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Op-Ed

The case for a universal basic income

By now you’ve heard rumblings of the policy idea known as “universal basic income.” This is the notion that the government should give every citizen enough no-strings-attached money to cover basic living expenses.

In the last year alone, Mark Zuckerberg called on Harvard’s graduating class to “explore ideas like universal basic income,” Elon Musk told a gathering of world leaders in Dubai that “some kind of universal basic income is going to be necessary,” and President Obama remarked that universal basic income is a subject we’ll be debating “over the next 10 or 20 years.”

Though universal basic income, or UBI, has become downright trendy in Silicon Valley, the concept is not actually new. Thomas Paine proposed a basic income for every citizen as early as 1792. Milton Friedman and Martin Luther King Jr. endorsed the idea in the 1960s as a way of fighting poverty. In 1971, a basic income for poor families almost became law under President Nixon.

But the idea is gaining unprecedented traction right now with good reason. The U.S. economy is increasingly unstable, with wealth accruing at the top while most Americans remain stuck in low-paying jobs. Globalization has weakened the power of labor unions, squeezing the middle class and narrowing paths into the middle class for the poor. Economists have chronicled the rise of the “precariat,” a growing class of workers who rely on insecure gig work with few benefits. And we haven’t even begun to feel the brunt of that other looming threat, the A-word. According to an Oxford University study, nearly half of all Americans – 47% – are at “high risk” of losing their jobs to automation.

Although economists are still debating whether automation will ultimately devastate the American labor market or not – many point out that previous economic transitions created as many jobs as they destroyed – few dispute that such transitions were extremely painful for workers. We know that most of the American workforce currently lacks the skills required for the jobs of the future, and costly retraining programs have failed to close this gap. For all these reasons, establishing a universal basic income is the only real way to help Americans weather the widespread disruption that automation is sure to bring.

There are competing ideas about how exactly the policy should work. Advocates on the left call for a UBI that would increase benefits to the poor and be financed by increasing taxes on corporations and the wealthy. Conservative advocates favor an approach wherein programs in the current safety net, such as Social Security and food stamps, are replaced with a UBI. Others favor an incrementalist policy in which current safety net programs are expanded to include all Americans, while another faction wants to build a UBI program from scratch. Despite their differences, all approaches to UBI policy share the core goal of establishing an income floor for every American.

An income floor would help American workers in a number of critical ways. Relieved of the immediate pressure to pay bills, workers could pursue training for the kinds of jobs that automation will bring. A universal basic income would allow skilled workers to take entrepreneurial risks they cannot afford now. It would also allow Americans to work fewer hours but maintain their living standards, leaving more time for caregiving and raising children. Overall, UBI would provide a significant boost to the American middle class, which has stagnated even as productivity and overall wealth continue to rise. By putting more money into the pockets of workers, a UBI could fuel aggregate demand and job growth in different sectors across the country.

Momentum is building. Child poverty experts in growing numbers have called on states and the federal government to consider a child allowance – UBI for kids – that would help level the playing field for low- and middle-income families. The California Senate is considering ambitious cap-and-trade legislation that would send “climate dividend rebates” to every citizen. Even some oil companies are in favor of schemes to tax carbon and send checks to every American.

This month, Hawaii’s Legislature unanimously passed a bill that directs state agencies to study UBI as a way to provide financial security to all Hawaiians. This landmark legislation could pave the way for UBI to move from the realm of fantasy to reality. Other progressive states, including California, should follow Hawaii’s lead and prepare their citizens for our uncertain future.

Sebastian Johnson is a senior associate with Freedman Consulting, LLC. In 2016, he delivered a TEDx MidAtlantic talk, “The Case for Basic Income.”

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