Perhaps most importantly, women with access to guaranteed income had increased opportunity to leave unwanted or abusive marriages. One of the four studies showed that a greater number of marriages dissolved when people had access to unconditional basic income compared to the group given no alternative income. This study unintentionally underlined the role that poverty and economic coercion has in perpetuating unhappy or abusive marriages.
Today, some of the feminist activists who had advocated a guaranteed income in the past are choosing to focus on winning Caretakers’ Credit for those doing unpaid caretaking of children and dependent adults. The collaborative effort has won $9.2 billion for millions of families with children in the form of a child tax credit. The child tax credit became refundable so that low-income families could benefit from it. Many activists are now trying to increase the level of the credit to reflect the cost of caregiving, and also to shift it from a child tax credit to a caretakers’ credit, so that care for dependent adults is covered, and the focus of the credit is the caretaker, rather than the dependents in need.
– Info from Tyranny of Kindness by Theresa Funiciello (Atlantic Monthly, 1993)
Also visit Caregiver Credit Campaign