7 ms·

L.A. pilot guaranteeing families $1k/month shows 'transformative' results: study

jauntywundrkind 2y ago
Nation who keeps trialing successful thing asks, why does nothing work?
- SpicyLemonZest 2y ago
  Who's asking why does nothing work? I don't think anyone but the most ridiculous contrarians would argue that basic income doesn't work _at all_, that getting a free $1k/month somehow provides 0 benefit to the family that receives it. The basic income debate is largely between people who think it's worth the cost and people who think it isn't, so figuring out exactly what the benefits are is an important input.
AndrewKemendo 2y ago
The only reason we dont have policies that give people money directly is because it doesn’t allow for the people who have money, to control what the people who get it, do with the money Why, cause what people typically do with money like in UBI situations, is get out from under the control of people with money. As the system exists, all the money resides with people who don’t want other people to get it. It’s overwhelmingly clear the majority of people with more than living wage amount of money, want to spend it exclusively on their own consumptive pleasure with no positive externalities. So they’re not going to support or implement policies (via the government they’ve captured) to make it easier for people to be less dependent on existing power structures Where is any of this confusing at this point? It’s all very specifically explicitly understood to work like this. What’s baffling?
- austin-cheney 2y ago
  None of that makes sense. The primary driver of economic health in the US is frequency of domestic spending. It goes in self fulfilling cycles in that when the economy is healthy people make more money and thus can spend money more frequently. When the economy is unhealthy people make less money that drives down spending, which puts other people out of work thus further driving down the economy. If the wealthy people want to become even more wealthy they will work to increase economic health to ensure the regular people earn higher wages which then drives spending and thus drives up the wealthy people’s stock value. In that regard the wealthy people have only a negligible increase of power compared with regular people who vote with their spending. There is no conspiracy to this.
  - refurb 2y ago
    > The primary driver of economic health in the US is frequency of domestic spending. It goes in self fulfilling cycles in that when the economy is healthy people make more money and thus can spend money more frequently. Sure, but money doesn't grow on trees. If you're paying UBI, that money comes from somewhere - tax, debt, etc. That has a negative economic impact in and of itself. There is no free lunch.
    - 6510 2y ago
      > Sure, but money doesn't grow on trees. You know, it is funny that this slogan is only ever used in this context. For all other things no one ever talks about where money comes from. It's created out of thin air, mostly by private corporations. It is no more than a unit of accounting. You can create as much of it as you want as long as something of equal value is created. This may be for example a signature for a lone if one is credit worthy or on the larger scale a disaster or war effort. If quality of life or employability is worth something to a nation they would want to spend on it. We could also ask where the tax is coming from if people cant figure out how to find or hold a job.
    - dredmorbius 2y ago
      Money grows in central bank ledgers. There is no intrinsic limit to the money supply. There is intrinsic limit to what that money supply can buy. But that's an entirely different question. And adjustments to the money supply will have effective redistributive effects depending on where and to whom that new money is distributed. Which tends to prompt "money doesn't grow on trees" commentary from those adversely affected or politically aligned with those, whether for or against their own interests. See generally: MMT.
      - refurb 2y ago
        > See generally: MMT. MMT was proven false by the run up in inflation since Covid.
  - AndrewKemendo 2y ago
    This is the well debunked “trickle down” theory and capitalist economic health measures don’t say shit about thriving. Look at GINI. There’s no need for a formal conspiracy when it’s considered just “how the system works” instead of embedded unethical incentives In reality “work” isn’t how wealthy people grow their money. So you make the mistake of believing the wealthy telling you there’s a ladder to the moon they pay you to keep building.
worstspotgain 2y ago
I'm not opposed to this program or dispute the results. But it would be much more broadly effective to remove one digit from housing prices, chiefly by removing the artificial supply restrictions that have caused them to inflate so much over the last 5 decades. Programs like Down Payment Assistance siphon off public money from worthier causes and dump it into the housing pyramid scheme. I'm afraid a lot of UBI money might be destined for the same fate. The same goes for tech salaries in places like here in the Bay Area.
- bdcravens 2y ago
  Any attempt to open up building restrictions needs to ensure it doesn't just turn itself into an air drop for real estate investors, otherwise it's unlikely to benefit those most in need of housing.
