The Basic Income Pilot Project: How Will it Benefit Central Iowa?

John Soener, United Way of Central Iowa Investment Manager, shares his thoughts on universal basic income, the benefits, and how United Way is investing in a pilot program impacting our community.

The concept of basic income has been a hot topic for the past few years. For me, the idea was introduced during Andrew Yang’s proposal of a Universal Basic Income (UBI) during his 2020 presidential candidacy. Yang proposed giving $1,000 per month to every American adult, claiming it would have a significant impact on individual economic status and well-being, as well as a larger scale positive impact on the American economy and labor force.

Other proposals for basic income have not been so extensive, nor ambitious. Governments and nonprofit organizations around the world are testing and implementing basic income projects, often with a targeted approach focused on alleviating the most extreme forms of poverty. Through researching and analyzing these programs for her book “Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World”, Annie Lowrey discovered many benefits of a basic income.

Benefits of basic income from "Give People Money":

• Reducing bureaucratic red tape: A basic income would be an efficient model to provide people economic support, rather than the often complex and intricate public benefit programs currently in operation.
• Providing workers with bargaining power: Workers wouldn't have to take jobs paying minimum wage just to stay alive. They would have increased strength to negotiate wages and benefits. 
• Reducing economic inequality: Current economic growth is benefiting the upper class with the middle class shrinks. A basic income program would help redistribute wealth and grow the middle class.
• Ending extreme poverty: About 41 million Americans were living in poverty in 2016. A basic income would keep those living at the margins from experiencing crisis simply due to the loss of a job, an eviction, or divorce. 

The Central Iowa Basic Income Pilot Project

These potential benefits are what make me excited to know United Way of Central Iowa is financially supporting UpLift, the Central Iowa Basic Income Pilot Project spearheaded by the Mid-Iowa Health Foundation. The pilot project will provide 110 low-income individuals with $500 a month for two years, follow a randomized control study model, and produce results that could influence future policy and public and nonprofit funding decisions in our community.

Imagine if every individual adult resident of central Iowa making less than a certain annual income (e.g., $14,580 or 100% of the federal poverty level) simply received a monthly payment from the government. If they lost their job, they may not have to apply for rental support from Polk County General Assistance. Or if their child suddenly needed a new lifesaving medication and their paycheck didn’t cover it, they could have the opportunity to purchase the medicine and might not have to go to a DMARC pantry to feed their family. Having this basic income could allow someone who is experiencing domestic abuse to leave that situation and find safety without having to be homeless. These are only a few examples of the power this could have on a person’s life. And though a basic income program wouldn’t eliminate the need for these valuable community services, it could reduce the high volume of people accessing them during a crisis.

Why Do We Need Basic Income?

While many of the social, political, and economic systems put in place over the past several hundred years have reduced deprivation and brought billions of people across the globe out of extreme poverty, there are still significant systemic issues preventing people from living more prosperous, healthy lives. Simply put, our current societal structure does not allow for all people to thrive.

The United States is the wealthiest and most technologically advanced society in human history, yet we still experience prolific housing insecurity and homelessness, millions of children living in poverty, and deep racial inequality.

A Future Vision

I encourage you to envision a future central Iowa where all residents can afford their rent, can pursue personal and academic goals, and can provide their kids the nourishment they need.

Could a basic income program make that vision a reality? We think it can and we’re eager to see how the Central Iowa Basic Income Pilot Project makes positive change for its participants.

We look forward to sharing the results with our community.