Category Archives: Living Income

Overwhelming Evidence that a Guaranteed Income Will Work

Paul Buchheit | August 29 2016 | Common Dreams

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A giant poster in Geneva reading “What would you do if your income was taken care of?” ahead of Switzerland’s vote on a proposed “basic income” set the Guinness World Record for the largest poster ever printed. (Photo: Fabrice Coffrini/AFP/Getty Images)

We’ll have to do something drastically different to employ people in the future. Our jobs are disappearing. The driverless vehicle is here, destined to eliminate millions of transport and taxi-driving positions. Car manufacturing is being done by 3-D printing. An entire building was erected in Dubai with a 3-D printer. Restaurants are being designed with no waitstaff or busboys, hotels with no desk clerks, bellhops, and porters. Robot teachers are interacting with students in Japan and the UK.

There are plenty of naysayers and skeptics, of course. The Atlantic proclaimed, “The job market defied doomsayers in those earlier times, and according to the most frequently reported jobs numbers, it has so far done the same in our own time.” But this is a different time, with no guarantees of job revolutions, and in fact a time of unprecedented machine intelligence that threatens the livelihoods even of doctors, teachers, accountants, architects, the clergy, consultants, and lawyers.

Most of our new jobs are in service industries, including retail and personal health care and food service. The only one of the eight fastest-growing occupations that pays over $33,000 per year is nursing — and even nursing may give way to Robotic Nurse Assistants. The evidence for downsized jobs keeps accumulating. A US Mayors study found that ‘recovery’ jobs pay 23 percent less than the positions they replaced. The National Employment Law Project estimates that low-wage jobs accounted for 22 percent of job losses but 44 percent of subsequent job gains. Business Insider, Huffington Post, and the Wall Street Journal all concur: the unemployment rate is remaining low because of low-paying jobs.

We’re fooling ourselves by believing in a future with satisfying middle-class jobs for millions of Americans. It’s becoming clear that income should be guaranteed, so that recipients have the wherewithal and incentive and confidence to find productive ways to serve society.

Evidence from Research

Credible research overwhelmingly supports the concept. A World Bank analysis of 19 studies found that cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty…concerns about the use of cash transfers for alcohol and tobacco consumption are unfounded. An MIT/Harvard analysis of seven cash transfer trials found “no systematic evidence that cash transfer programs discourage work.” The Brooks World Poverty Institute found that money transfers to the poor are used primarily for basic needs. Basic Incomes have been shown to lead to reductions in crime and inequality and malnutrition and infant mortality.

Successes in North America

One of the earliest experiments with guaranteed incomes was the “Mincome” (minimum income) program conducted in the town of Dauphin, Manitoba during the 1970s. The results were never made clear, partly because of a change to a more conservative government, which put the program’s records in storage, unevaluated. One study, however, found improved health outcomes for the recipients of the basic income payments.

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Study: A third of Iowans don’t earn enough to pay for basic living

Kevin Hardy | June 29 2016 | Des Moines Register

To survive in Iowa, it takes an income of about twice the federal poverty rate.

That figure was among the findings of a new United Way report that explored why nearly one in three Iowans struggles to afford basic living expenses.

United Way officials hope the findings will draw attention to Iowans who are above the federal poverty line, yet remain unable to afford basic necessities such as food, rent and medicine.

“That means you’re one flat tire from a financial crisis, because … you’re spending everything you have to survive,” said Elisabeth Buck, chief community impact officer at United Way of Central Iowa. “And these are people in our community. They are not faceless people.”

The findings could add fuel to Polk County’s fiery debate over raising the minimum wage above the state and federal standard of $7.25 an hour.

The United Way ALICE Report for Iowa, released Wednesday, concluded that 31 percent of Iowans are working but do not earn enough to cover the basic costs of living (ALICE is short for Asset Limited, Income Constrained, Employed). The report was commissioned by United Ways of Iowa, an association of the 25 local United Ways that serve more than half of Iowa’s 99 counties.

Continue reading Study: A third of Iowans don’t earn enough to pay for basic living

On Pay Equity: The Case of Gravity Payments

from Gravity Payments blog, published July 20th, 2015

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As much as religion and politics are taboo topics to talk about, so is the conversation on money. Compensation is an uncomfortable issue for anyone to discuss, but even with that said, income inequality, the pay gap, gender inequity, and the disparity between top level executives and the average worker are dominating headlines everywhere and trickling into HR inboxes. Wayne Guay, a professor of accounting at Wharton said, “Companies are dealing with two key issues: One, pay inequity, and two, the big gap between what senior executives earn versus average workers.”

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Gravity Payments CEO Dan Price

By Alexander Reed Kelly, published April 25, 2015

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Founder of Gravity Payments Dan Price. (Gravity Payments)

Every week the Truthdig editorial staff selects a Truthdigger of the Week, a group or person worthy of recognition for speaking truth to power, breaking the story or blowing the whistle. It is not a lifetime achievement award. Rather, we’re looking for newsmakers whose actions in a given week are worth celebrating.

