Professor of Economics Hilary Hoynes and UC Berkeley MPP Student ‘20 Sarah Edwards probe whether work is a solid foundation on which to build the welfare of American society. Can and should income from working really provide a stable base for all Americans? And can more universal coverage social safety nets for non-working adults alleviate the stigma of government support?

While welfare reform of the 1990s resulted in spotty coverage from the coupling of assistance and working, the universality of UBI could be an attractive counterproposal to extend coverage to those without it and reduce the stigma of government support. But untargeted programs risk becoming prohibitively expensive or overstretched.

In this episode of Talk Policy to Me, find out why loosening the bind between working and government support opens a new space where new possibilities for policy solutions can come forward.

Tune in to next week’s episode on the specifics of one experiment in Stockton, California.

Speakers featured on this epsiode

Hilary Hoynes is a Professor of Public Policy and Economics and holds the Haas Distinguished Chair in Economic Disparities at the University of California Berkeley where she also co-directs the Berkeley Opportunity Lab. She is a member of the American Academy of Art and Sciences and a Fellow of the Society of Labor Economists. She has served as Co-Editor of the American Economic Review and the American Economic Journal: Economic Policy and is on the editorial board of the American Economic Review: Insights.

Her research focuses on poverty, inequality, food and nutrition programs, and the impacts of government tax and transfer programs on low income families. Current projects include evaluating the effects of access to the social safety net in early life on later life health and human capital outcomes, examining the effects of the Great Recession on poverty, and the role of the safety net in mitigating income losses.

Transcript

Hilary Hoynes [00:00:00] I am not convinced that if I could wave my magic wand that a true UBI would be the right thing for the United States. It's too expensive, it's too untargeted. But I very much think that we need to provide more support and stability for out of work episodes.

Sarah Edwards [00:00:20] The idea of universal basic income is increasingly getting attention today. It's held up as the solution to advanced technology taking jobs, as a way to solve an imperfect social safety net, as a way to create a more inclusive society. Folks from all different perspectives are thinking about the ways that a universal basic income, or UBI could solve the problems of their sector. But what actually is it, and what can it really do? I'm Sarah Edwards and this is Talk Policy to Me. Let's talk universal basic income. Today we turn to our resident expert on social safety nets and universal basic income to get the scoop.

Hilary Hoynes [00:01:20] Hi I'm Hilary Hoynes, professor of economics and public policy here at the Goldman School of Public Policy, and I also hold the Haas Distinguished Chair in Economic Disparities here at UC Berkeley.

Sarah Edwards [00:01:34] So you just published a study on the different forms of universal basic income. Can you help us understand what is a UBI, and what is not, and what that spectrum really looks like?

Hilary Hoynes [00:01:48] Yeah well let's let's break it down. I think really an interesting thing. So I recently put together this paper with my colleague and fellow GSPP peer Jesse Rothstein and one of the things that got us really interested in diving into this issue was our observation that people use the term UBI, universal basic income, in many different contexts. And so that was really one of the hooks that brought us in to thinking about this problem was what is a UBI. How does that differ from how people use the term and how critically important is that for public policies. Let's take UBI and break it up. I think the best way to think about it is U, B, and I. So universal I think is probably the critical element in the way that we think about this and so many many elements of our social safety net are targeted and we can talk about that. By contrast, the notion of a UBI in its pure form is that it's universal. And I think there are two key elements to what is typically meant by universality. One is everybody is eligible regardless of whether you have children don't have children are elderly or disabled or able bodied. So that's one dimension of universality something we might call demographic universality. And as a side note we can come back to it many slash most of the elements of our social safety net are targeted on particular demographic groups. The second element of universality and the one that that I think is particularly critical is the notion that regardless of your income or means you will have access to this benefit. So that would be true if you earned five thousand dollars a year, zero dollars, or one hundred thousand dollars, or a million dollars. So that's universality.

