Universal Basic Income in America

Explainer

What do we know about universal basic income in America?

By Ian Toner (Reporter), Ryan Tiedgen (Editor)

New York City mayoral candidate Andrew Yang popularized the concept of universal basic income in America during his presidential campaign. Supporters say it could help struggling low-wage families, while skeptics believe it expands the welfare state too far.

IAN TONER, REPORTER:

HOW WOULD YOU LIKE A CHECK FROM THE FEDERAL GOVERNMENT EVERY MONTH…NO QUESTIONS ASKED, NO STRINGS ATTACHED. THAT’S THE IDEA BEHIND UNIVERSAL BASIC INCOME.

SUPPORTERS SAY IT CAN HELP AMERICANS MEET BASIC NEEDS, WITHOUT MULTIPLE MINIMUM WAGE JOBS STRETCHING FOLKS TOO THIN. TO SKEPTICS, IT SOUNDS TOO MUCH LIKE SOCIALISM, OR AN UNNECESSARY EXPANSION OF THE WELFARE STATE. 

BEFORE YOU MAKE UP YOUR MIND, LET’S DIVE A LITTLE DEEPER INTO UNIVERSAL BASIC INCOME. 

HERE’S THE CONCEPT BEHIND UNIVERSAL BASIC INCOME, OR U-B-I FOR SHORT. THE GOVERNMENT WRITES A CHECK TO EVERY ADULT EVERY MONTH OR YEAR, NO MATTER THEIR TAX BRACKET. THERE’S NO QUESTION ABOUT RECIPIENTS’ INCOME, LIKE YOU SEE FOR FOOD STAMPS OR MEDICAID. 

AS THE COVID-NINETEEN PANDEMIC DROVE MORE AMERICANS TO VIRTUAL UNEMPLOYMENT LINES, U-B-I CONVERSATIONS CAME FRONT AND CENTER AGAIN. 

THE ARGUMENTS FOR U-B-I FOCUS ON THE SECURITY IT WOULD PROVIDE FOR UNEMPLOYED AMERICANS OR LOWER-INCOME FAMILIES WHO STRUGGLE TO MAKE ENDS MEET. 

Andrew Yang: “We all know that right now, most Americans are living paycheck to paycheck.”

TONER: ANDREW YANG MADE THE CASE FOR U-B-I ON THE JOE ROGAN PODCAST DURING HIS PRESIDENTIAL PRIMARY CAMPAIGN IN TWENTY NINETEEN.

YANG: “Fifty-seven percent of Americans can’t afford an unexpected five hundred dollar bill. So you put a thousand dollars a month into their hands, it’s gonna go right back into the economy.”

TONER: AND THE ARGUMENTS AGAINST U-B-I FOCUS ON…A, THE COST OF IMPLEMENTING IT…AND B, THE CONCERN THAT AMERICANS WON’T WORK IF THEY KNOW THEY CAN COUNT ON A CHECK FROM UNCLE SAM EVERY MONTH.

ART LAFFER: Bottom line is you never want to penalize workers and reward non-workers.” 

TONER: FORMER REAGAN ADMINISTRATION ECONOMIST ART LAFFER ARGUED AGAINST U-B-I’S FEASIBILITY IN A TWENTY EIGHTEEN FOX BUSINESS SEGMENT. 

LAFFER: You’re gonna get a lot of non-workers. You’re gonna get the growth stopped. And you’re gonna get the economy going in the tank. That’s not what you want.”

TONER: LET’S START WITH A RECENT EXAMPLE. IN 2019, STOCKTON, CALIFORNIA GAVE MORE THAN A HUNDRED PEOPLE FIVE HUNDRED DOLLARS A MONTH FOR TWO YEARS, WITH NO QUESTIONS ASKED. 

IN YEAR ONE, EMPLOYMENT SPIKED WHILE UNEMPLOYMENT DIPPED. DEPRESSION AND ANXIETY SYMPTOMS DECREASED, TOO. 

IN THE SEVENTIES, ANOTHER SET OF EXPERIMENTS GAVE CASH TO LOW INCOME PEOPLE IN THESE SEVEN STATES. NOW SOME OF THOSE PEOPLE DID END UP WORKING FEWER THAN FORTY HOURS PER WEEK.

KEEP IN MIND, THESE WERE SHORT-TERM PROGRAMS…BUT NO MATTER WHAT WE CONCLUDE FROM THESE EXPERIMENTS, THE QUESTION REMAINS HOW WOULD THE GOVERNMENT PAY FOR ALL THIS? 

WHEN YANG POPULARIZED HIS “FREEDOM DIVIDEND” OF ONE THOUSAND DOLLARS TO EVERY AMERICAN ADULT EVERY MONTH, ECONOMISTS SAID IT COULD COST NEARLY THREE TRILLION DOLLARS PER YEAR. 

THAT’S MORE THAN THREE-QUARTERS OF THE ENTIRE ANNUAL FEDERAL BUDGET.  NOT ALL U-B-I PROPOSALS ARE IDENTICAL…BUT THERE’S NO CONSENSUS ON WHERE THOSE TRILLIONS OF DOLLARS WOULD COME FROM.  

YANG’S PROPOSAL CALLED FOR ADDING OR CHANGING SIX TAX CATEGORIES TO FOOT THE U-B-I BILL. 

OTHERS HAVE FLOATED THE IDEA OF U-B-I REPLACING WELFARE PROGRAMS LIKE FOOD STAMPS OR HOUSING VOUCHERS ALTOGETHER. ALL THIS SAID, MORE THAN HALF OF AMERICANS OPPOSE FEDERAL FUNDING FOR UBI…SO DON’T EXPECT IT TO PASS CONGRESS ANYTIME SOON. 

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New York City mayoral candidate Andrew Yang popularized the concept of universal basic income in America during his presidential campaign. Supporters say it could help struggling low-wage families, while skeptics believe it expands the welfare state too far.

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