The idea of a universal basic income – a flat cash payment to all citizens regardless of merit – isn’t a new idea, but it’s one that has been catching steam recently in the United States amidst stagnating wages and price inflation. Despite the relatively robust economic recovery in the wake of the 2008 financial crisis, economic inequality has increased and those on the low end of the economic ladder have reaped little benefit.
Early advocates of a universal basic income, or UBI, hailed from both ends of the political spectrum, from Richard Nixon to Martin Luther King. Two such advocates were famed conservative economists Friedrich Hayek and Milton Friedman. Friedman, who called his idea a “negative income tax,” argued the a UBI would reduce government bureaucracy and remove discrimination from the modern welfare state.
Social Democratic programs reduce complexity
When programs are means tested, like food stamps and Medicare, they come with a laundry list of innate problems. It’s very difficult to decide who gets what, and that leads to added layers of bureaucracy just to administer the most basic social program. This leads to both people taking advantage of the benefits and qualified applicants being turned down. Anytime a program is being administered by federal bureaucrats, mistakes occur.
Means-tested programs are also subject to change, and change they do. Tweaks to Medicaid and food stamp budgets are always being made, and that inconsistency has a very real impact on those who rely on them. Qualifying requirements and budget funding can change drastically depending on who’s in Congress and who’s in the White House. A Ted Cruz Presidency would look very different for welfare recipients than would a Bernie Sanders Presidency, for example.
Social Democratic programs, on the other hand, are much simpler and reduce administrative burden. When everyone receives the same benefit regardless of income, employment, gender, and race, efficiency is increased and bureaucracy reduced. We have a very real example of this that millions of Americans benefit from every single day called Social Security. Social Security currently keeps more than 25 million people out of poverty, and the efficiency and effectiveness resulting from its nondiscriminatory application make it the most effective anti-poverty program in the country by far.
A universal basic income would function in the same way, except the benefits of Social Security would be expanded to cover all American adults rather than just the elderly. Like Social Security, it wouldn’t limit the way people could spend their money in the way that benefits like SNAP do. This would allow families the flexibility to cover expenses like healthcare.
The forces of automation are going to drive millions out of the workplace
Ever increasing technological progression displacing jobs has long been a fear in America. The impacts could be enormous. Driverless vehicles will impact the more than 8.7 million employed in truck driving related jobs, robotics could displace 3.7 million fast food workers, and computerization will cut into 1.4 million construction jobs. All in all, researchers at Oxford estimate that 45 percent of all U.S. jobs are vulnerable to computerization within the next 20 years.
The takeaway from these numbers is, and has been for a while, quite obvious. We can’t create jobs forever. The United States already creates well over a million jobs per year just to keep up with the rate of population growth, and now we have automated jobs as an extra burden.
Automation doesn’t have to be a bad thing. In fact, creating more efficiency in the market is a positive. Driving down the price of goods and creating increasing productivity means individuals can live more comfortably and businesses can grow. That being said, automation needs to be supplemented. If we don’t have a system in place whereby people can afford to live despite losing their job to mechanization, poverty will skyrocket and wealth inequality will utterly destabilize the American economy.
America is massively overworked
When talking about American labor, we still discuss the 40 hour work week, but that notion has become an outdated relic of the past. 4-in-10 Americans now work 50 hours a week or more, and the national average sits at 47 hours. We work longer than anyone else in the industrialized world. We take less vacation and retire later, too.
America’s stagnating wages and steep healthcare costs mean people have to continue to work longer hours and take less time off, and that’s created a crises of bargaining power in the American labor force. Job mobility and relocation are luxuries no longer afforded to millions of low wage workers.
Unfortunately, Americans being overworked creates devastating feedback loops. The stress and lack of sleep that comes along with working long work weeks leads to more trips to the hospital, and the cost of more trips to the hospital requires working longer. Women taking on more responsibility in the workplace requires babysitters and daycare, and the cost of babysitters and daycare requires working longer.
Child bearing and family responsibilities are becoming too heavy a burden to bear
Although UBI has been at the forefront of public forums in recent years, even the most faint static from the UBI transmission has yet to reach the halls of a Congress tuned only to the station of lobbyists and big business. Of course, UBI isn’t the only option we have to fight poverty and stabilize the labor market going further, but Congress isn’t considering the alternatives either. Instead, they’re fighting over drug testing food stamp recipients and again raising the eligibility age for Social Security.
As a result, it seems a self-evident truth that Congress won’t address the looming danger of automation and labor shortages until they are well upon us. In the meantime, average American workers have little choice but to continue working even longer and harder to try to make ends meet. We’ve already seen the breakdown of the American family recent years, from high divorce rates to both spouses working multiple jobs to put food on the table, and it’s surely going to get worse.
A lot of people suffer in this arrangement. Businesses get worse productivity from mentally and physically drained employees, and the employees are more stressed and get less time at home. Hurt most, however, are the children. Less time spent with more stressed parents at home means poor parental nurturing, fewer vacations, stunted educational growth, and more unguided social learning. For all the valuable services that daycare’s provide, the one on one times that children need with their parents through their adolescence is vital to any child’s maturity process.
A UBI would give parents flexibility to take time off when necessary as well as giving them the freedom to seek out more profitable employment in the market. It would mean more parents would be able to stay at home with the kids either full time or part time, and that would have profound impacts on the next generation of children. The result would be a generation who was better socially adjusted, more educated, and more emotionally stable. The future implications of the impact on young people can be taken to various extents, from a future of educated entrepreneurs to a less violent generation, but regardless of how far one is willing to go, we universally agree we want our children to be educated and ready for the world.
The UBI would be good for all parties involved
At the end of the day, the UBI is about market elasticity. Giving consumers more buying power and expanding the middle class benefits all of us. Business could cut costs and automate their services without destroying millions of jobs, individuals would have more money to spend in the marketplace, and families would be strengthened by spending more time at home and less at work.
A UBI would have secondary and tertiary effects as well. Less time spent stuck in work traffic means a decrease in carbon emissions. Shorter work weeks would lead to less time grabbing quick fast food and more time spent eating home cooked meals, an important step towards curbing America’s obesity epidemic. Lower stress levels expands lifespans, reduces violence, and increases productivity.
Automation and climate change are going to disrupt the labor market whether politicians like it or not. That much they have little control over. What they do have control over is how they’re going to respond to the crisis. Forcing Americans to work harder and take home less is only going to make the problem worse. A universal basic income would make it a lot better.