 [00:03:44] The second element is basic and I think what most people interpret basic to mean is in some ways it's not just a small payment but it's a payment that you would think would be sufficient to meet some needs. And so that's a critical element that as you might imagine is very important for determining what the cost of the program is. So that's basic, and income is you know that this is a cash disbursement rather than the many other ways that we can disperse social safety net benefits. And in point of fact, most of the growth of the social safety net in the U.S. has been taken over by non-cash benefits through health care food assistance and so on. So that's that's that's a universal basic income.

Sarah Edwards [00:04:34] Okay wonderful. So you talk about how there's really been a surge of interest in this UBI concept. What would you attribute that to?

Hilary Hoynes [00:04:45] I think that there's at least two corners of interest in UBI. And it's interesting that it draws in people from you know perhaps more right in the spectrum and and very progressive ideas. And so to take those one at a time, I think that the interest from the right is a bit of a more long standing interest in pointing out that our social safety net is a patchwork of programs serving different people for different needs. And this patchwork is inefficient, ineffective, creates different kinds of incentives that maybe some of which are unintended. So there's there's a there's a interest advanced most centrally by Charles Murray that we would be better off to eliminate the existing social safety net and replace it by something much simpler, transparent, universal. And so that's one element and I would say that that's not a new view. That's a view that has been around for for some time. What what seems to be more new on the spectrum of interest in the UBI I think very much comes from this growing concern about wage stagnation, income stagnation, the decline of jobs, and as Annie Lowrey calls it in her forthcoming book, the robot apocalypse. So I think that there's an interesting combination of interest from from two different perspectives. I think what's mostly new is the perspective coming from concerns about the future of work and whether or not we'll be able to rely as a society on work as a basic form of income.

Sarah Edwards [00:06:44] Let's make sure that we're all on the same page when it comes to the social safety net. When we're talking about the social safety net today that includes a diverse range of programs. That's food stamps, or Cal Fresh, health benefits, like Medicaid and Medicare, Social Security, and the somewhat less well known Earned Income Tax Credit or EITC. For many of these programs there's an inherent value judgment that ties the program closely to work especially following the 1996 Welfare Reform Act. The idea is that we need to make sure we're not quote unquote discouraging people from working by giving them these benefits. There's a whole history here that's steeped in racism, classism, and deeply problematic judgments, and in some ways the idea of the UBI has been put forward as a way to step away from these judgments. Given that, it's really interesting to hear of UBI as being put forward as a replacement to the social safety nets. Not from a liberal egalitarian view, but actually by the folks on the right. Thinking about that would just replacing the benefits of the social safety net as it stands today actually count as a UBI?

Hilary Hoynes [00:08:19] While as would not be surprising to your public policy listeners, the devil's in the details. The real question is how would this be implemented. But let's start with thinking about what would happen if we were to eliminate the current social safety net and replace it with what I mentioned before as the very quote pure form of a UBI that we talked about earlier. First of all, what would that cost and and and how would this kind of pure UBI compare to the cost of our total social safety net? If you look at our government tax and transfer programs and be very inclusive, everything from programs for the elderly, Social Security, Medicare, which of course are by far the most expensive elements, and then look at programs that are more targeted at lower or modest income individuals like Medicaid ny far being the largest, food stamps and so on. If you take that all together you get something around over two trillion dollars.

Sarah Edwards [00:09:22] Interesting. Walk me through the math on this.

Hilary Hoynes [00:09:25] If you create a UBI that satisfies the features of what we talked about, universal, everybody's eligible, basic, many people use the benefit level of about a thousand dollars per month, that gets you to twelve thousand dollars per year which would essentially reach an individual to the U.S. poverty line. So that's a reasonable thing to think about in terms of meeting the notion of basic or sufficient income. If you do that calculation you get to 3 trillion dollars. So the starting point for thinking about a pure UBI as replacing our social safety net, observation one it's going to cost more than what we have in totality. And I think if you think about it a little bit more it becomes very difficult to think that a UBI could replace health insurance. Very different animal taken place in the context of imperfect markets and incomplete markets and all the problems that that exist in in health insurance markets. So if you take Medicare and Medicaid away, you've got maybe one fifth of cost of a UBI is what's left.

