ELIMINATE POVERTY

“There is nothing new about poverty. What is new, however, is that we have the
resources to get rid of it.”

—Dr. Martin Luther King, Jr., Nobel Peace Prize
address, 1964

The Causes of Poverty

One of the chief causes of poverty is inequality and marginalization. Catastrophic events like a pandemic only serve to widen that gap. Even states with healthy economies and well-resourced systems have struggled to stay ahead of the virus.

As we’ve seen in Michigan, neighborhoods with the highest rates of COVID-19 cases have also been neighborhoods with lower incomes or marginalized communities—often populated by people whose work in grocery stores, hospitals, or public transportation keeps them interacting with a high number of people in an age of social distancing.

Poverty & COVID-19

Dr. King once said, “There is nothing new about poverty…,” but what is new, is the severe economic impact of the  Coronavirus pandemic and its creation of the nouveau pauvre or— the new poor.

The federal stimulus bill has eased some of the financial stresses caused by the pandemic, but economic experts from the University of Michigan have predicted that the state’s economy will get worse before it gets better.

This means that people who were already on the margins of financial stability, now find themselves in even more dire straits.

Forecast: More people will file unemployment claims

Forty million Americans are now out of work and receiving unemployment benefits. In Michigan, although an unprecedented number of people — 800,000 since March 15, according to the Unemployment Insurance Agency’s latest account — have filed claims, that likely is not a full picture of the people who have been laid off.

Typically, fewer than half of people eligible for unemployment actually file claims. Because of the publicity and widespread impact of the coronavirus
downturn, the economists predicted about 75% of eligible people would file claims now.

They forecast Michigan’s unemployment rate would rise to 23% this quarter.

Source: https://www.lansingstatejournal.com/story/news/2020/04/10/economists-
expect-jaw-dropping-coronavirus-downturn-michigan/5129344002/

Shri’s Anti-Poverty Solutions to Combat Poverty Post-COVID-19:

Tackling poverty in a coronavirus-induced economic downturn is challenging, but not insurmountable because it creates an opportunity to put a bright spotlight on the problem and come up with creative solutions.

The key social components of poverty are: unstable housing, food insecurity, lack of transportation and the trauma caused by them – and they are key reasons health experts say people of color, are being disproportionately sickened by the virus and killed.

Michigan is now in a position to receive funding boosts for proven ways to tackle poverty and improve health. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in March 2020, included $5 billion in community development block grants and $4 billion in assistance to prevent homelessness resulting from the impact of coronavirus. Michigan can tap into such funding.

Developing Policy to End Poverty in Michigan

We know from a scientific point of view what can be done, we know that block grant programs and homeless assistance can work to eradicate poverty and we know those programs can also save society money.

The question is: how do we collectively generate the political will to do those things that could work and could create a more productive workforce for the American economy?

Shri’s Answer

Shri has both the scientific background and the political will to energize the creation of key policy initiatives for a better Michigan. “I’m now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

Dr. Martin Luther King, Jr. | Civil Rights Leader

Michigan Direct Cash Assistance: Guaranteed/Universal Basic Income

Cash meets people’s most urgent needs. Guaranteed unconditional cash assistance in the amount of $500 to $1,000 per month for eligible Michiganders, 18 and older is a possible response to rising inequality and a growing number of American jobs lost to automation and now the COVID-19 pandemic.

Definition of Universal Basic Income:

A universal basic income (UBI) is a guaranteed, no-strings-attached, recurring payment to every member of society, sized to meet basic needs.
It approaches the problem of people not having enough to live on by giving everyone a check equal to the cost of living. In its fullest form, it’s:

 Universal, serving all members of society;
 Basic, enough to cover basic needs; and an
 Income, an unconditional, recurring payment guaranteed for recipients’ lifetimes.

Precedent Already Set in America for Universal Basic Income to Remedy Poverty

Precedent has already been set by the U.S. Senate, which proposed and passed legislation to give middle-income Americans a single, $1,200 payout for each adult, plus $500 for each child in a family. The lowest-income Americans also get less: the plan includes a smaller, $600 payment to adults in some of America’s poorest families. Democratic lawmakers called for Americans to receive larger, recurring cash payments, with at least one plan calling for a monthly check of between $1,000 and $6,000.

The Facebook co-founder Chris Hughes is among the proponents of the policy; the Economic Security Project, which he co-chairs, is helping fund basic income experiments in Stockton, California.

