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George Floyd’s life mattered. Like Ahmaud Arbery, Breonna Taylor, Tony McDade, and too many others whose names we don’t know, Floyd was stolen from friends and family members who loved him and cared about him. His murder cannot be undone, and it is our most recent reminder of the fact that white supremacy, police violence, and racism are dangerously prevalent forces in America today… Read Full Statement

Payday, Every Day: Why the Idea of Basic Income is Reemerging Today

 

In the midst of global populist backlash, nostalgia has become something of a dirty word in politics. But concurrent with this rising nationalism and political separatism, nostalgia is also doing the policy world some good. Politicians and academics have begun to unearth an old, but powerful idea: universal basic income (UBI). Sometimes referred to as a citizen’s income, UBI is a guarantee of an unconditional monetary income for all people by the state. It is not a new idea: Thomas Paine proposed one in 1797, and thinkers as varied as Milton Friedman and Martin Luther King, Jr. picked up the baton in the 1960s. Yet with a newfound rigor, countries across the globe are now experimenting with basic incomes. Part of the reason UBI has returned to the political forefront is due to new data and sophisticated economic models. But policymakers also view basic income as a response to contemporary concerns: a wave of right-wing nationalism preying upon the changing global economic reality, staggering income inequality, and the irreversible waning of the old economic order.

UBI is grounded in two basic principles. The first is the concept of universality, a rejection of the means-tested nature of most welfare schemes. In a direct sense, basic income excludes errors inherent in any targeting system and dissociates cash transfers from the stigma of welfare. The second principle is a proactive campaign against poverty. Rather than provide assistance after a family or individual has slipped below the poverty line, basic income actively establishes a standard of living below which citizens cannot fall. A well-executed basic income program makes any and all work supplementary to life’s basic demands, while also permitting citizens to refuse high-risk or dehumanizing work. Most funding schemes necessitate some increase in taxes, but basic income systems also have the potential to greatly reduce the costly bureaucracy associated with existing welfare programs.

"Richard Nixon referred to the establishment of a minimum guaranteed income as his most important legislative item in 1971. He was eventually forced to relinquish the idea after House-passed bills failed in the Senate."

Basic income schemes’ simplicity and potential have long enticed thinkers across the political spectrum. Progressives tend to focus on basic income’s moral impact. Thomas Paine called for a “citizen’s dividend” to ensure an equitable distribution of money in a world of unequal resource wealth, and Martin Luther King, Jr. believed that the government had a responsibility to ensure a basic standard of living. But formative thinkers of the right have also found merit in the idea of universal basic income. Nobel Prize winning economists Friedrich Hayek and Milton Friedman have both endorsed UBI as an alternative to the proliferation of government social programs and as a boon for market efficiency. However, support from some high-profile individuals hasn’t been enough to make basic income a reality. In the United States, Richard Nixon referred to the establishment of a minimum guaranteed income as his most important legislative item in 1971. He was eventually forced to relinquish the idea after House-passed bills failed in the Senate thanks to a conservative backlash against any anti-poverty programs and new government spending. Similar stories unfolded across the developed world, until basic income was no longer on the political agenda.

But the hibernation period is over. In January 2016, the Dutch city of Utrecht began a basic income experiment to much global fanfare. Finland is slated to begin a hybrid program this year, offering 550 euros a month to citizens while maintaining some existing social services. And most recently, on January 31, 2017, India’s chief economic adviser Arvind Subramanian voiced support for basic income and put forth a plan estimated to cut absolute poverty in the country from 22 percent to less than a half of a percentage point. Unsurprisingly, Senator Bernie Sanders has also voiced support, and UK Labour party leader Jeremy Corbyn has announced that the party will “research and test” basic income policy for implementation. The private sector has caught on, too. A whole slew of Silicon Valley CEOs also support universal basic income, with Y Combinator recently announcing that it will begin a basic income pilot in Oakland within the year.

