Does the Social Safety Net Provide Enough Incentive to Work?
One of the most common criticisms of social safety net programs is that they discourage work. As House Speaker Paul Ryan has put it, they risk becoming a “hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.” ... Read more
How Is Inequality Linked to Climate Change, and What to Do About It?
Progressives see climate change and economic inequality as two of the big problems of our time. As the global aid organization Oxfam points out in a recent media briefing paper, “Extreme Carbon Inequality,” the two are “inextricably linked.” But just what is the nature of the linkage? Does inequality cause climate change? Does climate change ... Read more
Universal Basic Income vs. Unemployment Insurance: Which is the Better Safety Net?
A universal basic income (UBI) and unemployment insurance (UI) are two possible forms of social insurance for an economy in which job loss is a significant risk. Which works better? How generous should either program be? Would a combination of the two be best of all? These are the questions that Alice Fabre, Stéphane Pallage, ... Read more
A Universal Basic Income and Work Incentives. Part 2: Evidence
In Part 1 of this series, I outlined some basic economic theory regarding a universal basic income (UBI) and work incentives. By a UBI, I mean an income support policy that provides a set monthly benefit to every citizen. A UBI, as I define it, would to everyone, regardless of income, wealth, or employment status. ... Read more
A Universal Basic Income and Work Incentives. Part 1: Theory
Everywhere you look, it seems, people are talking about a Universal Basic Income (UBI)—a monthly cash benefit paid to every citizen that would replace the existing means-tested welfare system. Supporters maintain that a UBI would not only provide income support to people in need, but would also increase work incentives. That is because, unlike the ... Read more
How Many Miles Can You Drive on an Hour’s Wages? 100 Years in One Chart
Recently I came across this assertion in a comment box on one of my favorite websites: “The cost to fuel your car has never been higher as a percentage of disposable income.” Really? I know gasoline prices are high, but you just can’t make that assertion without looking at incomes and fuel economy, too. I ... Read more
Does Inherited Wealth Really Help the Economy? A Reply to Greg Mankiw
Writing for the Upshot section of the New York Times, Harvard economist Greg Mankiw has weighed in on the Pikkety debate. He accepts Pikkety’s scenario of ever increasing inequality as at least a “provocative speculation,” if not established fact, but then asks, So what? What is wrong with inequality and inherited wealth? Nothing, says Mankiw. ... Read more
Multiple Jobholders: Another Sign of a Job Market in Crisis?
How many times since the start of the Great Recession have you heard a story like this one, from USA Today? Heather Rolley’s primary occupation is motherhood, but it doesn’t pay the bills. So most days, after she takes her daughter and two sons to school, the 36-year-old divorcee heads to work. Some days it’s ... Read more
A Universal Basic Income: Conservative, Progressive, and Libertarian Perspectives (Part 3 of a Series)
The idea of a universal basic income (UBI) has been getting a lot of attention recently, sparked in part by the Swiss decision to hold a referendum on the idea. A UBI differs from other income support policies in that it provides a cash grant, large enough to meet basic needs of living, to every ... Read more
Could We Afford a Universal Basic Income? (Part 2 of a Series)
This version, revised June 25, 2014, corrects errors in calculating the value of the personal exemption and the size of the Social Security population that were present in the January original. The first post in this series looked at the economic case for a universal basic income (UBI), by which I mean an unconditional grant, ... Read more