Funding Universal Basic Income in Michigan

Funding could potentially come from existing social safety net programs, by repurposing existing services and could cost less than the combined funding of existing social welfare programs. UBI could also be potentially funded through tax revenues i.e. higher pollution taxes, a financial transaction tax, non-profits, casino revenues or an actual “Negative Income Tax.”

Who Pays for Universal Basic Income

The citizens would pay for UBI via government tax revenue. However, many trials of UBI have also been funded by not-for-profit organizations, such as GiveDirectly’s UBI project in Kenya, and some proposals involve distributing the revenues from a shared
resource.

What is the difference between UBI and a Negative Income Tax?

Both a UBI and a negative income tax (NIT) establish a minimum income floor. Under a NIT people who earn less than a “zero-tax threshold” get a cash transfer instead of paying an income tax. This benefit decreases as people earn more. Because an NIT targets the poorest people in society, it’s not universal, but it would provide payments sufficient to meet basic needs.

A UBI funded by a progressive tax rate and a negative income tax can have identical income distribution effects after taxes and government payments, but an NIT would require a smaller gross budget to fund.

Whether an NIT and UBI have similar effects depends on:

 How well Michigan can measure income levels and responds to income changes smoothly.
 How quickly NIT benefit levels decrease as recipients earn more, and how that affects their incentives to earn more.
 Whether structuring a program to be universal instead of focused on the poor changes how it is perceived.

The Bottomline on Direct Cash Payments for Michiganders

Shri’s initiative balances the need in Michigan for both unemployment and direct payments because focusing on just increasing unemployment insurance, would leave out too many people who might not fit the criteria for unemployment, including people doing domestic and caregiving work, freelancers, gig workers, independent contractors, barbers and hairdressers, and Lyft and Uber drivers.

Unconditional direct cash assistance is the type of policy Michigan needs as an antidote to rising economic insecurity in our state to ensure that unconditional cash can supplement, rather than replace, the existing social safety nets.

Source: https://www.givedirectly.org/basic-income/

Source: https://www.theguardian.com/us-news/2020/mar/21/universal-basic-income-michael-tubbs-stockton-coronavirus

Source: https://www.sacbee.com/opinion/op-ed/article240937086.html

Source: https://www.lansingstatejournal.com/story/news/2020/04/10/economists-expect-jaw-dropping-coronavirus-downturn-michigan/5129344002/

“There is nothing new about poverty. What is new, however, is that we have the
resources to get rid of it.”

—Dr. Martin Luther King, Jr., Nobel Peace Prize
address, 1964

The Causes of Poverty

One of the chief causes of poverty is inequality and marginalization. Catastrophic events like a pandemic only serve to widen that gap. Even states with healthy economies and well-resourced systems have struggled to stay ahead of the virus.

As we’ve seen in Michigan, neighborhoods with the highest rates of COVID-19 cases have also been neighborhoods with lower incomes or marginalized communities—often populated by people whose work in grocery stores, hospitals, or public transportation keeps them interacting with a high number of people in an age of social distancing.

Poverty & COVID-19

Dr. King once said, “There is nothing new about poverty…,” but what is new, is the severe economic impact of the  Coronavirus pandemic and its creation of the nouveau pauvre or— the new poor.

The federal stimulus bill has eased some of the financial stresses caused by the pandemic, but economic experts from the University of Michigan have predicted that the state’s economy will get worse before it gets better.

This means that people who were already on the margins of financial stability, now find themselves in even more dire straits.

Forecast: More people will file unemployment claims

Forty million Americans are now out of work and receiving unemployment benefits. In Michigan, although an unprecedented number of people — 800,000 since March 15, according to the Unemployment Insurance Agency’s latest account — have filed claims, that likely is not a full picture of the people who have been laid off.

Typically, fewer than half of people eligible for unemployment actually file claims. Because of the publicity and widespread impact of the coronavirus
downturn, the economists predicted about 75% of eligible people would file claims now.

They forecast Michigan’s unemployment rate would rise to 23% this quarter.

Source: https://www.lansingstatejournal.com/story/news/2020/04/10/economists-
expect-jaw-dropping-coronavirus-downturn-michigan/5129344002/

Shri’s Anti-Poverty Solutions to Combat Poverty Post-COVID-19:

Tackling poverty in a coronavirus-induced economic downturn is challenging, but not insurmountable because it creates an opportunity to put a bright spotlight on the problem and come up with creative solutions.

The key social components of poverty are: unstable housing, food insecurity, lack of transportation and the trauma caused by them – and they are key reasons health experts say people of color, are being disproportionately sickened by the virus and killed.