Sarah Edwards [00:10:36] Okay so that puts us as paying a little over a trillion dollars for Medicare, Medicaid, and the Children's Health Insurance Program which is already in our federal budget today, plus an extra three trillion for the fund that's transferred in the UBI. So that's over four trillion dollars total. The obvious next question is how do we pay for that, and who pays for that?

Hilary Hoynes [00:11:09] Number one we'd have to impose taxes to raise a significant amount of money to get to that universal basic income. I mean a large amount, like more than doubling the amount that we're getting currently from personal income taxes. And given the amount of taxes that would be necessary to fund such a program I think you quickly get to the point that you wouldn't be able to pay for the basic income level that would be required. So I think the logical end of replacing our current system with a UBI would be that the levels would be much lower and therefore the funding would be more --you could imagine trying to put together a tax package that could fund it. But then we're in a world where we've replaced a targeted social safety net with one that's un-targeted by its very structure and therefore those in the lowest income deciles will lose a lot.

Sarah Edwards [00:12:08] By the lowest income decile, we're talking about the folks at the lowest end of the spectrum. So to make sure that I have this right. You're actually saying that a truly universal UBI would hurt the people that need the help the most? Is that right?

Hilary Hoynes [00:12:27] So the basic math of putting in a universal basic income and replacing the existing social safety net, the math of it tells you that there's going to be a group, perhaps the most disadvantaged in our society, who would get less. What we would see would be winners and losers because the existing social safety net is more targeted. So individuals who are more sick, individuals with lower income levels in our current system get more benefits than those who are not.

Sarah Edwards [00:13:07] Yikes. That clearly doesn't work in a raw form. Could we think about maybe an adapted UBI? Is there a way to help those who need it most? After the break, Hillary helps us contextualize the current social safety nets and how we might use it to look at UBI, and vice versa.

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Sarah Edwards (Ad) [00:13:42] Talk policy to me is a production of the Goldman School of Public Policy and the Berkeley Institute for the Future of Young Americans. The Goldman school has three different degree programs: a PHD, program a Master's in Public Affairs program, and a Master's in Public Policy Program. Want to join next year's cohort as MPA or MPP students? The application deadline is December 1st.

Sarah Edwards [00:14:17] Welcome back. We're talking with Goldman Professor Hilary Hoynes about universal basic income. We've explored the main components of what UBI is and what the challenges might be with funding such a program, as that's inherently incredibly important to considering it. Before the break Hilary demystified the idea that a truly universal basic income would make those in poverty better off. Now, Here's Hillary on our current social safety net and how it relates to the considerations around modified forms of UBI.

Hilary Hoynes [00:14:57] The other thing that drew Jesse and I into thinking about this project and being excited to dive into it was that both of us have spent a lot of time studying different aspects of the social safety net. I basically spent my whole career trying to understand how government policies and programs particularly for low income families with children. How did they work. What do they do. How do they affect poverty. How do they affect children's life trajectories and so on and so forth. And what was interesting to us and I think this is particularly from the more progressive end of the support for the UBI is a sort of lack of recognition about the basic elements of the social safety net that we have. And so let's let's talk about what those are, what they do, and how a UBI is different than that. So if you start by looking at the social safety net for families with children in the United States the two most important pillars of that social safety net are tax credits, the Earned Income Tax Credit in particular, and the second is food stamps or SNAP or what's called in California Cal Fresh. And the Earned Income Tax Credit which really advanced on the scene in the late 1980s and then again expanded in the in the 1990s is a form of sort of topping up earnings for low earnings individuals. So it's totally a social safety net built around work and really its current form came out of the view that cash welfare programs trapped people in poverty and that what we really needed to do was provide incentives for individuals to move from welfare into work. And the EITC what was the main federal policy to try to help achieve that and to meet the government's end of the bargain that if you work you will not be poor. That was a campaign slogan of Bill Clinton's in the 1990s. And so the EITC essentially supplements your earnings if your earnings are below some level. And it's viewed as highly effective at reducing child poverty whilst encouraging work particularly for single parent households so by almost any measure it's a highly successful program. But it doesn't do anything if you're not able to work. And so one of the things that I think is very productive about the discussion about the UBI is calling attention to the fact that we're not doing much for people who are unable to work. And that's really the byproduct of federal welfare reform in the late 1990s very much shrinking the social safety net around out of work cash assistance.