We’ve all heard the figures: Chief executives of U.S. businesses take home nearly 300 times as much money as the people who toil beneath them. It’s a reality that stunts the development of many tens of millions of Americans and makes both material and emotional aspects of life harder. Thousands of workers have mobilized a struggle for a higher minimum wage, with some success. But some luckier workers—such as employees of the Seattle-based payments processing firm Gravity Payments—don’t have to.

This month, Dan Price, the 29-year-old founder of Gravity Payments, announced that he would cut his salary by roughly 90 percent from nearly $1 million to $70,000 per year and raise the salaries of his lowest-paid employees to that same level. Members of his 120-person staff were stunned. The paychecks of some 70 of them will grow over the three-year period during which the change is set to go into effect, and 30 of them will earn twice what they do now. The average annual salary at the company is $48,000.

Price said his own salary would shift back toward the $1 million mark in the years ahead in proportion to Gravity’s growing revenue. He began the company in his dorm room at Seattle Pacific University a few years after he learned he could process credit card payments more cheaply and with better service than existing large corporations.

Honorable remarks by Price on his decision were reported in The New York Times (the article included a video recording of Price making the announcement to his staff): “The market rate for me as a C.E.O. compared to a regular person is ridiculous, it’s absurd.” The Times reported that the main extravagances enjoyed by Price, who grew up in rural Idaho, are snowboarding and picking up the bar bill and that he drives a 12-year-old Audi, obtained in a barter arrangement with the local dealer.

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One Company’s New Minimum Wage: $70,000 a Year

by Patricia Cohen, published April 13, 2015 (h/t to Neatorama)

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Dan Price, C.E.O. of Gravity Payments, announcing the new base salary. “Is anyone else freaking out right now?” he said. “I’m kind of freaking out.” Credit Matthew Ryan Williams for The New York Times

The idea began percolating, said Dan Price, the founder of Gravity Payments, after he read an article on happiness. It showed that, for people who earn less than about $70,000, extra money makes a big difference in their lives.

His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000.

“Is anyone else freaking out right now?” Mr. Price asked after the clapping and whooping died down into a few moments of stunned silence. “I’m kind of freaking out.”

Movement to Increase McDonald’s Minimum Wage Broadens Its TacticsMARCH 30, 2015
If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year.

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Employees reacting to the news. The average salary at Gravity Payments had been $48,000 year. Credit Matthew Ryan Williams for The New York Times

The paychecks of about 70 employees will grow, with 30 ultimately doubling their salaries, according to Ryan Pirkle, a company spokesman. The average salary at Gravity is $48,000 year.

Continue reading One Company’s New Minimum Wage: $70,000 a Year

Alaska Bolstered Its Economy and Curbed Inequality—By Paying Everyone Thousands in Oil Dividends Every Year

After 30 years, the practice of paying every resident—including children—at least $1,000 has made Alaska one of the least unequal states in America. Here’s what the rest of us can learn.
by Peter Barnes, mirrored from Common Dreams

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A Permanent Fund Dividend (PFD) check written from the state of Alaska. This check also includes payment for an energy rebate program for which state residents may be eligible. And yes, that’s Gov. Sarah Palin’s signature. (Photo: travis/flick/cc)

There’s long been a notion that, because money is a prerequisite for survival and security, everyone should be assured some income just for being alive. The notion has been advanced by liberals such as James Tobin, John Kenneth Galbraith, and George McGovern, and by conservatives like Friedrich Hayek, Milton Friedman, and Richard Nixon. It’s embedded in the board game Monopoly, in which all players get equal payments when they pass Go. And yet, with one exception, Americans have been unable to agree on any plan that guarantees some income to everyone. The reasons lie mostly in the stories that surround such income. Is it welfare? Is it redistribution? Does it require higher taxes and bigger government? Americans think dimly of all these things.

Screen Shot 2015-02-05 at 11.18.39 AMBut then, there’s the exception. Jay Hammond, the Republican governor of Alaska from 1974 to 1982, was an independent thinker who conceived of, and then persuaded Alaska’s legislators to adopt, the world’s first system for paying equal dividends to everyone. In Hammond’s model, the money comes not from taxes but from a common resource: North Slope oil. Using proceeds from that gift of nature, the Alaska Permanent Fund has paid equal yearly dividends to every resident, including children, ranging from about $1,000 to over $3,000. (Bear in mind that a family of four collects four same sized dividends.) While this isn’t enough to live on, it nicely supplements Alaskans’ other earnings. And paying such dividends regularly for more than thirty years has bolstered the state’s economy, reduced poverty, and made Alaska one of the least unequal states in America.

The question Americans in the lower 48 should now ask is: Did Alaska find the right formula? If it can convert part of its common wealth into equal dividends for everyone, can the rest of America do the same?

There are many good reasons to ask this question. One is that America’s middle class is in steady decline. In the heyday of our middle class, jobs at IBM and General Motors were often jobs for life. Employers offered decent wages, health insurance, paid vacations and defined pensions. Nowadays, such jobs are rare.