Part of the appeal of UBI lies in new data about the effects of providing low-income individuals with cash. From 1974 to 1979, the province of Manitoba, with the aid of the Canadian government, provided a minimum income known as “mincome” to about 10,000 residents. An opposition party killed the program soon after, but in 2011 economists unearthed that found that mincome had profound impacts on Manitoban lives: Recipient families had fewer hospitalizations, accidents, and injuries. High school completion rates rose, employment remained constant, and the number of pregnancies before age 25 declined. Similarly, in 2011, UNICEF-backed pilots ran in eight villages in Madhya Pradesh, India, where everybody was provided with a modest monthly payment. Results found that most of the money was used to improve housing and latrines and to take precautions against malaria, and better health correlated strongly with better school attendance. Existing cash transfer programs around the world have also convinced academics that basic income programs can work on a wide scale. Conditional cash transfer (CCT) programs are very similar to basic income schemes; they also give money to the poor, albeit with a few strings attached. Nonetheless, CCTs retain the general principle of the basic income – cash transfers which recipients may spend as they please – and have demonstrated remarkable success across the globe, with low-income families using the money almost exclusively for housing, clothing, and food. An exemplary cash transfer, Bolsa Família, Brazil’s CCT and the largest program of its kind in the world, has been widely credited with a 15 percent reduction in extreme poverty.

"In January 2016, the Dutch city of Utrecht began a basic income experiment to much global fanfare. Finland is slated to begin a hybrid program this year, offering 550 euros a month to citizens."

But the push for basic income is not grounded purely in optimism. Certain proponents turn to it as a response to the challenges automation poses to global economy. In his farewell address, President Obama warned that “the next wave of economic dislocations…will come from the relentless pace of automation that makes a lot of good, middle-class jobs obsolete.” In an age in which computing power doubles every two years, widespread job displacement is becoming the norm. Slightly more than half of Americans hold jobs that involve regular physical labor, tasks that are highly susceptible to being automated. Moreover, an increasing percentage of global employees operate within a “gig economy,” engaging in short-term contracts or freelance work, rather than more permanent jobs.  Indeed, some 55 million Americans, or roughly 34 percent of the nation’s employed, do freelance work. And unlike in decades past, automation now threatens low- and high-skilled occupations alike, as programs will soon be able to do everything from car assembly to legal research to medical diagnoses. In this sense, basic income promises to provide security in a future with fewer and fewer jobs. As Andy Stern, the former president of the Service Employees International Union argues, “It would be criminal not to at least plan for the possibility that this kind of radical change – a future with fewer and fewer jobs – is possible.” Basic income, proponents argue, is not a challenge to this shift towards modernization; it is simply a safety net for those lives most disrupted by the technological advances we most celebrate.

Basic income proponents also see the programs as a critical bulwark in the fight against right-wing nationalism. As Guy Standing, a leading proponent of basic income, argues, citizens left behind by the changing economy are drawn to the “sirens of neo-fascist populism” such as Donald Trump and Marine Le Pen. These politicians support protectionist barriers in order to convince voters that they can protect manufacturing jobs. But proponents of basic income believe that it can be a backstop against that economic alienation. In other words, basic income could mollify the voter, who, in Obama’s words, “has seen his world upended by economic and cultural and technological change.” Proponents have noted basic income’s ability to aid the recipient in refusing high-risk or dehumanizing labor and empower the voter to refuse the appeal to a bygone economic reality.

It would be naive to argue that basic income can protect individuals from a desire to return to the greener pastures of yesterday. Basic income alone won’t turn the tides of global inequality or protect jobs from automation. But it does promise to protect the economic stability of both the displaced laborer and those in desperate poverty, two increasing concerns in today’s world. And if recent experiments with basic income are as successful as old ones, then the programs will likely only become more popular. Perhaps this time, UBI won’t be a thing of the past.

 

About the Author

Nathaniel Pettit '20 is a US Section Staff Writer for the Brown Political Review.

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