 [00:18:04] So I think where the universal basic income comes in is recognizing the fact that there's wage stagnation, there's uncertainty in work, there's movement in and out of labor force, and there are implications of that for family stability for children's development and so providing more protection in the times when you're out of work is something that our social safety net is very much missing particularly compared to other countries that tend to provide more assistance of this form. The trade off is when you design a social safety net that's trying to provide protection for people falling out of work for short or longer periods of time, how do you protect against concerns that that helps to to keep folks out of the labor market for longer than might be optimal in some way. And so those are the trade offs and some advance that UBI as a quote solution to that problem because of the universality you're not quote punished by losing the UBI if you transition from out of work into work. So that's the plus. The minus is it's very very expensive to do so and so that in in therein lies the basic tradeoff in the social safety net between a desire to help, the costs of doing that, and the concerns about what economists label as distortions. So changing people's decisions from what might be best.

Sarah Edwards [00:19:50] So that touches on something that I personally find to be one of the most interesting ideas around UBI: decoupling the social judgments around being out of work from the accessibility of any benefit program. In that study you touched on the fact that UBI has been seen as a way to reduce social stigma for the support networks. What have you found on that?

Hilary Hoynes [00:20:22] I think that we think that this is the biggest unanswered question about universal basic income. And I would broaden your excellent question about stigma in one way and that is and we can talk about both of them. I think two aspects of universality that could be quite important that we don't know very much about are number one, stigma. So essentially if you take Social Security and compare society's view of Social Security and recipients of it to food stamps, you get two very different pictures. There's not a lot of demonizing of recipients of Social Security even though it's a highly redistributive system. Lower income Social Security recipients put in a lot less in taxes than they take out in benefits. It's a stealth redistribution program of incredible success that most people, I'm sure your listeners do, but most people don't know how much redistribution takes place in Social Security. You raise taxes. It's a it's a progressive benefit formula. You end up with higher benefits relative to taxes for lower income workers. And the program is very unstigmatized despite the fact that there's there is redistribution taking place. Whereas programs that are very visibly targeted at the poor or near poor like you know food stamps has significant evidence of stigma attached to participation in those programs. And so one of the things that's advanced about the UBI is that it would potentially break that stigma by having a program that's available to everybody. And related to that, is it possible that a program that is more universal from a political economy sense has a more predictable stable political support base that would allow the program to be more effective in the long run because it wouldn't be prone or vulnerable to reforms?

Sarah Edwards [00:22:43] So that's incredibly important. We obviously saw a big shift in the nature of social safety programs under Clinton and the idea that any benefits could actually for once be safe from political pressures would be huge. And removing the stigma might actually increase the number of people whose lives are being benefited by social support programs. Studies have shown that there's a lot of people that could be receiving benefits you know are actually eligible but between the stigma and the challenges to access the system actually don't receive them. But how realistic is that? Would universal basic income actually be able to break the stigma.

