Universal Basic Income-Let’s Have a Conversation-Part one

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I wrote a post recently called An Economic Wakeup Call. In it, I suggested that our present form of capitalism is no longer viable. Scenes of long traffic jams at local food banks are now becoming commonplace. Never did I think that in the United States of America, the wealthiest country on the planet, would we ever see such a thing.

I argued that it’s way past time for us as a society to take a long hard look at our economic well-being. Because based on what I’m seeing, what we’re doing now is not working. Not only do we need a more compassionate and humane economy, but also one that works for everyone, not just a select few. Haven’t we had enough of trillion-dollar tax cuts that never seem to trickle-down to the rest of us?

So what can we do? Indeed, a higher minimum wage would go a long way towards eliminating some of the massive income inequality we’re experiencing. The idea that the federal minimum wage hasn’t changed since the Bill Clinton administration, beyond a pathetic $7.25/hour, is a disgrace. Luckily some of the states have implemented their own increases. Individual cities like Seattle, WA, for example, set the gold standard of $15/hour for their minimum wage.

But minimum wage increases and tinkering around with the tax code are no longer enough. It’s time to take a look at bolder policies and proposals. One such plan, popularized in recent months by one-time presidential hopeful Andrew Yang, is called the Universal Basic Income (UBI).

While I had a general idea what UBI was all about, I must say I never took it seriously when Yang spoke about it on the Democratic debate stage. The idea that we were going to give every American $1,000 a month, regardless of income, was crazy talk. How in the hell would Americans accept something like that?

It’s funny how one’s perspective changes, however, especially now that we’re in the middle of not only a public health crisis but also an economic calamity, the likes of which we haven’t seen since the Great Depression. No longer do I think UBI is a pie in the sky economic proposal. I think it’s time for a conversation. ‘Thinking outside the box’ is a quaint phrase for doing something bold and innovative. If not now, when?

But first, a quick caveat. I’m in no way advocating for, or against, UBI. I want to know more about it and whether it’s even feasible. So let’s take a look at what UBI is and whether America is ready for such a drastic realignment of its economy. As with anything, there are pros and cons to the proposal. Most of the numbers and figures cited in my post are courtesy of the article, What is Universal Basic Income and Could it Work in the U.S., by Amy Livingston in Money Crashers.

What is UBI?

While there are different variations to what a universal basic income would look like, for purposes of this post, we’ll go with the one that most are advocating for: Every adult citizen would receive a fixed monthly or yearly payment with no requirements attached. Yes, that would mean even billionaires like Bill Gates and Jeff Bezos would receive the stipend just like everyone else.

Those in favor of UBI argue that it would provide an efficient and effective way to fight poverty and improve people’s lives. It could also simplify the process by which many Americans have to navigate when times are tough. While we have several social safety net programs available from the government, the hoops and rules you have to jump through make it hard to get the help you need when you need it. UBI would be there all the time, regardless of your situation.

Many politicians on the left have expressed support for some form of UBI, including Bernie Sanders and Alexandria Ocasio-Cortez. Hillary Clinton also considered advocating for the policy during her 2016 run for the presidency but abandoned the idea when she determined it was cost-prohibitive. And while the cost is undoubtedly one of the most glaring roadblocks to implementing a UBI policy, when you look at how much we spend on current programs UBI would replace, it’s not quite as bad as it appears.

Are there current experiments with UBI?

The short answer is yes. Since 1982, the state of Alaska started the Alaska Permanent Fund, which gives all residents a yearly dividend from the state’s oil revenues. In 2018, the amount of that stipend was $1,600, but it varies from year to year. While not nearly as ambitious as Yang’s proposal, it still helps many low-income residents with a little help they can count on an annual basis.

In California, the City of Stockton has a more ambitious program that targets 125 randomly selected residents to receive $500 per month for 18 months. An initial report on the plan is due sometime in 2020. Y Combinator Research, a tech firm in Oakland, is also experimenting with a UBI test, sending $1,000 monthly checks to 1,000 randomly selected low-income people across two states for the next three years. The firm is planning to conduct regular surveys to gauge the effects of the extra payments on the individuals’ health and overall well-being.