Continue reading Alaska Bolstered Its Economy and Curbed Inequality—By Paying Everyone Thousands in Oil Dividends Every Year

This City Eliminated Poverty, And Nearly Everyone Forgot About It

by Zi-Ann Lum, Huffington Post

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An aerial view of the city of Dauphin, Manitoba. Forty years ago, a groundbreaking experiment provided checks to Dauphin’s poorest to raise their incomes to a livable wage. (Photo: Dauphin Economic Development/Facebook)

 

On a December afternoon, Frances Amy Richardson took a break from her quilting class to reflect on a groundbreaking experiment she took part in 40 years earlier.

“Well, that was quite a few years ago,” she said. “There was a lot of people that really benefitted from it.”

Between 1974 and 1979, residents of a small Manitoba city were selected to be subjects in a project that ensured basic annual incomes for everyone. For five years, monthly checks were delivered to the poorest residents of Dauphin, Manitoba –- no strings attached.

And for five years, poverty was completely eliminated.

The program was dubbed “Mincome” — a neologism of “minimum income” — and it was the first of its kind in North America. It stood out from similar American projects at the time because it didn’t shut out seniors and the disabled from qualification.

The project’s original intent was to evaluate if giving checks to the working poor, enough to top-up their incomes to a living wage, would kill people’s motivation to work. It didn’t.

But the Conservative government that took power provincially in 1977 — and federally in 1979 — had no interest in implementing the project more widely. Researchers were told to pack up the project’s records into 1,800 boxes and place them in storage.

A final report was never released.

Richardson is now 87 and still lives in Dauphin. She says only three or four of the city’s original Mincome recipients remain among the prairie community’s 8,251 residents.

During the program’s heyday in the mid-1970s, Richardson was a mother of six – three of her children lived at home.

To earn money, she ran a small salon out of her home called Fifth Avenue Beauty Chalet. Whatever cash she could make styling hair contributed one stream of the family’s income; her husband Gordon provided the other with his job at the local telephone company.

Continue reading This City Eliminated Poverty, And Nearly Everyone Forgot About It

OUR RIDICULOUS APPROACH TO RETIREMENT

By TERESA GHILARDUCCI
Published: July 21, 2012 in the New York Times

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I work on retirement policy, so friends often want to talk about their own retirement plans and prospects. While I am happy to have these conversations, my friends usually walk away feeling worse — for good reason.

Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts. The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.

In my ad hoc retirement talks, I repeatedly hear about the “guy.” This is a for-profit investment adviser, often described as, “I have this guy who is pretty good, he always calls, doesn’t push me into investments.” When I ask how much the “guy” costs, or if the guy has fiduciary loyalty — to the client, not the firm — or if their investments do better than a standard low-fee benchmark, they inevitably don’t know. After hearing about their magical guy, I ask about their “number.”

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THE GREATEST RETIREMENT CRISIS IN AMERICAN HISTORY

by Edward “Ted” Siedle, Published in Forbes on March 20, 2013

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We are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the Baby Boomers and others, slipping into poverty. Too frail to work, too poor to retire will become the “new normal” for many elderly Americans.

That dire prediction, which I wrote two years ago, is already coming true. Our national demographics, coupled with indisputable glaringly insufficient retirement savings and human physiology, suggest that a catastrophic outcome for at least a significant percentage of our elderly population is inevitable. With the average 401(k) balance for 65 year olds estimated at $25,000 by independent experts – $100,000 if you believe the retirement planning industry – the decades many elders will spend in forced or elected “retirement” will be grim.  (Update: In response to readers’ questions about the lower number, Teresa Ghilarducci, a professor of economics at the New School for Social Research, estimates that 75% of Americans nearing retirement in 2010 had less than $30,000 in their retirement accounts.)

Corporate America and the financial wizards behind the past three decades of so-called retirement innovations, most notably titans of the pension benefits consulting and mutual fund 401(k) industries, are down-playing just how bad things are already and how much worse they are going to get.

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The Case for a Basic Guaranteed Income for All

by Carl Gibson, Co-Founder of US Uncut, published at Reader Supported News on May 11, 2014    

7330-money-one-hundred-bills-072612If you have to pay taxes for existing, you should be guaranteed a basic minimum income for surviving.

It wouldn’t amount to much, but guaranteeing every American citizen 18 and older $1,000 per month, or $12,000 a year, is the most reasonable, practical, and commonsense way to address the inequality crisis that everyone in the country and most of the world is talking about right now.

By “all” I mean everyone over age 18, regardless of their current job and income situation. It would be optional, so those who already have fulfilling careers or make sufficient income to not need the extra $1,000 a month don’t have to take it. Ideally, this basic guaranteed income for all would be adjusted for inflation, and would phase in gradually while unemployment compensation and food stamps phase out. Other staples of the safety net, like Social Security, Medicare, and Medicaid, would still remain.

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