The model of basic income, or a small stipend of money as a direct transfer with no qualifying or strings attached, has been getting noticeable attention recently as Stockton, California attempts the first major city program of basic income, funded by various philanthropists and Facebook. Several large scale programs are in the planning stages. GiveDirectly.org has been using this model of direct cash transfers in the developing world for a number of years, and performing rigorous research on the process. Their research, modelled on the developing world, is being studied with great interest by government and city planners who are considering the coming AI revolution, and the consequences for knowledge workers.
Among anti-poverty programs, cash transfer programs have significant research proving their efficacy long-term. Benefits accrue to the household and community, including children’s schooling, and there are little to no reported instances of alcohol, cigarette, or “temptation” purchases. This research explains Y Combinator’s interest in the way cash transfers might stimulate creative enterprise. NoLeanSeason, a Y-Combinator backed startup, is looking at the basic income model for seasonal workers in both the developing and the developed world.
There are several challenges to using data coming out of the developing world to plan and manage cash transfer programs in the developed world. In Kenya, where GiveDirectly.org began, the majority of Kenyans are familiar with mobile money and receiving their basic income from a mobile money agent in the near community. The typical disbursement is a thousand dollars, typical funding for a year.
It appears at this point, with data from 4-5 years out, that the direct cash payments model is effective in reducing some of the human suffering associated with poverty. The basic income proponents in the developed world also believe that poverty-based social ills can be alleviated with money.
Basic Income believes that poor people are poor because they don’t have any money. If social beliefs across the globe continue that poor people are poor because they are lazy, weak, or have some other character flaw that separates them from those who have been able to make it, then we will continue to have a problem with acceptance of these programs. The small number of studies so far out of cash benefits programs suggest that poor people are poor because they don’t have any money. It they get some money, they will bootstrap themselves, and their families, out of poverty.
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