My colleague at the Georgia Center for Opportunity Erik Randolph, with Dr. Vance Ginn of the Texas Public Policy Foundation penned an op-ed about Atlanta’s new UBI pilot program. Randolph and Ginn say there is a better way to help lift people out of poverty.
For Atlanta to make a real difference in seeking innovative solutions to providing poverty relief, the city must focus on giving those in need opportunity, not simply pity. Most people living in poverty want to provide for their families, get ahead, and live dignified, self-sufficient lives.
In 2020, the poverty rate in Georgia was 21.3%. Major welfare programs in the Peach State in September 2021 had around 3.9 million residents enrolled.
A key is to improve opportunities to work while giving greater flexibility to our neighbors. This can be done in changing how they may use their temporary government assistance payments to meet their current needs while setting them up for self-sufficiency later.
One innovative idea that would do just that are Empowerment Accounts.
These accounts would provide safety net funding to certain eligible recipients on a debit card. To qualify, people would need to be working, training, or being educated while meeting with a community case manager. The program also includes a financial literacy and savings component that paves the way for recipients to pay for long-term needs.
Atlanta leaders could test these Empowerment Accounts in a pilot project, funded at first by philanthropists.
Why are Empowerment Accounts a better solution than basic guaranteed income?
Their primary benefit is that they treat each recipient as an individual with a long-term upward trajectory. We must help the impoverished through immediate aid, but the best long-term solution to poverty is through creating incentives and opportunities for work. This combination of work and community support will help build the hope and social capital too often lost with the current safety net system.
If implemented on a state or even national scale, Empowerment Accounts would also provide a crucial reform to our flawed safety-net system.
They would condense and replace the overstretched, wasteful programs into one consolidated, more effective program. By reducing bureaucratic bloat and streamlining payments, more resources would go to needy families while fostering eventual financial independence.
Another benefit of Empowerment Accounts over the current safety-net system is that they would eliminate burdensome benefit cliffs when current programs end. Safety net recipients are often discouraged from earning an additional dollar because the cliffs often trap them in a system they yearn to escape. As a solution, Empowerment Accounts funding would taper over a specified period and any savings would stay with the recipient, helping with the problem of a benefit cliff.