The biggest problem facing many people during this pandemic is the loss of employment. About 30 million people have lost their jobs and as I have discussed before and Hasan Minhaj highlighted so well on his show, this has knock-on effects that spread all through society. Not having any income means they cannot pay their rent or buy food or other things and that hurts businesses. Not paying rent means that their landlords cannot pay their mortgages or utilities or property taxes, which means that state and local governments lose revenue and can’t provide services. And so on. Congress has passed various stimulus packages but these require people to jump through all manner of hoops to get aid, is insufficient, and does not cover everyone who has been affected.
It struck me that one solution might be for the federal government to simply pick up the wages of every person who lost their job. That seems fair since after all it was due to government policy that they lost their jobs because the government ordered places to close. If the government paid every such person (say) $3,000 per month, then they could pay their rents and buy food and other necessities, which means that the economy would not grind to a halt. For 30 million people, this would come close to $100 billion per month. Given that Congress is passing bills that spend trillions of dollars, this does not seem like that much. In fact, it appears that many countries including Australia, Britain, Canada, France, Germany, and South Korea have been temporarily paying the wages of workers to prevent layoffs.
By paying the workers, that eases the burden on their employers since wages and salaries form a hefty part of a business’s operating costs. Businesses will still need some relief to cover the rest of their operating costs such as maintaining their property and paying utilities and the like, but that would be far less.
The central idea is not that different from that of the Universal Basic Income proposals that has been around for centuries and this article lists all the countries that have tried it out, so it is not unrealistic. Andrew Yang also suggested it during his run for the Democratic party nomination.
With a few exceptions — Kenya, where a big experiment in universal basic income (UBI) is underway; Iran, which has a nationwide unconditional cash transfer program; and Alaska, which gives an annual dividend to everyone in the state — basic income programs are offering money to small groups of a few hundred or a few thousand people, not an entire polity. In other words, they offer a basic income, but not a universal basic income.
These small-scale trials are necessary because governments want to have a good sense of what the effects will be before they start shelling out many billions or trillions of dollars. Proponents of basic income argue it’s the best way to end poverty: Just give everyone money! Some also say it’ll help society cope with a coming era of automation-induced joblessness. And the evidence so far suggests that getting a basic income tends to boost happiness, health, school attendance, and trust in social institutions, while reducing crime.
But critics worry that it will disincentivize work, cheating economies out of productivity and cheating individuals out of the sense of meaning that work can bring. Plus, they say, it’s just plain unaffordable for the government to pay every citizen enough to live on regardless of whether they work. The evidence so far does not support these critiques, as you’ll see.
Sometimes it takes crises to force people to bring to the fore better ways to solve old problems. UBI may be an old idea whose time has finally arrived in the US.