Updated July 27, 2021
The Problem
Around 10% of Americans are chronically poor or near-poor. Many more experience transient or periodic hardship. For example, over a quarter of Americans fell below 200% of the federal poverty level in 2019. And per a survey conducted by the Urban Institute, 4 in 10 respondents reported they struggled to meet at least one basic need, such as food, housing, or health insurance.
Even if they make enough to pay the bills, a good number of Americans feel stuck in dead-end jobs, unable to move up the economic ladder or find more meaningful work because they lack the necessary education, skills or work experience. This was the sentiment expressed by over half the respondents in a large and comprehensive 2019 study conducted jointly by the Lumina Foundation, the Bill & Melinda Gates Foundation, Omidyar Network, and Gallup.
That’s the problem on the micro-level: unhappy and struggling individuals and families. On the macro-level, we have a mismatch between worker skills and employer needs, which has led to chronic labor shortages - especially in the better-paying fields. According to the latest ManpowerGroup Talent Shortage Survey (the largest of its kind), “Attracting and retaining skilled workers has rarely been more challenging as 69% of U.S. companies report talent shortages – the highest in over a decade”. These shortages not only hurt the company’s bottom line, they undermine labor productivity and economic growth. And the problem’s only going to get worse in the decades to come unless this country comes up with better ways to help people update their skills as needed to meet ever-changing employer demand.
Lifelong learning on a mass scale is in order.
The Challenge
Alleviate poverty
Incentivize skill development
Increase social mobility
Decrease income volatility
Increase labor market participation
All without raising taxes very much
All without adding to the public debt
The Proposal
Adult Student Basic Income: $1000/month up to six years total for adults enrolled in postsecondary training and education programs, such as:
College Classes
Adult Education
ESL Classes
GED/HS Diploma Programs
Job Readiness Training
Vocational Training
Online Classes
Modular Courses
On-The-Job Training
Internships (Paid or Unpaid)
Apprenticeships
Funding
The Adult Student Basic Income (ASBI) would mostly pay for itself through reduced spending on other government programs, such as Pell Grants, Federal Student Loans, and Supplemental Security Income (SSI). The ASBI would not impact eligibility for some non-cash benefits such as housing and Medicaid, as well as any aid meant for children. However, ASBI recipients would have to pay somewhat more for their Medicaid premiums.
A 1% payroll tax would also add to the ASBI coffer. Benefit and revenue requirements would increase incrementally in line with inflation.
Requirements
American citizens or eligible non-citizens between 18-64
Approved institutions and programs only
Minimum 9 hours a week participation
Minimum one month participation at a time
Periodic participation and performance confirmation
A registry would be compiled from existing regional and state agencies that oversee and accredit or approve postsecondary institutions and programs. Participation would include time allotted for homework, based on information from training and education providers. For instance, a standard college course generally involves about 3 hours of study time for every unit of credit, so taking 3 units of college coursework would be enough to qualify.
Performance requirements would vary according to the institution, class, or program. As a rule, one would be required to get a passing grade or certificate of participation confirming that at least 9 hours a week of class/training and homework had been satisfactorily completed during the period of review. Those not meeting performance requirements would have their ASBI suspended until they submitted documentation of having completed the required (or substitute) coursework or training.
Perks
The ASBI would not be means-tested, so recipients could work part- or full-time. Although the ASBI would replace federal student aid programs, state aid programs would not be affected. Unlike Pell Grants, the ASBI would not drive up school fees because it would turn students into cost-conscious consumers. It’s their money, so the more they pay for school, the less available for other expenses. The ASBI would also make students think twice before choosing an expensive private school when a cheaper but a perfectly adequate public option is available.
Plus, the ASBI would increase the psychological well-being of its recipients, partly by decreasing financial stress and partly by increasing personal agency: the sense of control and competence that comes from achieving goals by one’s own efforts.