An idea whose time has finally come.
March 17, 2014
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What if you could receive a guaranteed basic yearly income with no
strings attached? Didn’t matter how much money you made now, or in the
future. Nobody would ask about your job status or how many kids you
have. The check would arrive in the mailbox, no matter what.
Sounds
like a far-fetched idea, right? Wrong. All over the world, people are
talking guaranteeing basic incomes for citizens as a viable policy.
Half of all Canadians want it. The Swiss have had a
referendum on it. The American media is all over it: The
New York Times’ Annie Lowrey
considered basic income as an answer to an economy that leaves too many people behind, while Matt Bruenig and Elizabeth Stoker of the
Atlantic wrote about it as a
way to reduce poverty.
The
idea is not new: In his final book, Martin Luther King Jr. suggested
that guaranteeing people money without requiring them to do anything in
exchange was a good way for Americans to share in prosperity. In the
1960s and early 1970s, many in the U.S. gave the idea serious
consideration. Even Richard Nixon
supported a version of it.
But by 1980, the political tide shifted to the right and politicians
moved their talking points to unfettered markets and individual gain
from sharing the wealth and evening the playing field.
Advocates
say it’s an idea whose time has finally come. In a world of chronic job
insecurity, stagnant wages, boom-and-bust cycles that wipe out ordinary
people through no fault of their own, and shredded social safety nets,
proponents warn that we have to come up with a way to make sure people
can survive regardless of work status or economic conditions. Here are
five reasons they give as to why a guaranteed basic income might just be
the answer.
1. It would help fight poverty:
America is the richest country in the world, yet widespread poverty
continues to afflict us. Social Security has arguably been the
most successful program for reducing poverty
in American history, dramatically cutting poverty among the elderly and
keeping tens of millions above the poverty threshold. Why not expand it
to all?
Matt Bruenig
calculated
that by giving everybody a mere $3,000 a year, including children (who
would receive the money through their parents), we could potentially cut
poverty in half. The program would be simple: you get it no matter how
much money you make, which would prevent poor people from having to
worry about losing the benefit. With everybody in it together, you get a
much larger base of political support (one of the reasons means-testing
has always been a
back-door way of killing Social Security— it reduces support).
In the 1970s, the small Canadian town of Dauphin ran an experiment through a social policy called “
Mincome.”
Everybody in the town was allowed to get a minimum cash benefit during
the duration of the program. Poverty was eliminated, because people
living below the poverty line saw their income boosted through monthly
checks. But the results were about more than an official line marking
the poverty threshold. Mincome positively impacted the horrible
conditions associated with the
cycle of poverty. When people
had a basic income, they were able to better care for their families,
stay healthy and improve their education — all the things that help
people stay out of poverty in the future.
2. It could be good for the economy:
A basic guaranteed income has the potential to positively impact the
economy in several ways, which is why economists from John Kenneth
Galbraith to Milton Friedman have advocated it.
For one thing, it
could help solve the problem of demand. The great driver of the economy
in a capitalist system is something economists call “aggregate demand.”
The Econ 101 lesson is simple: when ordinary people have money in their
pockets, they spend it on goods and services, which in turn allows
businesses to thrive because they are able to invest and to hire more
people. Proponents argue that a basic guaranteed income would increase
demand, which would help the economy to prosper.
But
wait, wouldn’t people get lazy if they had a basic income? One of the
things the Mincome researchers wanted to know was whether a guaranteed
basic income would cause people to stop working. Despite all the dire
predictions that had circulated in academic literature before the
experiment, the Mincome effect on number of hours worked was actually
quite small — hours dropped 1 percent for men, 3 percent for married
women and 5 percent for unmarried women.The decrease in hours was
mostly the result of people taking the time to raise newborns, care for
family members, and pursue their education — people did not cut back on
work just to loaf around. In addition to activities which would serve
as economic investments for the future, the experiment also resulted in
things like fewer hospital visits and illnesses, all of which reduce
public health costs.