So while it’s pretty early in the game to predict the success or failure of a potential UBI in America, we see some attempts to at least get a sense of whether we should ever try it on a broader scale. Other countries such as Finland, Canada, India, and Uganda have been attempting varying aspects of UBI, with mixed results so far.

No matter what we decide to do in America after the current pandemic tragedy is in our rearview mirror, the concept of UBI will surely be part of the discussion. In the coming days, I’ll analyze the arguments for and against the proposal, as well as how we would pay for such a plan.

Stay tuned.

40 comments

  1. It’s funny how a major event can change your viewpoint. I never really gave UBI much thought before, but now I am. Personally, I’m not sure I’m in favor of UBI, but maybe UBI for those who need extra income (people who earn below a certain level of income). But I’ll be interested to hear what you say.

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  2. This is one that … I see far too many pitfalls. First, can you imagine the republicans and even some moderates screeching like wild banshees? Second, I think that if we implemented such a thing as UBI, I would prefer to see it going only to those below a certain income level, say $75k per year. The wealthy damn sure don’t need it, and already they are paying no taxes, so why should they get something for nothing. Even people like myself … we don’t really need it. But those below a certain income level need it desperately, and i might be in favour of it, if the wealthy actually started paying taxes so we could afford it, under those conditions. But, sigh, until Citizens United is overturned, if it ever is, and tax cuts for the wealthy repealed, I’m not holding my breath. This is not a nation that cares about people … sadly.

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    1. Yes, I’m still kind of coming around to it Jill. This latest crisis shows just how fake Trump’s so-called great economy was. Sure, it was good for some. For about half the country though, it’s paycheck to paycheck. There are many variations of it, and I will get into it in a later post. But you’re right, with Republicans still lurking around like little parasites, something like this is not even close to being looked at. But, who knows? What we have now is NOT working.
      Thank you for reblog Jill!!

      Liked by 1 person

      1. I think it’s rather like everything else … baby steps. ‘Tis what Obama was trying to do with ACA … take the first baby step to a Universal Health Care plan … and it was working until somebody let an uneducated, crass, cruel, Soviet tool into the White House and gave him a blank cheque. Sigh. My pleasure Jeff … you do good work, as always. And it is a conversation we, as a nation, need to have!

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  3. I tentatively favor UBI. Clearly the country was not ready for it when it was first proposed. Perhaps it will be more ready now, though I doubt it.

    From my perspective, I see it as a way of adapting to automation. We have increased worker productivity because of automation, but most of the benefits of that have gone to people at the top. UBI would be a way of spreading the benefits more fairly. Increasing automation means fewer jobs. And UBI compensates for that.

    If we were using UBI, then COVID-19 would have had a far smaller economic impact.

    With UBI, we would not have to ship so many jobs overseas. People could be employed here at salaries competitive with China, if we only had to give them incremental pay on top of the UBI.

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    1. Yep, totally agree Neil. I’m coming around to the idea. Not there yet totally, but way more than I was before. All your points make sense. In our political climate, however, I realize it’s far down the line for this to even get discussed in Congress. My hope is that changes. Sooner, rather than later. We’ve got to address the inequality. It’s unsustainable….

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  4. Previously, I would have dismissed the idea and given it no further consideration. I guess I’m a bit more open-minded now. Eager to read Part 2.

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  5. I’m retired. But back in my younger days I would have been all for UBI. That’s because I’m lazy. I would have taken my monthly stipend and lived on a shoestring, happily unemployed. Perhaps after some years of boredom I would have gone back to work, but I’m not sure. But if I was participating in one of the experiments you’ve mentioned, I would not quit my job, because I would know that this is just a temporary UBI. So I’m not sure the experiments can capture the full impact of UBI upon our society.

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    1. Thanks for commenting Tippy. Good hearing from you. Yeah, there are many pros…and of course, many cons to this. There’s just not enough hard data on it. And many who’ve tried it in other countries, have given up on it due to the overall high cost. Maybe some kind of hybrid approach? We’ll see. I’m definitely willing to have the discussion though. What is clear above all else is that millions of people are simply not prepared to handle something of this magnitude. Basically, it’s living life hanging by a thread. That’s no way for people in the richest country in the world to live.

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      1. At least we’re hanging on by a thread. I’ve heard that in Africa, some are having risk the coronavirus and being shot by the army, in order to work and feed their families.

