Get Rid Of Poverty in Four Years

Basic Income and Direct Giving

By: K. Valley

Poor people aren’t poor because of some inherent flaw, or due to the poor gene. We’re poor because we lack cash.

We’re poor because rich people hoard our money like the world’s biggest creeps. We’re poor because rich people and their governments, bought with our money, ensure there’s always a group of people desperate enough to take their shitty jobs at shitty pay.

We’re poor because rich people and the governments that enable them, like it that way.

If you’re not familiar with Rutger Bregman, he’s a Dutch scientist who used to believe the same lies that many still do, that there’s “something inherently wrong” with poor people. A study involving farmers in India taught him poverty was because of a lack of cash.

Take a look at his TEDTalk if you’re interested.

Turns out people who are “poor” are primarily lacking cash. Give those who are cash poor actual cash, then back up out of their way and watch lives take off. Improving across every measure, physical, mental, housing, education, and income.

How do I know this? It’s been proven repeatedly in Canada, the US, the UK, and India. Everywhere a Basic Income (BI) or Universal Basic Income (UBI), or Direct Giving has been examined, the results speak for themselves.

In fact, in the Canadian town of Dauphin, Manitoba poverty was completely eliminated.

Basic Income, Universal Basic Income, GAI

Basic Income, Universal Basic Income, Mincome (Minimum Income) and Guaranteed Annual Income (GAI) are different names for similar programs giving every adult citizen a baseline monthly income.

Economists recognize UBI as a practical way to end poverty and distribute wealth, yet governments around the world have avoided them even after successful experiments showing the good they do in a short period of time.

1970’s USA

In his 1962 book, Capitalist and Freedom, Milton Friedman advocated for a Guaranteed Annual Income to alleviate poverty, fix broken aid systems and ensure no one fell through the gaps.

Critics “feared” it would lead to people not wanting to work. Although none of the experiments showed that people stopped working, but instead took time to choose better work, politicians eventually used this to justify ending the experiments. In a system designed to ensure a steady supply of desperate people, basic income was a disruptor.

The US Experiments with Guaranteed Annual Income, 1968, 1972

The first experiments happened in New Jersey and Pennsylvania involving an urban population. Gary, Indiana hosted a second run to see what effect the GAI would have on single parents. In a third experiment, North Carolina tested the effect a Basic Income would have on a rural population.

The final and largest test was the Seattle-Denver experiment. They wanted to know how GAI would affect “social behaviours.”

Social Behaviours

Married women stayed home longer with their children, young people stayed in school longer, and husbands slightly reduced their working hours.

In North Carolina, elementary school test scores increased. In New Jersey, people stayed in school longer. In Seattle, in Denver people chose to pursue more education.

The US government dropped the experiments in the late 1970s because any modest reduction in work hours was a disaster.

Dauphin, Manitoba and the Mincome Experiment

In 1978 the Manitoba town of Dauphin was selected as the site for the Minimum Income (mincome) trial. One thousand people were chosen to receive a guaranteed monthly income for 4 years.

The Dauphin, Manitoba Mincome trial was modeled after the scientific US experiments with a control group matched against the mincome receivers. And the main goal here was to test out the response of a basic income on the labour supply.

Almost immediately the project ran into trouble. The budget was too small. The economy was in trouble, the unemployment rate increased driving more people to apply to the program. Behind the scenes, the researchers struggled with the budget, cutting extraneous projects to save as much of the project as they could.

The project ran from 1975 to 1979 but data was only collected for the first two years. Data that was stored away for 25 years in 800 boxes in an undisclosed location and never examined until Health Economist Evelyn Forget located the boxes analyzed and published the results in 2011.

Forget reviewed the data with an eye to Income Security.

That is, she looked at what happens when people know they won’t be allowed to fall? When they know they can rely on the fact their income will not fall below a certain level.

Minimum Income Benefits the Entire Community

Dauphin, Manitoba told the story of those on the minimum income and those not on it. What we learned was, whether they were on the program or not, the community as a whole benefitted.

Dauphin was an agricultural centre, whether you worked in that sector or not, your income might depend on someone else who did. And if the harvest wasn’t good, mincome allowed people a security net to meet their expenses.

Even if they didn’t get the basic income people still chose to keep their kids in school longer. The guaranteed income supported the entire community.

The community experienced greater confidence in their overall ability to manage their economic health without having to rely on their children's wages.

“An 8.5% reduction over four years is pretty dramatic.”

Forget looked at hospitalization data because it was information provided by impartial third parties, doctors in this case. The data told the story of how residents fared at the start of the project and what the doctors saw as the experiment continued.