Many argue that a guaranteed basic income is
also potentially good for entrepreneurship, making it easier for people
to start a small business or switch careers.
3. It could have many benefits to society:
Clearly, we want policies that help us create a more stable society
where more people can reach their potential and fewer people resort to
crime and violence. Advocates say a guaranteed basic income does just
that.
Researchers found that during the Mincome years, more people
in Dauphin finished high school, more adults pursued education, and
students achieved higher test scores. As noted, people got healthier,
too: Fewer people visited the hospital, mental illness decreased, and
the number of work-related injuries went down. Plus, social ills like
domestic abuse dropped.
As a recession hit and the center-left
politics of the 1970s shifted rightward in Canada, interest in the
Mincome experiment waned. However, Canadian economic researcher Evylen
Forget
notes
that most people who participated in Mincome wish the program had
continued, citing benefits like increased opportunity to pursue an
education.
Candadians are now reviving the idea, many
arguing
that such programs would actually encourage people to work because they
would eliminate welfare provisions that penalize the poor who take very
low-paying or part-time jobs. In Brazil,
advocates have pointed out that a basic guaranteed income could help guard against such scourges as child labor, while Swiss activists
make the case that it would help people do more meaningful work, making for happier and better workers.
Philippe Van Parijs, a Belgian philosopher,
argues
that a basic income is a powerful tool for social justice, allowing
everyone, no matter what their circumstances, the possibility to pursue
their conception of a good life. He notes that a guaranteed basic income
could address some of the issues associated with sexist divisions of
labor in which women are expected to do more of unpaid, care-giving work
in our society.
4. It might be more efficient than present systems:
In the current patchwork of systems confronting poverty, like welfare,
food stamps and vouchers, people can fall through the cracks. A
guaranteed income could help solve problems caused by rules and
restrictions that leave some without subsistence income when they need
it.
It’s not just liberals and progressives who like the sound of a
simple basic guaranteed income. Something streamlined appeals to
conservatives who like versions that could replace existing tax credits
and social assistance programs — though it’s important to note that most
advocates don’t propose it as a full substitute for existing programs.
The American Enterprise Institute’s Charles Murray points out that a
streamlined system would obviate the need for people to fill out
multiple forms and visit myriad offices to receive benefits. (In his
book
In Our Hands: A Plan to Replace the Welfare State, Murray suggested an income of $10,000 a year to anyone who was American, over 21 and out of jail.)
5. Let’s not forget simple human dignity:
Why is living in dignity not a right? These days, even Americans who
get up in the morning every day and report to full-time jobs may
not earn enough for a decent standard of living.
People like fast-food workers, big-box store employees, caregivers,
beauty salon workers, and farm hands often can’t earn enough to feed
their families and keep a roof over their heads. Millions have seen no
real increase in earnings in decades. Material security, as well as the
intangible things that come along with it, like self-esteem and peace of
mind, are often out of reach.
A guaranteed basic income is one
way to help people to survive with dignity and free them from the
humiliation of having to participate in criminal activity and accept
abusive work conditions. Because everyone gets it, such a program might
serve to eliminate the stigma of a hand-out. Of course, the payment has
to be large enough that it helps people actually live in dignity, and
some, like economist L. Randall Wray,
prefer it as a supplement to something like a jobs guarantee program for this reason.
What’s
clear is that our current capitalist system and social safety net have
failed too many of us. It may be that in order to confront that epic
fail, policy makers will need to get bolder in considering universal
guarantees to all citizens.
Lynn Parramore is an
AlterNet senior editor. She is cofounder of Recessionwire, founding
editor of New Deal 2.0, and author of "Reading the Sphinx: Ancient Egypt
in Nineteenth-Century Literary Culture." She received her Ph.D. in
English and cultural theory from NYU. She is the director of AlterNet's
New Economic Dialogue Project. Follow her on Twitter @LynnParramore.
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