  - worstspotgain 2y ago
    They can invest in $100-300K houses and condos and rent them out for $400-1200/mo all they want. Or even Airbnb or keep them as vacation homes if they'd rather. If there are no supply restrictions, it's not gonna affect the availability of housing for everyone else. Which of course means they won't bother. The whole con is capturing working people's wages by raising rent and rent-derived prices. Conceptually it's similar to the nominally high-paying job in a company town, where almost all your wages get siphoned off by living expenses for company-owned housing and services. The only difference is the payer and the siphoner are different entities.
    - bdcravens 2y ago
      There would have to be an absolute deluge of supply to keep those with capital from buying up, thereby driving up, housing inventory. Like the kind of deluge that keeps building supply stores full of empty shelves for months and bankrupts home owners nationwide as the price of homes plummet. Personally I feel the solution is to clamp down on real estate investors. Also, your rent estimates are off by at least 3x.
deleted 2y ago
[deleted]
ElonChrist 2y ago
[dead]
phyzix5761 2y ago
The study doesn't show any "transformative" results. In all parts of the study the treatment group (the group receiving $1k per month) performed about the same or worse than the control group except in 2 cases: access to food and experiences of physical abuse. The interpretation of the results in the first part of the study sounds like they were written by a PR person with a biased agenda in mind. Read the actual study in the remaining 83 pages [1]. https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2244/t/66a8cd0fc256a2303a8569fc/1722338580211/CGIR+LA+BIGLEAP+Final+Report.pdf https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2...
- deleted 2y ago
  [deleted]
WorkerBee28474 2y ago
The program gave money to "who were pregnant or had at least one child, lived at or below the federal poverty level and experienced hardship related to COVID-19. Participants were randomly selected from about 50,000 applicants". There were probably a million people eligible to apply for the program. 5% of them did. So when considering how well the program would scale, remember that the current results come from those in the 95th or higher percentile of motivation to improve their life.
- Supermancho 2y ago
  > the current results come from those in the 95th or higher percentile of motivation to improve their life. That's a big assumption. eg I could have participated in hundreds of class action against the manufacturer of one of my medical devices. I don't participate in all of them, for practical reasons of time and notification. Then they fell into a selection based on other characteristics like likelihood of success (judgement or settlement), if there were shared legal costs, exclusionary criteria...like not participating in other cases or a limited number, etc. I missed out on millions of dollars, relative to my success case, by being unlucky. There were multiple practical factors involved in the selection, beyond "you could have participated". This oversimplification is not the basis for a conclusion, imo.
underseacables 2y ago
Of course, giving anyone money in a vacuum can have transformative results. However, when you apply that to the wider system of economics, it is utterly destructive. If a business knows that you are getting extra money from the government, they would be leaving money on the table by not increasing prices to get for that money. The same goes with real estate, iPhones, healthcare, and everything else. They know you have the money. I equate this with telling a car dealer exactly how much money you have to spend.
- aurareturn 2y ago
  You’re basically implying that if you give everyone in the US $1,000, no matter what, inflation will happen and people are back to where they started.
  - underseacables 2y ago
    Absolutely. That is exactly right. That's economics. Love it or hate it, the market will always equalize. The only way to stop that is to put price controls on huge amount of commerce, and barring a complete revolution in the American system of commerce, that is never going to happen.
  - toasterlovin 2y ago
    We already ran this experiment several times during the pandemic and inflation did, in fact, happen.
    - jeromegv 2y ago
      Money supply increased but lots of money went into corporations. Not just into individuals pocket.
  - avidiax 2y ago
    Giving these people in isolation $1,000/month, probably no. Giving everyone $1,000/mo, you could expect that money to be captured as economic rents, if not literal rents. If you currently spend $2,000/mo on your apartment, which is probably low for many areas (such as the California Bay Area), then people currently living further away to pay only $1,000/mo can now afford your $2,000/mo apartment. So the price has to go up. I say all of this as a somewhat proponent of UBI. In particular, I like the idea that UBI could replace many assistance programs, would be destigmatized, would not have the administrative overhead of those programs, would not be a welfare trap, and would be fundamentally fair. But giving it to everyone would also tend to be inflationary, and would likely be captured by rent-seekers, unless such rents are controlled somehow. But rent controls are also distorting. It's all very theoretically problematic, and a small scale study just can't be predictive of the distortionary effects that full scale UBI would have.