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      2. When things get tough in my life I always say…somebody else has it much worse. Brings me back to reality a bit. That’s very sad and tragic what’s happening there.

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  6. UBI, or what we would call Guaranteed Monthly Income in Canada, was studied at least as early as the 1980s, and more Canadians were for it than against it. But, of course, the idea was doomed for failure. Our politicians were afraid to put their names on the passage of such a bill. Like in the USA, our governments are mostly bought and paid for by the top 1%. They thought GMI would cause everyone to stop working and they would not have any wage slaves to do the grunt labour.
    Whatever you want to call it is a social necessity. Poverty creates all kinds of situations, including crime, child abuse, spouse abuse, alcoholism, drug addiction, poor health, ad infinitum. Ahll these things cost a capitalist society a fortune every year. How much would UBI or GMI cost the federal government? A helluva lot less. I’m not going to sy all these social problems would disappear, but they would be ameliorated at the start, and decrease noticeably the longer the program lasts.
    How much stress is relieved when you take away the worries of food and shelter? How many single mothers are going to bring up their children in more stable homes? Crime numbers would fall for those who commit crimes out of need (well, maybe not in the USA, where most everyone wants more than their fair share!) or other outside pressures. Poor people would have a better chance at fulfilling work if they are not forced to take whatever job comes their way. Nations with UBI would become happier societies. Suicide numbers would even fall. Jails and prisons would have way less inmates. The legal system would not be overburdened anymore–in fact there would be less need for so many lawyers, judges, and probably even police. Racial tensions would ease as more people feel safe.
    “Safe, a happy world, for happy children.” (Collectors, What Love (Suite), 1968

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    1. I tend to agree with you rawgod on all your points. Really it comes down to implementation, cost, who gets it and who doesn’t, and do we cut other social programs in order to do it? With the current makeup of Congress, you’re right, the 1% crowd controls most of what they do. That’s what is needed more than anything else. Change our campaign finance system, the revolving door of lobbying etc…and then we can start to have a conversation about UBI and other things. Until then, it’s gonna be hard. I’m certainly much more open to UBI, though. How can I not be?

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  7. Well said. To my way of thinking, a UBI would be a logical step up from the basic social contract that says individuals give up some of their freedoms in order for all members of the society to be safe. If we can’t/don’t do that, why bother with a society in the first place?

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  8. Variations of UBI have been around as proposals since the 1930s at least. I remember studying it, and advocating for it, in the 1980s. Some say that by guaranteeing an income for everyone you actually help business by relieveing them of the necessity to pay a living wage. On the other hand, if people can get by without working, employers need to make work more attractive in order to get employees at all.
    One way to see how individuals in receipt of it might behave is to look at what lottery winners do. And what the wealthy do – most of them keep working despite having the means to live in comparative luxury whilst doing nothing.
    Neil Rickart’s point about automation is how it was proposed back in the 1930s – a way of providing all citizens with what was then called a “Social Dividend” arising from increased productivity. Of course, things like universal health care and the wider availabilty of education beyond grade school, in jusidictions where such things are provided, are also a form of social dividend. In a country that finds it difficult to contemplate universal health care, or proper funding for public education, it seems unlikely that UBI would gain much traction.

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    1. Unfortunately, you’re right Frank. It does seem highly unlikely, especially now with the government running up such huge debt and deficits that will take years to ever get under control. The way it might gain traction, however, is if you tell the conservatives that we will take some of the current social safety net away…maybe welfare, food stamps, etc…to help pay for UBI. It’s a tradeoff they may be willing to take a look at. But with the current right-wing philosophy taking hold these days, it’s probably not going to happen. It’s worth exploring though. Shoot, anything at this point is better than the alternative.

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    1. You were ahead of the curve Jim. Excellent piece, and the arguments for UBI are certainly compelling. And that’s why people like you and I are willing to discuss it. This is how things start to take shape. Blogs like ours can be sort of like incubators for discussion and ideas. Before you know it, maybe it starts to take hold. I think Yang did us all a favor by making it the centerpiece to his campaign. At the time, I was like, no way! Now, I’m much more open. Getting conservatives on board? That’s a whole other discussion….

