RMAPI reports lost income as top local concern during pandemic

The Rochester-Monroe Anti-Poverty Initiative has released its COVID-19 community concerns for the week of April 13, and lost income is among the top issues this week.

211 calls for assistance during week of April 5 (Courtesy of Rochester-Monroe Anti-Poverty Initiative)
211 calls for assistance during week of April 5 (Courtesy of Rochester-Monroe Anti-Poverty Initiative)

RMAPI officials said lost incomes continue to be a priority concern, as well as information about the federal rebates and how to access them for those who do not file income tax returns or do not have direct deposit or bank accounts. Applying for unemployment benefits continues to be a struggle as well.

“While community members are aware of expanded unemployment benefits and the CARES Act rebate, many are in need of relief now to afford their basic needs such as rent, food, hygiene products or utilities,” RMAPI officials said in the update.

The update suggests a need for accurate information about how COVID-19 is spread and what activities might put people at risk. Questions raised include whether the virus is transmitted through water and if smoking increases the risk level.

“Wearing masks is now recommended for anyone going out in public to prevent the spread of COVID-19, but it is important to remember that due to structural racism this is challenging for African Americans who may be perceived as dangerous for doing so,” RMAPI officials warned.

Mental health is a growing concern, the update contends, due to social isolation. Some community members are seeking ways to engage with their community virtually while others are not sure how to get emotional support during the crisis.

There also is a growing concern for children who are falling further behind in their education. RMAPI found that parents who are working remotely do not have the time or financial means to provide full-time homeschooling. Some children are not accessing available food supports and those who do are more at risk of contracting COVID-19.

“Children whose routines have been disrupted are struggling emotionally and may be without emotional support without access to their teachers and peers,” according to RMAPI’s findings.

There is concern for what employment opportunities will look like after the quarantine ends and a fear for how to manage after the outbreak ends and bills have piled up, the organization found.

RMAPI examined 211 call data and found that the percentage of calls related to food needs had increased significantly from early March to early April. On April 1, 37 percent of 211 calls were for food. That compares with less than 10 percent a month earlier.

[email protected] / 585-653-4021
Follow Velvet Spicer on Twitter: @Velvet_Spicer

Should we think seriously about a universal basic income?

The concept of a universal basic income has now gotten a lot of attention. This state of affairs has been helped greatly by the support offered to the UBI by luminaries such as Elon Musk of Tesla and Mark Zuckerberg of Facebook. However, before we get on the UBI bandwagon, it is helpful to first ponder the meaning of this concept and to then analyze whether there is a need for a UBI.

There is no single and widely accepted definition of a UBI. Even so, most people agree a UBI is a welfare program in which the government makes cash payments to every citizen with no strings attached. This means that it does not matter whether the recipient is destitute or a millionaire, employed or unemployed, sick or healthy. Everyone gets the UBI. The difficulties begin as soon as we get past this basic observation.

To see this, let us first ascertain the objective of a UBI. There are two cases to consider. Many would like to use a UBI to reduce income inequality and create a more efficient social safety net than the mishmash of Medicaid, Medicare, Social Security and the other programs that we have in place. The economist Michael Hicks points out the cost of implementing a UBI in America would be around $3.3 trillion. There is no way to implement a UBI that costs this much without either substantially or completely eliminating all other anti-poverty programs. Many of these anti-poverty programs (free school lunches) have large constituencies and it is hard to see how the beneficiaries would willingly forego their beloved programs.

Because a UBI in its purest form is so costly, some have suggested we should limit the benefits to high-income people or eliminate payments to children. But the moment we do this, the program ceases to be universal and becomes another welfare program that may or may not be more efficient than the programs we presently have in place.

The poor in America are poor because they either have little education or are teenage parents or have abused drugs. It is unclear whether the receipt of a pure or modified UBI will alter this disagreeable state of affairs. In other words, a pure or modified UBI may not make a dent on extreme income inequality.

Now consider the second objective of a UBI. The concern here is not income inequality per se but the absence of an income. Writers such as Martin Ford have contended that with the rise of automation and artificial intelligence, we are increasingly looking at a future with massive job losses. Fears about this kind of “technological unemployment” have arisen before and even John Maynard Keynes, arguably the greatest economist of the last century, was wrong about his fears about technology-driven unemployment. Even so, the techno-pessimists claim that with innovations in AI, this time is different and hence their solution to attenuate the human suffering resulting from joblessness is to put in place a UBI. Does this make sense? Let us investigate.

As noted by the economist Jason Furman, a key problem lies in the way in which techno-pessimists pose the issue. The issue is not that automation and AI will make a vast majority of the U.S. population unemployable. Instead, the issue is that workers will either lack the skills or the ability to match with the high paying and desirable jobs created by automation. When the issue is looked at in this way, the appropriate solution is not to provide all workers with a UBI. Instead, we need to put in place training programs, job search assistance programs and specifically programs that enhance worker skills. The objective here would be to ensure that qualified workers are able to match the requirements of the new and different jobs resulting from automation and the rise of AI.

Finally, even with the above mentioned measures, new technologies and automation may still increase income inequality and poverty. Our present tax and welfare policies are designed to reduce income inequality and poverty because they target people in the bottom half of the income distribution. If we replaced these policies with a UBI that went to all citizens regardless of their income then there would be no targeting of citizens in the lower half of the income distribution. As such, a UBI might even worsen the problem of income inequality. Therefore, when it comes to a UBI, Shakespeare’s caveat that “All that glisters is not gold” is pertinent.

Batabyal is the Arthur J. Gosnell professor of economics at the Rochester Institute of Technology but these views are his own.

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or email [email protected].