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Mayor Carter’s ‘guaranteed income’ scheme is just a new name for more welfare

On Tuesday, the Pioneer Press reported: ‘St. Paul mayor joins national coalition calling for guaranteed income for people‘. A look at the details shows that it would be bad policy. 

The Guaranteed Income is not the same as a Universal Basic Income

First, even among supporters of free markets and smaller government you can find proponents of a Universal Basic Income (UBI), a cash payment to all citizens regardless. If you could eliminate all welfare programs with their vast overhead, they argue, and simply send cash to people it might actually work out saving money.

Whether this is true or not, the scheme proposed by the mayors is not that. As Business Insider reports:

Guaranteed income and universal basic income (UBI) are not quite the same, but share many advocates.

According to the mayoral coalition’s website FAQ, guaranteed incomes are meant for people who most need support, versus a universal income which would be given to everyone.

This is nothing very new: it is simply higher welfare spending with a snappy new name.

We already have a guaranteed income

Second, we already have a guaranteed income. Americans who lose their jobs are eligible for unemployment insurance if they meet certain criteria. In the current Covid-19 crisis, many have been getting an extra $600 a week on top of that thanks to the CARES Act.

The mayors do not propose using a Guaranteed Income to replace current welfare arrangements, instead it will just be added to them. Their FAQs states:

A guaranteed income is meant to supplement, rather than replace, the existing social safety net… 

This scheme will be very expensive indeed.

Old policy in new bottles

The ‘living wage’ which you sometimes hear about is just a snappy new name for ‘higher minimum wage’. Mayor Carter’s Guaranteed Income is the same. It is simply a plan to add another layer of welfare to the existing arrangements. We can debate the pros or cons of this, but let us not be misled into thinking this is anything new.

John Phelan is an economist at the Center of the American Experiment. 

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