Hilary Hoynes [00:23:35] Right now there's discussion about implementing more work requirements in two elements of the social safety net notably Medicaid and food stamps. The view being that welfare reform was so quote unquote successful, we should be doing more of this with other elements of the social safety net. And that comes again from this concern about work disincentives. We can talk about what the research shows about that because there's a lot of evidence on this, but I've long thought that there's children and many families that are sort of held hostage to this debate. And as researchers one thing that we have have only recently been doing and I think is quite important is quantifying the effects of more protection on the life trajectory of children.

Sarah Edwards [00:24:28] You know that's not something that I've immediately thought about when it comes to UBI or to social safety nets. But in zooming out that's really where it would have the biggest impact on changing the nature of intergenerational poverty. In the conversation around universal basic income there's a few examples of versions of UBI or at least natural experiments UBI. How did you really place those within this conversation and context?

Hilary Hoynes [00:25:10] So one really exciting area of research going on right now and it's something that I've been spending a lot of time trying to think about is how does the availability of a bit more income a bit more resources maybe particularly within the lens of children who are kind of, if we step back to this concerns about protection versus distortion and work disincentives, children are sort of caught in the middle. So you asked about what do we know about the the the few existing programs that in some ways are the closest to a UBI and the two that are often advanced is the program in Alaska that essentially takes profits from their oil and distributes it as a grant to their citizens over age 18 I think. And the other is some interesting and really important work coming out of some Native American groups in the southeastern part of the United States who have taken a similar structure of taking the profits from casinos that have been allowed by the state to open up in some areas and some regions, and distributing those profits from the casinos as a demogrant to their members of their Native American groups. And so there's some really important research that looks at those two different kinds of UBI-like programs and the key thing to point out before describing what we know about those is they're not very large. So we talked earlier about what are ways that real UBI eyes can deviate from a pure UBI. And I would say that these two are good examples of programs that are universal. You know other than in the case of Alaska not providing benefits for children they go to all demographic groups and all income levels but no they're not very high. The benefits might vary between 500 and 1000 dollars a year depending on oil prices and et cetera. And that's not very much. So it's really not a sufficient income to live on. And the same is true in the context of the casino profits for the Native American groups.

Sarah Edwards [00:27:49] OK. So we're saying that these are a check in that universal box, but not a check in the basic income box. So basically it's extra cash to these populations. And I imagine there's still a whole set of advantages that might come with that. What have the studies shown there? The most studied issue across these quote natural experiments as well as the many many decades of study of our social safety net is the effects on employment and work. So that's the thing we really know the most about particularly the work in the Native American groups in the southeastern part of the United States. What that has shown us is incredible evidence about the importance of additional income for child development, educational attainment, changes in cognitive and non cognitive skills that show quite dramatic longer term effects of having more income and that sort of finding has also been replicated with other research that looks at at the broader social safety net. So there's a handful of studies that look at the effects of the Earned Income Tax Credit. I've done some work on the food stamp program and all of these studies in some way are trying to quantify what I call the downstream effects of redistribution or the child investment effects of redistribution showing that when there is more income in the household that children have higher human capital as adults, greater educational attainment and greater economic self-sufficiency and in the studies that have looked at it also better health outcomes. So these are the kinds of things that I think we know about the longer term effects of participation in the social safety and are providing more income. But in the context of these two sort of UBI maybe, we should call it UBI-lite in terms of the smaller benefits, it's not a transformative change the way that people talk about the UBI. It's a not a very large benefit.

Sarah Edwards [00:30:15] Interesting. So even if it is a small benefit, maybe it can provide some increase in a way that would actually better the future of a child. But how would we do that on a broad scale, and what would that look like?

 [00:30:37] Next up, we'll dive a little deeper into what adaptations might make a hypothetical UBI work for the country's budget. But don't worry -- a masters degree is not required.

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Sarah Edwards (Ad) [00:30:58] Do you have a question that you want Talk Policy to Me to look at? We're always interested to hear what our listeners think and what areas of policy they want to see unpacked. You can email us at talkpolicy@berkeley.edu with your ideas.