Aurornis 2y ago
A lot of effort and money has been spent on trying to make this program sound more successful than it was. They put together a long, design heavy packet to spin the results for media: https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2244/t/66a8cd0fc256a2303a8569fc/1722338580211/CGIR+LA+BIGLEAP+Final+Report.pdf https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2... When you look at the details, the results aren’t as good as the headlines. There are major selection bias problems with how both the control group and the $1K/month group were selected and retained. Even the results that differ between groups aren’t all that amazing and feel like they were cherry picked to be easy wins in a study like this. Of course giving people $1K/month results in that group self/describing as feeling like they’re in a better position to handle an unexpected $400/month expense because you’re literally giving them 2.5X that per month. It’s like the study authors handed themselves a guaranteed win and then congratulated themselves on it. The claims about employment aren’t really supported by the data, either. The PR piece claims this: > Guaranteed-income recipients also were more likely to secure full-time or part-time employment, or to be looking for work, rather than being unemployed and not looking for work, the study found. But when I look at the data on page 57 of the report it shows the treatment group ($1K/month) had higher unemployment at 18 months. If this was a study about a psychology paper or some social sciences hypothesis then the comments would be all over the glaring dishonesty of how these results are being spun. Something about UBI type research causes a lot of people to assume it’s positive and ignore the issues with the research, though. The numbers in this study do not support the enthusiastic headlines at all.
deleted 2y ago
[deleted]
kfarr 2y ago
Honestly looking at the paper there are enough statistically significant benefits to make this societally worthwhile and even more statistically insignificant but uniquely important to each participant that this seems like a no brainer to continue. "GI recipients were significantly more likely to secure full-time employment than to remain unemployed not looking for work, compared to control participants across the duration of the pilot." "The treatment group demonstrated a significant decrease in food insecurity and an increase in health-promoting behaviors." "Far more GI recipients reported that their children participated in enrichment activities, such as sports, lessons, and clubs, than control participants. At Baseline, approximately 44% of the treatment group (vs. 40% control) had their children in at least one enrichment activity" Secondary effect of positive life conditions for dependents isn't even quantified in any of the research or other comments in this thread, that starts to compound the benefit.
scotty79 2y ago
Unrelated, but I recently had an interesting idea about taxation. Everyone since forever is trying to tax profits. But profits are very easy to manipulate because you can invent costs out of thin air to avoid paying taxes for specific income in specific places. There were some attempts at taxing corporate income (and it's prevalent way of taxing poor individuals) but it has a problem of stifling industries that have high incomes but also high costs. What if we taxed costs instead? If you are spending the money it means you have money to spend. Why not let country skim that a bit instead? There are some things in taxation that work like that. For example VAT which is ostensibly a tax on value added but in practice is a tax on consumption on the final consumer. Similarily sales tax. Energy taxes. Surprisingly also social security fees. Those are effectively taxes levied on corporations for spending money on labor. That's why they are insanely effective because while corporations can very easily hide profits they can't hide what they pay their workers for the labor they need. There's strong moral opposition to income taxes because people see them as a punishment for being successful or working hard. It would be way harder to spin taxes on costs this way. Those would be a punishment for not being able to do more with less. So you basically need to tax buyers of everything. Products, services, rights, licenses, assets, rents, raw labor. Those taxes can be collected either form buyer or the seller, whoever is easier to scrutinize and collect. The issue with this scheme is there's incentive for buyers to ask sellers to hide the sale to save on tax. Currently also sellers have an incentive to hide sales to hide profits that are also taxed. So by removing income taxes we diminish this incentive. Sellers also have slight disincentive to hide the sale, for example because if they have a cost in the future they could be cross-checked if they had enough money to bear that cost. To give them further incentive their income could even award them tax credit towards taxes on costs. Sort of a reverse VAT system. This might be prone to fraud as all tax deductions are and possibly unnecessary (unless for subsidizing those heavy cost, high profit industries) but profits are way harder to fake than costs.

