Eliminating Poverty in the U.S. Would Be Very Easy — if Not for Politics

Image by Nick Fewings, courtesy of Unsplash

By Brett Pelham

Being rich can’t buy happiness. But being poor sure can buy misery. Psychologists and economists agree that this is true because the connection between wealth and well-being is curvilinear. A person making $2,000 per month is usually much happier than a person making $1,000 per month. But a person making $12,000 per month is not usually much happier than a person making $11,000 per month. To a very poor person, a thousand-dollar monthly raise is life-changing. To an upper-middle class person, the same boost in income is a remodeled kitchen. This means that to increase national happiness, we should greatly increase the income of the very poor. A guaranteed minimum U.S. income — not unlike the universal basic income you may have heard about from Andrew Yang — would do exactly this.

Many have argued that simply giving money to the very poor would remove the usual incentive to work. A recent study in Finland attempted to test this idea — by giving about $640 per month (for two years) to Finns who had long been unemployed. The hope was that this would increase employment. This did not happen. For this reason, the Finnish study has been widely panned as a failure. But the modest Finnish income treatment did increase two things — the happiness and the physical health of those who…