Sarah Edwards [00:31:25] Welcome back. We're here with Goldman Professor Hilary Hoynes and we're about to dive into the mechanics of what might let a UBI actually have a real impact. So heads up, we are going to dip our toes into some economic concepts, but it's actually really helpful to understand where some of the narratives that come up in these conversations are based in, and how UBI has really correctly or incorrectly been put forward as a solution to that. So we talked a little bit earlier about the concerns of this quote unquote disincentive to work that comes up with benefits programs and clearly is present when we see the political pressures tied to social safety nets and work requirements. Again, we really want to acknowledge the way that this conversation both is deeply problematic but also is entirely necessary to understand the political pressures that policymakers face.

 [00:32:33] In the research, have you seen just that it's only a truly universal UBI that doesn't have that disincentive to work?

Hilary Hoynes [00:32:46] You know we haven't talked much about the actual policies that people have proposed and to what extent they relate to the pure UBI. So there aren't that many proposals that have been very explicit but those that have been typically are not universal. They typically are phased out at some level of income. The question is how high up the income distribution do you phase it out and how quickly do you phase it out. Those are the two key parameters. And so again the devil is in the details about how you implement that. So if you phase out a UBI, I mean the basic issue about work disincentives, the amount of disincentiveizing work that a policy generates is essentially a function of how quickly it phased out and the accompanying important parameter is how high is the benefit as in the first place. If it's a low benefit, it doesn't really matter how quickly you phase it out it's not very big.

Sarah Edwards [00:33:53] So you're saying that if we wearing our economists hats are making judgments about if people would or wouldn't work while they're receiving a benefit it really comes down to how much they're getting from the benefit and how quickly they might lose that benefit. Obviously we're making these statements with our own realization that all people have separate forces working in their own lives. Given that how would a successful program be set up to avoid the potential political issues around that work question?

Hilary Hoynes [00:34:30] So let's let's talk about [three] different policies that we can contrast how they would affect decisions about work... [these will] encapsulate two elements of our current safety net and the universal basic income as a third. So let's take the Earned Income Tax Credit. What does what does that look like in a very simple way? If you have no earnings you get no earned income tax credit. If your earnings increase and you have very low earnings levels, so suppose I have two children and I earn less than ten thousand dollars a year, I'm sort of maybe part time minimum wage worker, for every dollar that I earn my earnings are supplemented by 40 cents on the dollar. That's the Earned Income Tax Credit. Once your income gets above fifteen sixteen thousand dollars a year, if I was a person with two children my earning in earned income tax credit would max out at about fifty five hundred dollars a year. So it's that's a big share if you think of a full time minimum wage worker, that's like 40 percent top up of your earnings. Not small. And then eventually you need to phase that out otherwise everybody would get it. And so it's phased out at 20 cents on the dollar. And so once you earn around forty five thousand dollars a year, if you have two children, you're not eligible. So what does that program do to one's quote incentives to work? Well it clearly is going to incentivize work because it doesn't. You get no no benefit if you're not working you get a benefit if you are working so basic labor supply analysis would say that should create an incentive for more people to work. And many many studies have shown that indeed it does just that. With the introduction or expansion of the Earned Income Tax Credit you see more individuals transitioning from out of work to into work. And so an interesting aspect of that is that we reduce poverty not just because we're giving individuals a tax credit but because they're also earning more. And some research that I've done shows that force for single mothers with less than a college degree. About half of the anti-poverty effects of the ITC come through one's increased earnings and about the other half comes through the government expenditure. So that's a very efficient way of reducing poverty. So that's one model we'd call in work assistance. The traditional model for out of work assistance says we want to design a program that has a floor -- establishes a floor below which your income doesn't fall. Very basic feature, kind of the definition of a social safety net. But we want to keep the benefits to be not too expensive. And so we don't want to give this to everybody. We're going to phase this out and focus it on the lowest income individuals. So you typically end up with a program like the old Aid to Families with Dependent Children program which operated in the United States between 1935 and 1996 and the way that program worked is you would get an out of work benefit. It was never very large. The median state had out of work benefit of about three hundred and fifty dollars, if you were say a mother with two children, so not not that big not enough to live on but something. But for every dollar that you earned that benefit would be reduced at sometimes as high as a one to one rate. I earn a dollar, I get one less dollar in benefits. So what does that generate in terms of incentives to work? If I can get the same income from not working as working because if I earn a dollar I lose a dollar of benefits I gain a dollar of earnings, you're not providing much incentive to work. So say you were a Master's in Public Policy student and given a fellowship and you had a fellowship, a stipend, to cover you over your one semester of schooling. But for every dollar of earnings that you had say as a GSI or GSR working on campus your your your fellowship was reduced by dollar for dollar. Would there be much incentive for you to engage in that extra work? Maybe not much. And so what we saw was that sort of response. Individuals would, unless they were able to sort of jump to a higher level of earnings to get beyond the eligibility of the program, there's not much incentive to work. And so that's a second model and that creates larger disincentives to work. So the third model which is the UBI takes as a starting point this desire that you want to create a floor that you don't fall below, but instead of phasing it out you provide that level regardless of whether you have earnings or how higher earnings are. And so you remove a lot of the disincentive by the fact that you're not taking it away. So if you've got the fellowship plus your UBI or your UBI instead of your fellowship then you could work to supplement your UBI and you wouldn't have to lose it. And so that's the sort of third road where you provide the protection but with minimal sort of disincentives to work. There's still a disincentive that comes from giving people income even if you don't phase it out. But it's a lower disincentive than if you give people income and phase it out.