Michigan is now in a position to receive funding boosts for proven ways to tackle poverty and improve health. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in March 2020, included $5 billion in community development block grants and $4 billion in assistance to prevent homelessness resulting from the impact of coronavirus. Michigan can tap into such funding.

Developing Policy to End Poverty in Michigan

We know from a scientific point of view what can be done, we know that block grant programs and homeless assistance can work to eradicate poverty and we know those programs can also save society money.

The question is: how do we collectively generate the political will to do those things that could work and could create a more productive workforce for the American economy?

Shri’s Answer

Shri has both the scientific background and the political will to energize the creation of key policy initiatives for a better Michigan. “I’m now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

Dr. Martin Luther King, Jr. | Civil Rights Leader

Michigan Direct Cash Assistance: Guaranteed/Universal Basic Income

Cash meets people’s most urgent needs. Guaranteed unconditional cash assistance in the amount of $500 to $1,000 per month for eligible Michiganders, 18 and older is a possible response to rising inequality and a growing number of American jobs lost to automation and now the COVID-19 pandemic.

Definition of Universal Basic Income:

A universal basic income (UBI) is a guaranteed, no-strings-attached, recurring payment to every member of society, sized to meet basic needs.
It approaches the problem of people not having enough to live on by giving everyone a check equal to the cost of living. In its fullest form, it’s:

 Universal, serving all members of society;
 Basic, enough to cover basic needs; and an
 Income, an unconditional, recurring payment guaranteed for recipients’ lifetimes.

Precedent Already Set in America for Universal Basic Income to Remedy Poverty

Precedent has already been set by the U.S. Senate, which proposed and passed legislation to give middle-income Americans a single, $1,200 payout for each adult, plus $500 for each child in a family. The lowest-income Americans also get less: the plan includes a smaller, $600 payment to adults in some of America’s poorest families. Democratic lawmakers called for Americans to receive larger, recurring cash payments, with at least one plan calling for a monthly check of between $1,000 and $6,000.

The Facebook co-founder Chris Hughes is among the proponents of the policy; the Economic Security Project, which he co-chairs, is helping fund basic income experiments in Stockton, California.

Funding Universal Basic Income in Michigan

Funding could potentially come from existing social safety net programs, by repurposing existing services and could cost less than the combined funding of existing social welfare programs. UBI could also be potentially funded through tax revenues i.e. higher pollution taxes, a financial transaction tax, non-profits, casino revenues or an actual “Negative Income Tax.”

Who Pays for Universal Basic Income

The citizens would pay for UBI via government tax revenue. However, many trials of UBI have also been funded by not-for-profit organizations, such as GiveDirectly’s UBI project in Kenya, and some proposals involve distributing the revenues from a shared
resource.

What is the difference between UBI and a Negative Income Tax?

Both a UBI and a negative income tax (NIT) establish a minimum income floor. Under a NIT people who earn less than a “zero-tax threshold” get a cash transfer instead of paying an income tax. This benefit decreases as people earn more. Because an NIT targets the poorest people in society, it’s not universal, but it would provide payments sufficient to meet basic needs.

A UBI funded by a progressive tax rate and a negative income tax can have identical income distribution effects after taxes and government payments, but an NIT would require a smaller gross budget to fund.

Whether an NIT and UBI have similar effects depends on:

 How well Michigan can measure income levels and responds to income changes smoothly.
 How quickly NIT benefit levels decrease as recipients earn more, and how that affects their incentives to earn more.
 Whether structuring a program to be universal instead of focused on the poor changes how it is perceived.

The Bottomline on Direct Cash Payments for Michiganders

Shri’s initiative balances the need in Michigan for both unemployment and direct payments because focusing on just increasing unemployment insurance, would leave out too many people who might not fit the criteria for unemployment, including people doing domestic and caregiving work, freelancers, gig workers, independent contractors, barbers and hairdressers, and Lyft and Uber drivers.

Unconditional direct cash assistance is the type of policy Michigan needs as an antidote to rising economic insecurity in our state to ensure that unconditional cash can supplement, rather than replace, the existing social safety nets.

Source: https://www.givedirectly.org/basic-income/

Source: https://www.theguardian.com/us-news/2020/mar/21/universal-basic-income-michael-tubbs-stockton-coronavirus

Source: https://www.sacbee.com/opinion/op-ed/article240937086.html

Source: https://www.lansingstatejournal.com/story/news/2020/04/10/economists-expect-jaw-dropping-coronavirus-downturn-michigan/5129344002/

shri thanedar

SHRI THANEDAR FOR STATE REP

Use Your Power. Join Our Movement.

SHRI THANEDAR FOR STATE REP

Use Your Power. Join Our Movement.