During the coronavirus lockdown, the idea of having a universal basic income for all US citizens has arisen. During the Democratic primaries, the main advocate for Ubi was Andrew Yang.
Communism is dead. And Democratic socialism is not far behind. But with millions of people out of work and millions of businesses being destroyed by the government, the notion of Ubi may take effect.
UBI is also called universal basic income, citizen’s income, citizen’s basic income, basic income guarantee, basic living stipend, guaranteed annual income, or universal demogrant, provides income to all on an individual basis without a means test or work requirement.
The long discussed but newly urgent policy proposal of UBI has received increased support over the past year. Former presidential candidate Andrew Yang made UBI the cornerstone of his candidacy.
A universal basic income, or UBI, is a fixed income that every adult—rich or poor, working or idle—automatically receives from the government.
Unlike means-tested or earned benefits, payments are usually the same size, and arrive without request. Depending on who designs a given system, they might replace all existing governmental assistance programs or complement them, as a wider safety net.
Andrew Yang stated that if elected President, he would “enact the Freedom Dividend: $1,000 a month, no strings attached, for every American 18 and older, paid for by a new tax on the companies benefiting most from automation.”
While some advocate UBI as a way to reduce poverty, others view it as an answer to the risk that AI and automation eliminate millions of jobs in the future. This will happen. With the Advent of driverless trucks in the near future up to 800,000 American truck drivers may lose their jobs.
With all the anger and rioting around the US, no one is addressing the long-term issue of no jobs which is coming no matter what we think from automation.
The economic crash is not done. What we don’t know is when full recovery will happen if ever.
The growth of income and wealth inequalities, the precariousness of the job market, and the persistence of abject poverty have all been important drivers of renewed interest in UBI in the United States.
UBI has roots in social democratic, anarchist, and socialist thinking.
The UBI idea itself stretches back to the 16th century, when Spanish-born humanist Juan Luis Vives stated: “Even those who have dissipated their fortunes in dissolute living — through gaming, harlots, excessive luxury, gluttony and gambling — should be given food, for no one should die of hunger.” (1526)
In 1797, American revolutionary Thomas Paine advocated for a “national fund” in the pamphlet “Agrarian Justice.” Every American would be awarded 15 pounds sterling when they turned 21, with another 10 pounds per year after age 50.
Even Martin Luther King proposed UBI.
In his final book, “Where Do We Go From Here: Chaos or Community?”, King stated that “no matter how dynamically the economy develops and expands it does not eliminate all poverty.”
We have seen this recently and the rioting and looting that was sparked after the killing of George Floyd. This is the first time in our history that looters have been walking out of stores and $200 shoes carrying $1,000 iPhone.
Hence the need for the nation to create full employment or guaranteed subsistence incomes.
The biggest obstacle to UBI is the loss of jobs at the federal, state, and local levels of the useless bureaucrats who qualify you for programs or who pass out the checks.
The concept of universal basic income is a government guarantee that each citizen receives a minimum amount of money.
Between 1974 and 1979 in Winnipeg Canada, an experiment was done in UBI.
The “Mincome Program” gave residents in the city of Winnipeg and the smaller nearby town of Dauphin additional monthly income based on their income levels.
Hospitalization rates fell by 8.5%, high school completion rates went up, and new mothers could afford to stay home with young children. Few people stopped working — one of the key fears cited about universal basic income.
In America, we always assume that the people who would receive UBI would use it unwisely. That’s why every aid program that’s ever enacted has more strings attached than anybody can count.
“Now what it seems to me you ought to do is to give people money instead of a whole lot of separate little baffles and get rid of the bureaucracy that is involved in all these programs…If we want to say we’ll give you money only if you use it to buy toothpaste and not for anything else, that’s our right [as taxpayers] but I think we are very unwise to exercise it.”
~ Milton Friedman
In studies around the world, the poorest of people always use the income they receive from programs like this for food, health care, and education of children.
But without a doubt, the fear that automation may displace workers from the labor market at unprecedented rates explains the revival of the policy, including by many in Silicon Valley.
As in China, no government wants to deal with huge numbers of unemployed young males who have no chance to earn a decent income and start families.
During a recent Chinese building boom, the Chinese had to build the equivalent of a new Houston every month to handle the number of young men that were moving from the countryside to the cities.
If you give everyone a payment equal to the poverty line, no one will have to live below the poverty line. This is the simplest argument in favor of universal basic income.
“There is no reason why in a society which has reached the general level of wealth which ours has…that the security of a minimum income should not be guaranteed to all without endangering general freedom.”
~ Friedrich Hayek
It won’t be tried in the U.S., but it’s an intriguing idea.