Sarah Edwards [00:40:09] That makes sense from an economic standpoint. Actually I think there's another really essential piece here. Something else that comes up in these conversations I think around incentives to work or not to work with the UBI conversation is that social safety nets that require work for recipients really sometimes can force people to stay in very toxic work environments. Whether that sexual harassment, whether that's swing shifts without control of the hours, for whatever reason it forces people into that corner. Do you think that that UBI or alternative floor could help solve that problem or is that really a Band-Aid to a different set of issues?

Sarah Edwards [00:40:59] I think that you could even zoom out. I think the the points that you raise are really critical and I think you could just assume it out even further to say that individuals are often stuck in jobs that don't take them anywhere that don't create longer run opportunities. But there is no capacity to retrench from that and do some upskilling to find the next thing. So there's many ways in which people might be captive in jobs that don't serve the long run interest. You mentioned of a couple of you know important examples of that and there are there there are potentially many other. So I think that one argument in favor of the UBI is if the funding is high enough to be possible to live on it provides shelter if you will metaphorically financial shelter in order to retrench and figure out what your next best move is.

 [00:42:08] I guess I am less than fully positive on the possibility that the funding levels of any UBI that could be generated would be sufficient to practically provide very much of that. And the other thing I wanted to mention that your comment made me think about in the broader context of would we ever expect to see a UBI is I find it interesting and a little bit confusing that there's. So everything we've been talking about there's so much discussion about the benefits of having something like a UBI and we've talked about that quite a lot and it's very much pushing against the accumulated movement over the last several decades in the United States into having our system of protection built around work. So if there is a compact right now I'm not sure we're even meeting it. But I think that the expectation in the United States is you need to work and we'll try to build a life around that. So the ACA you know expanded health insurance even if you don't have it. The Earned Income Tax Credit tops up your tops up your earnings. All of that is built around work. And what we see right now being advanced out of leadership in Washington is an interest in building in moving our safety net more towards one built on work. So now there's states that are experimenting with building and work requirements for Medicaid health insurance as well as food stamps. So I find it difficult to square the historical move towards social safety net based on work with more momentum coming out of leadership in Washington in that way with this other context of, no, what we really need is to move our social safety net away from work. And the fact that those two things are simultaneously going on is notable.