Nation who keeps trialing successful thing asks, why does nothing work?

SpicyLemonZest 2y ago
Who's asking why does nothing work? I don't think anyone but the most ridiculous contrarians would argue that basic income doesn't work _at all_, that getting a free $1k/month somehow provides 0 benefit to the family that receives it. The basic income debate is largely between people who think it's worth the cost and people who think it isn't, so figuring out exactly what the benefits are is an important input.

The only reason we dont have policies that give people money directly is because it doesn’t allow for the people who have money, to control what the people who get it, do with the money Why, cause what people typically do with money like in UBI situations, is get out from under the control of people with money. As the system exists, all the money resides with people who don’t want other people to get it. It’s overwhelmingly clear the majority of people with more than living wage amount of money, want to spend it exclusively on their own consumptive pleasure with no positive externalities. So they’re not going to support or implement policies (via the government they’ve captured) to make it easier for people to be less dependent on existing power structures Where is any of this confusing at this point? It’s all very specifically explicitly understood to work like this. What’s baffling?

austin-cheney 2y ago
None of that makes sense. The primary driver of economic health in the US is frequency of domestic spending. It goes in self fulfilling cycles in that when the economy is healthy people make more money and thus can spend money more frequently. When the economy is unhealthy people make less money that drives down spending, which puts other people out of work thus further driving down the economy. If the wealthy people want to become even more wealthy they will work to increase economic health to ensure the regular people earn higher wages which then drives spending and thus drives up the wealthy people’s stock value. In that regard the wealthy people have only a negligible increase of power compared with regular people who vote with their spending. There is no conspiracy to this.
- refurb 2y ago
  > The primary driver of economic health in the US is frequency of domestic spending. It goes in self fulfilling cycles in that when the economy is healthy people make more money and thus can spend money more frequently. Sure, but money doesn't grow on trees. If you're paying UBI, that money comes from somewhere - tax, debt, etc. That has a negative economic impact in and of itself. There is no free lunch.
  - 6510 2y ago
    > Sure, but money doesn't grow on trees. You know, it is funny that this slogan is only ever used in this context. For all other things no one ever talks about where money comes from. It's created out of thin air, mostly by private corporations. It is no more than a unit of accounting. You can create as much of it as you want as long as something of equal value is created. This may be for example a signature for a lone if one is credit worthy or on the larger scale a disaster or war effort. If quality of life or employability is worth something to a nation they would want to spend on it. We could also ask where the tax is coming from if people cant figure out how to find or hold a job.
  - dredmorbius 2y ago
    Money grows in central bank ledgers. There is no intrinsic limit to the money supply. There is intrinsic limit to what that money supply can buy. But that's an entirely different question. And adjustments to the money supply will have effective redistributive effects depending on where and to whom that new money is distributed. Which tends to prompt "money doesn't grow on trees" commentary from those adversely affected or politically aligned with those, whether for or against their own interests. See generally: MMT.
    - refurb 2y ago
      > See generally: MMT. MMT was proven false by the run up in inflation since Covid.
- AndrewKemendo 2y ago
  This is the well debunked “trickle down” theory and capitalist economic health measures don’t say shit about thriving. Look at GINI. There’s no need for a formal conspiracy when it’s considered just “how the system works” instead of embedded unethical incentives In reality “work” isn’t how wealthy people grow their money. So you make the mistake of believing the wealthy telling you there’s a ladder to the moon they pay you to keep building.

worstspotgain 2y ago

I'm not opposed to this program or dispute the results. But it would be much more broadly effective to remove one digit from housing prices, chiefly by removing the artificial supply restrictions that have caused them to inflate so much over the last 5 decades. Programs like Down Payment Assistance siphon off public money from worthier causes and dump it into the housing pyramid scheme. I'm afraid a lot of UBI money might be destined for the same fate. The same goes for tech salaries in places like here in the Bay Area.