When the experiment began, Dauphin residents endured a high hospitalization rate. People suffered mental health issues, injuries at work and at home at a rate 8.5% higher than the control group. Four years later Dauphin’s rate was the same as the control.

This included a drop in alcohol use, family violence, accidents, assaults, and suicide attempts.

Evelyn Forget, the Canadian Health Economist who found and analyzed the hidden data from Dauphin’s experiment noted: “An 8.5% reduction over four years is pretty dramatic.”

Forget noted that except for the minimum income guarantee, no other factors could account for such a dramatic improvement.

Four years on the mincome program and the town of Dauphin, Manitoba had people starting new businesses, visiting the dentist, staying in school longer, women delaying their pregnancies till they were older, improved mental health, and improved school outcomes. When the government pulled up and moved out Dauphin returned to poverty. People had to shut the businesses they started, some moved away.

Former resident, Joy Taylor “there was nothing to stay for anymore.”

The Takeaway in all this is that within 4 years peoples’ lives significantly improved and poverty was eliminated. In addition to being impressive, it’s further proof that change can happen as fast as we want.

Dauphin, Manitoba showed us how.

The New Leaf Project, Vancouver, British Columbia

Vancouver, British Columbia, 2015, Claire Williams an Environmental Consultant was looking for meaningful work, for a way to make an impact. She was back in BC after working as a volunteer at a non-profit in India.

Frans Tjallingii helped organizations launch big ideas. Motivated by their own experiences working in nonprofits and by Rutger Bregman’s TEDTalk “Why we should give everyone a basic income” Williams and Tjallingii co-founded the charity, Foundations for Social Change (FSC).

Dr. Jiaying Zhao, a UBC researcher specializing in cognitive decline in poor populations wanted to implement a Direct Giving program to people experiencing homelessness in BC. Research led Claire to Dr. Zhao, and together the three of them created The New Leaf Project to give money directly to people experiencing homelessness.

The Participants

One hundred and fifteen participants were selected, then randomly assigned to receive cash(CR) or no cash (NCR). The cash group received a lump sum payment of $7,500.

How the Program Worked

There was no oversight. No monitoring. There was a questionnaire at one and at three-month intervals, along with two open-ended evaluations to understand individual needs.

The Results

• Cash Recipient’s spent fewer days homeless — 77% to 49% in the first month
• Non-CR’s homeless days increased — 64% to 78%
• CR’s moved into stable housing within three months versus five months for the NCR’s
• CR’s spent most of their budget on food, rent, bills, medications, clothes, transportation
• CR’s spent money on furniture, computers, bikes, vehicles
• CR’s had an additional $4,000 in savings after one month. By the end of the program they still had $1,000 saved.

39% Less Spending on Alcohol and Drugs

New Leaf specifically documented a 39% drop in spending on alcohol and drugs.

UK Program has similar results

The Broadway charity tested Direct Giving in Britain (2010) targeting those people who’d been homeless between 4 to 45 years.

• Thirteen people received a lump sum of $1200. None of them “wanted their money spent on drink, drugs or bets.”
• Eleven got off the streets.

Howard Sinclair (of the Broadway charity) explains: “We just said, ‘It’s your life and up to you to do what you want with it, but we are here to help if you want.’”

Perhaps the establishment’s refusal to implement UBI isn’t about whether people would work or not, after all, 1 in 4 participants held jobs while experiencing homelessness. But because we wouldn’t be inclined to accept their shitty jobs at low pay with unsafe working conditions.

Remember “Things that make you go hmmm?” Arsenio Hall’s catchprase?

Strikes me if governments were serious about eliminating, not reducing, poverty, they could choose from models that are already proven to improve people’s lives.

Now somebody is going to tell me “we need more studies or some such nonsense.” Let me stop you now. No, we don’t.

We need to get serious about shutting down systems that benefit only some people. Anything short of that is making the decision to throw people away. To continue choosing your comfort over our lives. That is the bottom line.

Hmmm?

Call To Action

1. Support these programs where you can find them if you have the means. If they’re not in your area start your own program by helping members of your community directly with no strings attached.
2. Support fellow writers on Kofi or Substack. (I’m not on either. Well, Substack, but I’ve not done a thing with it.)
3. Vote for people who believe in getting rid of poverty and put people before corporations.

The point is, let go of the old ways of “helping” and generously help as you can. It’s not enough to give people our “prayers and thoughts,” or say “angels surround them.” You’ll get through the hard times if you just try hard enough. That doesn’t help. But you know what does.

People who are poor need cash. If we’re serious about doing our part, then let’s actively do our part. Don’t you think?

I appreciate you taking the time to read. Thank you.