Sarah Edwards [00:44:31] We've touched on a lot of different aspects of everything related to a universal basic income today and ideal world. If you had the ability to convince those in power to adopt some form of something, what would what would your version of it look like?

 [00:44:51] I am not convinced that if I could wave my magic wand that a true UBI would be the right thing for the United States. It's too expensive it's too untargeted. But I very much think that we need to provide more support and stability for out of work episodes. And I think it's very clear from the research that welfare reform went too far and there's a lot of negative implications of that. So I think what this could generate would be a opportunity to re establish a social safety net outside of work. And if it needs to occur in some new branded way because there's so much lack of confidence in current government policies I think that would be fine. So if we could create a more targeted version of a UBI which is essentially like you know a typical cash transfer program I think that would be an important welfare improving policy in the United States. One thing we haven't talked about is that there's in my mind two or three big holes in our current safety net. One we've talked a lot about, there's not much assistance if you're not working. The second one is there is a demographic group that's really left out in the United States. Our social safety net is as it exists right now is really targeted at three groups: families with children, elderly individuals, and the disabled. And so the big group that's left out are individuals of prime age who don't have children. They get a very very small Earned Income Tax Credit. They're basically very limited in food stamps and so that is the group if you look across the population that is the most literally shut out from our current system of support.

Sarah Edwards [00:47:05] Do you have any thoughts on how we could address that group that is shut out?

Hilary Hoynes [00:47:10] Well I think that the obvious thing to do. The first thing to do is to expand the Earned Income Tax Credit to include them and as a bit of a plug for some work that MDRC has been doing, MDRC which is a evaluation firm based in New York, just last week released the final report on a pilot study that they've done, a randomised control trial for expanding the earned income tax credit to people without children. So they designed an experiment based in New York City and Atlanta that essentially tried to target groups like formerly incarcerated non-resident parents and other people without children and they randomize them into a control group of the existing policies and a treatment group for something they called paycheck plus which was sort of mimicking the scale and shape and size of the federal Earned Income Tax Credit and what those results showed is as we've seen from the research, more work, more employment, more earnings, and lower rates of poverty. So I think that the obvious thing to do is to take the elements of our social safety net that are demonstrated to work and make them on equal access to people regardless of whether they have children or not.

Sarah Edwards [00:48:39] So maybe even if a universal basic income as the structured model won't really work because of the ways that we've outlined today, there's actually still a lot of room to better support the individuals who need it and learn from the different models out there. Speaking about the different models there's actually several different trial projects that have been gaining a lot of attention. Given your understanding of this issue what do you think you would want to see from those projects?

Hilary Hoynes [00:49:14] The most important questions that you'd get answer to would be around employment and earnings and labor market attachment. So I think there's opportunity to to learn some things that I would say are mostly about the effects of of of volatile and uncertain sources of income. But I'm unclear about whether the timeframe that these policies and pilots are oriented around would really be sufficient in order to capture changes in human capital and entrepreneurship.

Sarah Edwards [00:49:51] Interesting. So we're actually going to be talking with the director of one of these trials Lorie Ospina. Stay tuned for next episode where we hear about the UBI trial that's underway in Stockton California.

 [00:50:05] .[Outro music]

 [00:50:17] Talk Policy to Me is a production of UC Berkeley's Goldman School of Public Policy and the Berkeley Institute for the Future of Young Americans. For more on Hillary's work including a link to the paper that she wrote with Jesse Rothstein, see our show notes. Music heard on today's episode is by Pat Mucid Miller and Michael Quiroz. Talk Policy to Me's executive producers are Bora Lee Reed and Sarah Swanbeck. Michael Quiroz is our engineer. Do you like what you hear? Be sure to subscribe on your favorite podcast platform, rate, us and share us with your policy loving friends.

 [00:50:57] I'm Sarah Edwards. See you next time.