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      1. it is certainly an interesting issue. I did like that Yang brought the idea to the masses, and I hope some of the UBI experiments taking place are successful. And you are right, some people will be harder to convince than others. By the way, one of my students who has his own blog, wrote about UBI last year, in case you are interested. It’s nice knowing that there are such thoughtful 20-year olds out there! https://thejawesomelife.blog/2019/08/02/the-fear-of-ubi/

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      2. Thanks for that Jim. I hadn’t thought of his idea about tying it to giving back to society. Something else to ponder!

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  9. Jeff, this is something worth exploring and should not be dismissed without such. Often, we paint issues like this as either/ or, but it should be discussed in a larger context about the proper balance we have in our country over fettered capitalism and socialism (which we do have in Social Security, Medicare, Medicaid, Food Stamps, Workers Comp, unemployment, etc.

    It would require an accounting of what we spend and where we spend it. It would necessitate a discussion on what should be asked of citizens in return. It would also need to be reflective of avoiding disincentives to work for some.

    Using the COVID-19 example, with the president naysaying the pandemic risk early on, even as intelligence people were briefing Congress on such a risk, we missed a six week period to plan. With planning, we could have done what the UK did and incent employers to keep people on the payroll rather than let them go. The surety of a job would help immensely with America’s psyche. Now, we are paying unemployment which is fine, but some can make more not working.

    This is a complex topic and deserves a complex analysis. The same could be said for Medicare for All. I am not saying we do either, but they are worthy of exploration sans politics.

    Keith

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    1. Thanks for the excellent observation Keith. Yes, it’s all about tradeoffs, isn’t it? What do we do with the present social safety net? Do we keep some of them? Get rid of most? It’s very complex, for sure. That’s why I want to learn more about it. Like I said in some of my replies to others, the chance of it happening in the current political climate is slim to none. But, maybe in a few years, who knows?
      One other thing. Part of the reasoning for giving it to everyone, even the rich, is that it would get rid of the stigma that we have a bunch of ‘takers’ in our society. In other words, the guy in the mansion over here gets it, just as the guy who’s living in a one-bedroom apt. It would have the affect that nobody is taking advantage of the system. I know some of my Republican friends continue to pound that subject over and over to me..that they’re tired of all the low-life deadbeats taking government handouts. Perhaps UBI would go a long way towards ending that narrative? Just a thought.

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      1. I personally don’t agree with giving it to the rich. The old adage of the rich get richer and the poor get poorer has been embedded within society for far too many years. IMO, to think that UBI will level the playing field just seems too idealistic to me.

        Instead, I tend to support Jill’s suggestion of a cut-off point .

        One thing is pretty certain … the group think of those who would be in a position to enact such an action would definitely have to be progressive.

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      2. I like the idea of a cutoff point too, Nan. There are many ways we could do it. Just not so sure which one is best. All of them have drawbacks and upsides.

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      3. Jeff, having been a Republican and helping homeless working families, the GOP belief that there are a host of malingerers is not based on data. Yes, there are malingerers, but they are not a large percentage.

        It is governing by anecdote example. If we know of one, then it must be prevalent. It is not.

        When I used to speak to rotary and church classes to raise awareness for homeless families, I had to deal with more than a few folks who has a hard time understanding these folks had jobs. Keith

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  10. It’s really frustrating Keith. And that mindset seems to be getting worse, not better. But, with Trump in charge, it’s not surprising in that he is the master of scapegoating. While Reagan and others were a little more subtle about it….Trump takes the ball and runs with it. Nobody in history comes close to him in this regard.

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  11. Thanks for starting this discussion. You may be interested in the sources and arguments I’ve assembled in my new book, Social Security Basic Income: A Safety Net for All Americans (https://www.amazon.com/gp/product/B085Q1FL2D/ref=ppx_yo_dt_b_d_asin_title_o01?ie=UTF8&psc=1). I propose to eliminate the payroll tax and replace Social Security with a basic income guarantee paid for by eliminating most tax expenditures and raising income taxes on high income individuals and households.

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    1. Me too Kim. So many people and small businesses in this country could barely last a week or two after the economy pretty much shut down. It’s just unconscionable. I don’t know if it’s the answer. But it’s time for a real debate.

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