A guaranteed minimum income would reduce incentives to work even more than do current transfer programs such as unemployment compensation, AFDC, food stamps, and Medicaid. Enough stigma and restrictions are associated with existing transfer programs that many low income people do not participate. Since all Americans would receive it, a GMI would reduce almost everyone’s incentive to work. In particular, it would discourage people from doing the menial, unpleasant, and low paying jobs that are vital to economic prosperity.
The key to economic prosperity and full employment is to reduce government spending on entitlement programs, not to add a new one. The associated reduction in taxes or government borrowing would increase the money available for investment in capital and job training, enabling more people to work and earn high wages so they could escape poverty and dependence on the government.
Although it sounds enticing, a guaranteed minimum income is not the answer to reduce poverty.
Dr. Tracy C. Miller is an associate professor of economics at Grove City College and fellow for economic theory and policy with The Center for Vision & Values. He holds a Ph.D. from University of Chicago.
The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.