bdcravens 2y ago
Any attempt to open up building restrictions needs to ensure it doesn't just turn itself into an air drop for real estate investors, otherwise it's unlikely to benefit those most in need of housing.
- worstspotgain 2y ago
  They can invest in $100-300K houses and condos and rent them out for $400-1200/mo all they want. Or even Airbnb or keep them as vacation homes if they'd rather. If there are no supply restrictions, it's not gonna affect the availability of housing for everyone else. Which of course means they won't bother. The whole con is capturing working people's wages by raising rent and rent-derived prices. Conceptually it's similar to the nominally high-paying job in a company town, where almost all your wages get siphoned off by living expenses for company-owned housing and services. The only difference is the payer and the siphoner are different entities.
  - bdcravens 2y ago
    There would have to be an absolute deluge of supply to keep those with capital from buying up, thereby driving up, housing inventory. Like the kind of deluge that keeps building supply stores full of empty shelves for months and bankrupts home owners nationwide as the price of homes plummet. Personally I feel the solution is to clamp down on real estate investors. Also, your rent estimates are off by at least 3x.

deleted 2y ago

[deleted]

ElonChrist 2y ago

[dead]

phyzix5761 2y ago

The study doesn't show any "transformative" results. In all parts of the study the treatment group (the group receiving $1k per month) performed about the same or worse than the control group except in 2 cases: access to food and experiences of physical abuse. The interpretation of the results in the first part of the study sounds like they were written by a PR person with a biased agenda in mind. Read the actual study in the remaining 83 pages [1]. https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2244/t/66a8cd0fc256a2303a8569fc/1722338580211/CGIR+LA+BIGLEAP+Final+Report.pdf https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2...

deleted 2y ago
[deleted]

WorkerBee28474 2y ago

The program gave money to "who were pregnant or had at least one child, lived at or below the federal poverty level and experienced hardship related to COVID-19. Participants were randomly selected from about 50,000 applicants". There were probably a million people eligible to apply for the program. 5% of them did. So when considering how well the program would scale, remember that the current results come from those in the 95th or higher percentile of motivation to improve their life.

Supermancho 2y ago
> the current results come from those in the 95th or higher percentile of motivation to improve their life. That's a big assumption. eg I could have participated in hundreds of class action against the manufacturer of one of my medical devices. I don't participate in all of them, for practical reasons of time and notification. Then they fell into a selection based on other characteristics like likelihood of success (judgement or settlement), if there were shared legal costs, exclusionary criteria...like not participating in other cases or a limited number, etc. I missed out on millions of dollars, relative to my success case, by being unlucky. There were multiple practical factors involved in the selection, beyond "you could have participated". This oversimplification is not the basis for a conclusion, imo.

underseacables 2y ago

Of course, giving anyone money in a vacuum can have transformative results. However, when you apply that to the wider system of economics, it is utterly destructive. If a business knows that you are getting extra money from the government, they would be leaving money on the table by not increasing prices to get for that money. The same goes with real estate, iPhones, healthcare, and everything else. They know you have the money. I equate this with telling a car dealer exactly how much money you have to spend.

aurareturn 2y ago
You’re basically implying that if you give everyone in the US $1,000, no matter what, inflation will happen and people are back to where they started.
- underseacables 2y ago
  Absolutely. That is exactly right. That's economics. Love it or hate it, the market will always equalize. The only way to stop that is to put price controls on huge amount of commerce, and barring a complete revolution in the American system of commerce, that is never going to happen.
- toasterlovin 2y ago
  We already ran this experiment several times during the pandemic and inflation did, in fact, happen.
  - jeromegv 2y ago
    Money supply increased but lots of money went into corporations. Not just into individuals pocket.
- avidiax 2y ago
  Giving these people in isolation $1,000/month, probably no. Giving everyone $1,000/mo, you could expect that money to be captured as economic rents, if not literal rents. If you currently spend $2,000/mo on your apartment, which is probably low for many areas (such as the California Bay Area), then people currently living further away to pay only $1,000/mo can now afford your $2,000/mo apartment. So the price has to go up. I say all of this as a somewhat proponent of UBI. In particular, I like the idea that UBI could replace many assistance programs, would be destigmatized, would not have the administrative overhead of those programs, would not be a welfare trap, and would be fundamentally fair. But giving it to everyone would also tend to be inflationary, and would likely be captured by rent-seekers, unless such rents are controlled somehow. But rent controls are also distorting. It's all very theoretically problematic, and a small scale study just can't be predictive of the distortionary effects that full scale UBI would have.

