I have to give Thomas Foley credit for trying to think outside the box in his opinion piece Capitalism Isn’t Working for the Poor—Let’s Try Something Else. Unfortunately that’s all the credit I can offer because he based his idea on some faulty assumptions and managed to propose a solution which is quite probably worse than doing nothing. (That is quite the accomplishment when starting with a system that has become as unbalanced as ours.)
First let’s recognize his two accurate concepts:
- Our system isn’t working for the poor.
- Ill designed interventions act as a parking break on economic potential.
Foley proposes “a two-track system that provides a free-market system for those who thrive in it and another system for those who don’t.” He goes on to clarify that at least 70% of the population would be in the free market system while up to 30% could opt into the alternate system. This exposes his assumption that at least 70% of the population is thriving in the free market.
That assumption stands in stark contrast to the statistic that more than half of the population cannot weather even a single $1000 emergency. I’m not sure how Foley would define thriving but if he thinks being one minor emergency away from debt counts as thriving he needs a new definition. If he doesn’t think so then his plan is to have a lot of people who aren’t thriving stuck in the free market system where they already aren’t thriving.
I assume he got his 30% benchmark based on the fact that 30% of our population is currently receiving benefits from one or more government assistance programs but again, he already agrees that system isn’t working and he is proposing to stratify it so that only a relatively static 30% of the population can receive such benefits. His system fails to account for the fact that while ~30% of the population is receiving benefits at any given time, 55% of Americans receive those benefits at some time.
Finally, Foley proposes that young adults choose at age 20 which track they want to participate in. It seemed somewhere between irresponsible and cruel to require that with virtually no life experience young people recently out of high school must choose between having a government stabilized income so long as they are working, or hoping for higher wages in the free market system while being excluded from access to things like a child tax credit or nutritional assistance. While he would allow them to change their choice once within the first 10 years that is still a limited amount of life experience and all of these choices would be conditional on not exceeding 30% of the overall population on the government benefit track.*
Foley emphasizes that this program is “distinct from a Universal Basic Income because it isn’t universal” but I guarantee that for the same net cost of $535 billion a year that he estimates his program would require we could provide a universal basic income large enough to ensure that everybody can weather an unexpected $1000 emergency or scrape by with an unexpected job loss even when having to wait several weeks before their unemployment checks can arrive (if they even qualify).
* Foley indicates that the stabilized income wages would be adjusted annually to maintain the ratio which suggests that the more people who want that security the lower the wages would be.