Cushman: COVID-19 Proved That Universal Basic Income Is Necessary
January 27, 2022
During the 2020 primary election, Andrew Yang had a unique plan to deal with the economic challenges facing America: Universal Basic Income (UBI). Yang’s UBI plan would give $1,000 each month to every American over 18 years old. Many Americans are skeptical of, if not downright opposed to UBI. I was in that camp, too, until the pandemic. COVID-19 changed my opinion on UBI — and it should change yours, too.
When Yang proposed UBI, I, like many Americans, immediately brushed off the idea. I had never heard of a welfare program that gave payouts to everyone, regardless of need. I’ve always been a supporter of social welfare programs like universal healthcare, more paid leave for parents and aid for people experiencing poverty. But UBI doesn’t work in the same way as those programs. However, COVID-19 revealed a huge weakness in America’s social safety nets and stimulus checks showed the potential that UBI has to fix it.
Crisis Doesn’t End With the Pandemic
The pandemic kept many people out of work for our nation’s safety and lockdown financially devastated many households. By April 2020, 32% of upper-income Americans said they or someone in their household had lost their job or taken a pay cut, and that number increased to 52% among low-income Americans. Paying bills, let alone saving money, was difficult for many. As a young person who hasn’t established a career yet, I was especially vulnerable. When lockdown started, my catering job disappeared with no notice, forcing me to work a job with a much lower wage as I moved into my first apartment. For the next year, I struggled to keep up with my bills.
The pandemic made the rich richer, and the poor poorer, as low-income Americans were much more likely to lose work and struggle to pay their bills during the lockdown. In response to this financial devastation, the government stepped in, giving Americans stimulus checks. For me and many others, those checks were a financial lifeline as the pandemic made the labor market unpredictable. However, labor around the world will continue to change drastically, just like it did during the pandemic, as automation and climate change will cause millions of jobs to disappear.
While the estimate on how many jobs will be lost to automation by 2030 varies from 20 to 45 million, one thing is certain — automation will force people out of jobs. As many as a quarter of U.S. jobs are vulnerable to being lost to automation. Like the COVID-19 unemployment crisis, automation is set to affect low-income workers the hardest, as they are more likely to perform menial labor. UBI, like stimulus checks, would be a financial lifeline to people affected by automation, allowing them to pay their bills as they search for other employment.
Similarly, as we transition towards renewable energy, thousands of jobs in the fossil fuel industry will be lost, a trend we’ve already started to see. Those workers may not have the resources to easily find a job that can pay their bills in the same way. UBI can act as a cushion for these workers that oftentimes have spent decades in the fossil fuel industry. Also, as destructive weather events continue to get worse, UBI will help families stay afloat if they have been displaced by extreme weather.
Stimulus Checks Are Proof
One criticism of UBI is that it de-incentivizes work, ultimately harming the economy and employment. But, research on UBI has shown that any decreases in employment are offset by higher spending, which creates a greater demand for workers. Stimulus checks, which function similarly to UBI on a small scale, prove that UBI is feasible in the United States. Not only did stimulus checks significantly reduce food insecurity and financial instability, but, among poorer Americans, almost half of the stimulus money was reintroduced to the economy within only ten days.
This shows that UBI effectively reduces financial stress and gives poor Americans more money that cycles back into our economy. A UBI would make it easier for Americans to get a college education to improve their work options. And, it consistently gives people more spending money to support American businesses and labor.
This pandemic is not the last crisis that the U.S. labor market is going to face. UBI offers protection for the American people when crisis strikes again. Additionally, it will allow poorer Americans the ability to engage with the economy more, making a better economy for all Americans. I understand why the idea can seem absurd or outlandish, but it is a viable solution to the weaknesses of our current social safety nets and it is a policy we should pursue.
max • Jan 27, 2022 at 1:43 pm
This is madness.
UBI reduces stress and saves people from homelessness and poverty NOW, but nothing in this article explains where that money actually comes from. Just like the stimulus payments, the money seems to work miracles by preventing disaster and rocketing the economy, but that is all a short-term effect using borrowed money, which means we save people now by tying a millstone around their necks that will last for decades and still be on the backs of the next generation.
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If the US economy were actually paying down the deficit because we had a surplus of tax revenue, then UBI would make sense because we could judiciously use some of that generated wealth to protect all Americans from these disasters. But there is no surplus. There is no “fund” from which UBI can come. It would just become another entitlement, like Medicare and Social Security, that we already cannot fund.
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The pandemic may have shown that UBI would be a swell idea, if we actually had the money. But the stimulus borrowing and massive run-up of the deficit showes us that the REAL lesson of the deficit was: that we are broke, that we cannot take care of our people in times of crisis, that even the most basic essentials of food, housing, and health care cost too much for our present economy to pay for, that we are, in fact, not a first-world country at all. We are just pretending to be one by borrowing money.
Okin S • Jan 28, 2022 at 4:13 pm
Where the money comes from isn’t a real issue to worry about. Our politicians never care where the money comes from, for their military spending, or corporate/wall-street bailouts, and certainly they don’t think about it when they cut their taxes for themselves and their rich buddies. The fact is, if the policy is there, they’ll find the money. Not like they aren’t constantly printing money for their own arbitrary reasons. They don’t even need to do that, they just need to stop wasting our taxes, and giving it to their buddies. They could pay for it simply by better allocating the freaking budget.
But hey, even if UBI may require increasing taxes on the wealthy a bit, it still wouldn’t be as high as their taxes used to be, decades ago. Alternatively, since automation is significantly starting to replace workers.. Maybe tax that somehow. Otherwise, decades from now, a tiny group of owners will eventually own all production without any real work-force. So maybe that’s something that also needs focus, if things keep going where technology seems headed..
Duke • Feb 13, 2022 at 12:41 am
All you have to do is follow the money. Pre pandemic, we had a system where all the money got funneled to the top. We printed 11 trillion during the pandemic and gave some to the poor to scrape by. But most of it went directly to the top AND what did go to the bottom ALSO eventually funneled to the top.
All that money at the top had to be invested somewhere. Second homes, stock market, crypto. All the money printing caused inflation. To inhood policies aren’t popular. But you can print money, give to everyone, and tax it back progressively from those that make over 60k for example. That is the answer to your question. Raise taxes enough to pay for it. Newsflash, the money was printed and ended up somewhere. Taxing it back IS possible. Tax stock trades, tax wealth, tax capital gains, tax RE gains fairly. This would deflate housing and stock bubbles. UBI would let people move back to small town America. It would revitalize America. The wealthy will protest, but they will still be THE WEALTHIEST. Get over the greed America, we have homeless people everywhere and children going hungry. Our nation is Pathetic, due to greed.