By an overwhelming 3-to-1 margin, Swiss voters have rejected a proposal that would have guaranteed all residents a monthly income, whether they worked or not. Yet supporters of the concept elsewhere are not taking the Swiss “no” for an answer.
Frequently proposed in the past, guaranteed income for all is back in vogue because of fears that robots and artificial intelligence threaten whole categories of jobs, especially for less skilled workers, and that any remaining jobs will be unstable “gigs.” Mass poverty and inequality loom.
Economists’ usual prescription is greater investment in education and training, to equip people for high-paying work. The guaranteed-income movement says it’s smarter and simpler to separate subsistence from labor.
Backers span the ideological spectrum: Andy Stern, uber-liberal former president of the Service Employees International Union, cites straightforward social-justice arguments, as the title of his new book, “Raising the Floor,” suggests. Small-government conservative Charles Murray says a guaranteed income would streamline the welfare state and clearly define society’s minimum — and maximum — obligations to the less fortunate. Oakland, Calif., and Finland may soon see experimental guaranteed-income programs.
But even assuming political and financial support could be found for such a program, it would face immense practical issues.
Any minimum income — Murray suggests $10,000 plus $3,000 for health insurance, with a phaseout after $30,000 in earned income — would be insufficient in some areas, excessive in others. In Puerto Rico, $10,000 is more than half the median income; in Manhattan, it seems like a brie-and-prosciutto sandwich costs that much.
What about immigrants’ eligibility? The rule most consistent with guaranteed income’s goals — apply it to newcomers upon arrival, lest they form an underclass — would stimulate migration, irritating sender countries and U.S. taxpayers alike. We could impose a waiting period: Good luck choosing one that seems fair to everyone.
As for the obsolete-labor problem, no one really knows how large it is. In 2013, Carl Frey and Michael Osborne of Oxford University wrote that 47 percent of U.S. jobs are “at risk” over the next two decades. The Organization for Economic Cooperation and Development says 9 percent. All estimates should be read in light of unfulfilled past predictions of mass technological unemployment.
Should we adopt a policy based on such guesswork? Probably not — when you factor in a guaranteed income’s imponderable, but likely dampening, effect on incentives to seek a job, especially entry-level work, when earnings are lowest. (By the way, is a minimum wage still necessary and justified in a guaranteed-income world?)
Stern cites research showing no significant work reduction during guaranteed-income pilot projects in a rural Canadian town four decades ago and, more recently, in a Namibian village. These tests (and the new ones being contemplated in Oakland and Finland) hardly indicate the repercussions of telling every American, from childhood, that he or she gets a check upon reaching adulthood.
Even after the robot-overlord takeover, someone will have to work, which means society must encourage people to try, even if the ultimate rewards aren’t certain.
Murray acknowledges his plan would discourage work — he just thinks it would not do so more than current policy. And he sees a bright side: Income-secure citizens would flock to volunteer work, reenergizing civic culture. Stern, for his part, sees guaranteed income enabling today’s incipient move toward work “driven largely by people’s own motivation, creativity, and the ability to make a job out of nothing.”
It all reminds you of Karl Marx’s daydream of communism, in which “society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, to fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have in mind, without ever becoming hunter, fisherman, shepherd or critic.”
Reality check: 25-to-54-year-old American men who have left the labor force watch TV an average of 335 minutes per day, according to a report by White House economic advisers.
If government paid a $10,000-a-year guaranteed income on top of the existing safety net — Medicaid, the earned-income tax credit, Social Security and the rest — it would have to raise taxes and cut other spending by $3 trillion per year, according to Robert Greenstein of the Center on Budget and Policy Priorities.
If, by contrast, guaranteed income replaced current safety net programs (Murray’s proposal), it would shift vast resources away from the poor, because means-tested benefits now devoted to low-income people would be distributed to others higher up. It’s not clear how you’d sell a Murray-style plan to people who paid into Social Security expecting, in most cases, much more than $10,000 per year upon retirement.
A guaranteed minimum income is thought-provoking. The main thought it provokes is this: We can, and should, rationalize the linkage that U.S. social policy has established between work and economic security — especially by decoupling health insurance and employment, as Obamacare did to some extent. It’s probably unnecessary, and definitely risky, to eliminate that linkage entirely.
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Read more on this topic:
Matt Zwolinski: Our welfare system insults the poor. Basic income could do better.
Matt Bruenig: Tired of capitalism? There could be a better way.
Michael R. Strain: Universal basic income won’t make America great again, either
Jonathan Coppage: The terrible cost of universal basic income