In January of 2020, I drove from Minneapolis to Mason City, Iowa. Primary season was coming up and I’d just been hired by the Andrew Yang campaign to work as a field organizer. I’d chosen to work for the Yang campaign because Yang’s signature policy—Universal Basic Income—was more quixotic, and therefore more interesting, than that of any other candidate. Also, his campaign was the only one that hired me, and I needed a job, pronto.
Yang’s vision Universal Basic Income consisted of $1,000.00/month payments to every American, regardless of income. He pitched the proposal in simple, convincing language. “It’s trickle-up capitalism”, he often said. One of the most obvious strengths of Yang’s UBI was that it provided an immediate emergency fund for people in crises like overdue mortgage payments, food insecurity, and the like. If you are one of the 53 million Americans who sought help from a food bank or program, you probably know how frustrating it can be sometimes to get enough food through these programs, which have stretched to the breaking point and are still struggling.
But Yang’s policy of cash payments instead of welfare isn’t just for people below a certain income level (hence the “Universal” part of its name). Yang argued that if everyone received the same amount, the cultural stigma against “government handouts" would be undercut; plus, the funds for UBI would be paid for by a value-added tax, which, theoretically, would be applied at a higher rate to luxury goods and also force large corporations to pay their fair share.
Of course, Yang did not become President in 2020, and in retrospect, that is probably a good thing. To start with, one economist demonstrated fairly convincingly that the numbers in his plan didn’t add up. Instead, Joe Biden become President and passed Inflation Reduction Act, which in my view was still a very good outcome.
But Yang’s idea has outlived his campaign. It’s becoming more and more popular, but in a different—and, in my view, better—form. It’s called Guaranteed Basic Income. The program carries through on the best element of UBI by eliminating the inefficiency that plagues our current patchwork of welfare programs and replaces it by simply giving cash only to people below a certain income level. Right now, the US has a dizzying array of programs, all targeted to different needs—housing, food, transportation, etc—and as an intern at The Advocates for Human Rights whose work is to help asylum-seekers access government assistance, I can tell you that the amount of attention and energy needed to hunt down the right program and access that help is far too high a bar (more on that in a later post). Simply put, we need to simplify our welfare system, and Guaranteed Basic Income is a way to do that.
The good news is that a pilot study of guaranteed basic income is already happening in St Paul, Minnesota. 150 families with a median income of $12,000 year received monthly checks of $500.00, no strings attached. The final results have yet to be released. Another pilot program is underway in Minneapolis and wraps up in 2024, and other cities are also piloting their own programs. Across the US, a majority of voters support Universal Basic Income, which implies that a Guaranteed Basic Income would be even more politically palatable.
Of course, there are very valid objections against either UBI or GBI. Journalist Alan Ehrenhalt argues that if recipients simply stopped working low-wage jobs and relied solely on a guaranteed basic income, “restaurants and nursing homes would face a serious worker shortage, or they would have to raise wages substantially and increase costs to the consumer”. This is one of the many possible consequences of such a policy, not to mention the unforeseen pitfalls that any drastic shift in social policy necessarily entails. Other critics contend that the policy will result in increased consumption, which in turn will lead to greater monetary velocity, contributing to inflation. I’m not educated enough in economics to fully dissect these arguments here, but these seem to be good-faith objections and worth taking seriously.
Whether or not Minnesota or the nation adopts a policy of UBI or GBI, it’s clear to me that Guaranteed Income is the future. And, it’s complicated.