Putting Money Directly in the Hands of the People: A Case Study of the COVID-19 Anti-Poverty Policies and Their Implications in Favor of A Universal Basic Income

Abstract

The concept of a Universal Basic Income is not a novel idea to the 21st century world. The idea has been proposed and put forward for hundreds of years as a way to right the injustices of the economic systems we live under and ultimately work towards the creation of a just society by directly giving people the means to achieve an upward mobility as opposed to hopelessly climbing up a rungless ladder with no assistance other than their own bootstraps. As it is relevant to this thesis, the idea of a UBI that hit mainstream media most recently can be predominantly credited to Andrew Yang, who conducted his 2016 presidential campaign on the platform of providing Americans with a basic income to help overcome socioeconomic inequities and bridge the widening gap in inequality across the United States. Despite garnering budding support from young voters, it was met primarily with disparagement and criticism, arguing that the idea of giving free money as an anti-poverty policy was a socialist program that would be ineffective and create a society of free-riders who shirked off of the hard work of others. That criticism, that providing direct cash transfers would be disastrous as an anti-poverty policy, for it would only reproduce and enable the behaviors that lead to poverty in the first place, has also existed in the United States for hundreds of years and is deep-seated in the American ethos through messaging that simultaneously suggests that people have the means for social mobility at their fingertips and ignores that wealth in the United States was built on free labor. UBI challenges those perceptions by radically proposing that people in poverty be given a sturdy leg up from below the ground, and that they be trusted to exercise their own freedom with their finances. Prior to the COVID-19 pandemic, UBI was often scoffed at, and empirical data from studies on direct cash transfers as an anti-poverty policy that suggested only positive outcomes were largely ignored. That is, until the socioeconomic conditions created by the pandemic obligated a virtual overhaul of the existing anti-poverty policies so as to keep millions of Americans from falling into or falling deeper into poverty. As a result of the pandemic, the federal government passed three landmark stimulus packages, and with respect to the forms of anti-poverty policies that provided individual economic relief, the majority of them provided free-to-use direct cash transfers to a growing number of Americans. Over the course of a year, the federal government spent close to $2 trillion providing nearly-universal, nearly-unconditional direct cash transfers as an anti-poverty policy. Findings from the establishment of these policies illustrated that those policies were widely effective at lifting up and keeping millions of Americans out of poverty. Findings indicate that there were minimal negative employment outcomes, financially smart consumption patterns, and overall improvements in the general health and wellbeing of millions of Americans. This thesis uses the pandemic-era anti-poverty policies and their outcomes as evidence to ultimately recommend that effective anti-poverty policies should manifest in the form of a UBI so as to adequately address the worsening state of poverty in the United States.