This potential “solution” to economic inequality and poverty is nothing more than a wealth re-distribution tactic that places hard-working taxpayers in the crosshairs.
The concept of “Guaranteed Income” or “Universal Basic Income” was introduced to many Iowans by Andrew Yang’s 2020 presidential campaign. Put forth as a potential solution to economic inequality and poverty, its proponents argue that providing a regular cash stipend to citizens can alleviate financial hardship and stimulate local economies. To us, it sounds like the latest and greatest way to engineer wealth re-distribution on top of the numerous social programs and economic safety nets that are already supplied and funded by our state and federal governments. However, at least four local governments in Central Iowa have made substantial commitments to a pilot program that very well may have detrimental consequences that outweigh its perceived benefits.
As property taxes are a top concern of many Iowans, residents of Polk County, and the cities of Des Moines, Urbandale, and Windsor Heights may be particularly interested to learn what their local governments are spending on UpLift, the Central Iowa Basic Income Pilot program.
And this is just a slice of the pie. According to information from the pilot program, a total of 110 participants across many communities in the Des Moines Metro area will receive $500 per month for 24 months for a total payout of $1.32 million. Regardless of who is paying for them, there are several dynamics related to guaranteed income programs that taxpayers should be wary of.
Mission Creep and Tax Bills
Implementing guaranteed income at the city or county level is a prime example of government mission creep. Mission creep occurs when government agencies expand their roles and responsibilities beyond their core functions, often resulting in inefficiencies and increased taxpayer burdens. It goes without saying that money spent on guaranteed income programs is money that can’t be spent elsewhere or returned to the taxpayer. When local governments take on the task of administering these income programs, they may divert resources and attention away from critical services like public safety or maintaining infrastructure. This diversion of resources can lead to a deterioration of essential public services, negatively impacting the overall well-being of citizens.
Entitlement
These programs may further the development of an entitlement society. A new layer of taxpayer-funded subsidies can foster a culture of dependency on government handouts, which can undermine individual motivation and personal responsibility. When citizens receive money with "no strings attached", meaning no requirement to work or contribute to society, it can disincentivize self-reliance and encourage a sense of entitlement. This shift in mindset can be harmful not only for the recipients but also for the overall community.
Workforce
The introduction of guaranteed income programs in light of the persistent workforce challenges since the COVID pandemic is problematic. In recent years, employers have struggled to find labor in various industries, from hospitality to manufacturing to healthcare. Encouraging people to stay out of the workforce by providing a guaranteed income can exacerbate these labor shortages. It disincentivizes people from seeking employment when employers are desperately in need of workers, potentially hindering economic growth and productivity.
While the idea of guaranteed income might appear to be noble, city and county governments funding these programs can have several consequences. These programs can contribute to government mission creep, potentially compromising essential public services while handing taxpayers an even bigger bill, foster an entitlement society, and discourage individuals from seeking employment when it is needed most. Before rushing into guaranteed income initiatives, local governments should carefully weigh the potential drawbacks against the promised benefits.
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