By Elijah Cooper
Andrew Yang's presidential campaign may not have had a real chance, but one of the main ideas his campaign was run on is picking up steam. That idea, is Universal Basic Income(also known as UBI). This idea was proposed as a way to stimulate the economy, help end poverty, shrink the wealth gap, and help Americans make sure they have enough income for their basic esentials. Every idea has its pro's and cons, and in this article we will discuss just that.
First, it's important to understand what UBI is. It's essentially the government making regular cash payments to each of its citizens to cover basic needs like housing, food, and others. Think of it as "social security for all," if you will.
Government handouts have long been seen as a bad thing, and most would assume that something like this would take away the motivation to work and create a lazy society. This is laregly a myth however, and of course people will abuse government benefits, but most studies reveal that people taking advantage of the system happens far less than people who don't. So should a few people stop the entire country from getting benefits that could help them improve their life?
One of the main benefits of UBI, would be it could replace a number of other government programs. Programs like welfare, food stamps, possibly even social security would no longer be necessary if the new basic income is universal. Therefore, you wouldn't need any testing to ensure these benefits are only going to those who need it, which would reduce the additional administrative costs that come with today's government benefit plans.
The other thing we have to consider, is that poverty is actually expensive. People living in poverty are statistically more likely to commit crimes, struggle at school, have health issues, and other issues that require goverment spending. Of course, it's naive to think all of these problems will disappear with UBI, but it certainly would decrease the amount of people living in those conditions. Which in the long run, would save the government a lot of money.
Another major impact UBI would have would be on the job market. Currently employers know that being unable to provide for yourself or your family, means putting up with a lot. This allows some employers to get away with not offering competitive wages or benefits, knowing many workers will not have any other option. However, if every worker knows they can still provide basic needs for their family, they will be more likely to test the job market and be able to demand more respectable wages and benefits. More emphasis would put on making their company a desirable place to work, rather than taking advantage of their employees labor.
Direct cash payments have proven repeatedly to be the most effective way a government can stimulate an economy. It's pretty basic economics, you give people who need things money to spend, and they will spend it on things they need. Essentially, you're giving consumers money, to consume goods. Who would've thought that people having money to spend, would be good for businesses too?
Of course, there are negatives to this UBI idea, and its about time we cover that right? The biggest concern is obviously the workforce, the worry is that many people would simply stop working once they realize they don't have to. This would dry up the labor pool and cripple businesses in the process.
The argument can also be mad, that injecting that much cash directly into the economy could have an unpredictable impact on inflation. If prices rise too fast, the value of the benefit drops and ultimately makes UBI counterproductive.
Lastly, you gotta factor in the cost of UBI. If you were to pay 300 million Americans, $1,000 a month, it would cost $300 billion dollars a month. Of course, some of that would be mitigated with the removal of redundant social programs (as discussed above), higher tax revenues from increased economic activity, and possibly limiting who would be eligible. However, that's still an incredible amount of money. Question is, is it worth it?
Basic income has been practiced a number of times just in the U.S. alone. For example, the "negative income tax" experiment run under Nixon. An idea actually spearheaded by Republicans at the time (bet you never would've guessed that). It has also been pracitced as an experimental study in Stockton, Califonia. You could even consider Alaska's Oil Fund Benefit as a form of basic income.
The idea is certainly one to consider, and it's benefits have been highlighted a lot during this current pandemic, and you have to wonder how much better this could have been handled if we already had something like this in place. Many candidates running for public office are starting to add UBI to the issues they are campaigning on. The "Yang Gang" is certainly picking up steam, and this could be a change we see in the near future.