Aurornis 2y ago

A lot of effort and money has been spent on trying to make this program sound more successful than it was. They put together a long, design heavy packet to spin the results for media: https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2244/t/66a8cd0fc256a2303a8569fc/1722338580211/CGIR+LA+BIGLEAP+Final+Report.pdf https://static1.squarespace.com/static/5fdc101bc3cfda2dcf0a2... When you look at the details, the results aren’t as good as the headlines. There are major selection bias problems with how both the control group and the $1K/month group were selected and retained. Even the results that differ between groups aren’t all that amazing and feel like they were cherry picked to be easy wins in a study like this. Of course giving people $1K/month results in that group self/describing as feeling like they’re in a better position to handle an unexpected $400/month expense because you’re literally giving them 2.5X that per month. It’s like the study authors handed themselves a guaranteed win and then congratulated themselves on it. The claims about employment aren’t really supported by the data, either. The PR piece claims this: > Guaranteed-income recipients also were more likely to secure full-time or part-time employment, or to be looking for work, rather than being unemployed and not looking for work, the study found. But when I look at the data on page 57 of the report it shows the treatment group ($1K/month) had higher unemployment at 18 months. If this was a study about a psychology paper or some social sciences hypothesis then the comments would be all over the glaring dishonesty of how these results are being spun. Something about UBI type research causes a lot of people to assume it’s positive and ignore the issues with the research, though. The numbers in this study do not support the enthusiastic headlines at all.

deleted 2y ago

[deleted]

kfarr 2y ago

Honestly looking at the paper there are enough statistically significant benefits to make this societally worthwhile and even more statistically insignificant but uniquely important to each participant that this seems like a no brainer to continue. "GI recipients were significantly more likely to secure full-time employment than to remain unemployed not looking for work, compared to control participants across the duration of the pilot." "The treatment group demonstrated a significant decrease in food insecurity and an increase in health-promoting behaviors." "Far more GI recipients reported that their children participated in enrichment activities, such as sports, lessons, and clubs, than control participants. At Baseline, approximately 44% of the treatment group (vs. 40% control) had their children in at least one enrichment activity" Secondary effect of positive life conditions for dependents isn't even quantified in any of the research or other comments in this thread, that starts to compound the benefit.

scotty79 2y ago

Unrelated, but I recently had an interesting idea about taxation. Everyone since forever is trying to tax profits. But profits are very easy to manipulate because you can invent costs out of thin air to avoid paying taxes for specific income in specific places. There were some attempts at taxing corporate income (and it's prevalent way of taxing poor individuals) but it has a problem of stifling industries that have high incomes but also high costs. What if we taxed costs instead? If you are spending the money it means you have money to spend. Why not let country skim that a bit instead? There are some things in taxation that work like that. For example VAT which is ostensibly a tax on value added but in practice is a tax on consumption on the final consumer. Similarily sales tax. Energy taxes. Surprisingly also social security fees. Those are effectively taxes levied on corporations for spending money on labor. That's why they are insanely effective because while corporations can very easily hide profits they can't hide what they pay their workers for the labor they need. There's strong moral opposition to income taxes because people see them as a punishment for being successful or working hard. It would be way harder to spin taxes on costs this way. Those would be a punishment for not being able to do more with less. So you basically need to tax buyers of everything. Products, services, rights, licenses, assets, rents, raw labor. Those taxes can be collected either form buyer or the seller, whoever is easier to scrutinize and collect. The issue with this scheme is there's incentive for buyers to ask sellers to hide the sale to save on tax. Currently also sellers have an incentive to hide sales to hide profits that are also taxed. So by removing income taxes we diminish this incentive. Sellers also have slight disincentive to hide the sale, for example because if they have a cost in the future they could be cross-checked if they had enough money to bear that cost. To give them further incentive their income could even award them tax credit towards taxes on costs. Sort of a reverse VAT system. This might be prone to fraud as all tax deductions are and possibly unnecessary (unless for subsidizing those heavy cost, high profit industries) but profits are way harder to fake than costs.