What is UBI?
- The idea of Universal Basic Income, or UBI, goes back as far as the 18th century. UBI provides everyone with a direct cash payment on a regular basis, with no strings attached, and would lift countless families and individuals out of poverty. UBI is necessary, especially in CA-34 where:
Why UBI?
In addition to reducing widespread poverty, a Universal Basic Income of $1000 per month to every American adult will cost less to implement than our current inefficient means-tested relief programs. The federal government would provide UBI payments directly into the hands of the American people through free public banking.
Numerous basic income experiments have shown:
- UBI improves mental health by reducing conditions of scarcity, poverty, and financial insecurity – major sources of stress for millions of people.
- UBI increases bargaining power for workers because a guaranteed, unconditional income gives workers leverage to say no to exploitative wages and abusive working conditions.
- UBI improves labor market efficiency, because fewer workers are stuck in jobs that are a bad fit. National productivity improves, because people will be able to seek work that is more rewarding and provides higher job satisfaction.
- UBI encourages people to find work. Many current welfare programs take away benefits when recipients find work or save over a certain threshold amount, leaving them financially worse off. UBI is for all adults, regardless of employment status, and recipients are free to seek additional income.
- UBI improves physical health. With increased economic security, people are less prone to stress, disease, and self-destructive behavior. A UBI experiment in Canada saw hospitalization rates go down by 8.5%.
- UBI increases art production, nonprofit work, and caring for loved ones, because UBI provides a supplementary income for those interested in socially beneficial labor that isn’t valued by the current productivity-focused market.
- UBI reduces domestic violence, child abuse, financial stresses, and sources of relationship conflict.
- UBI helps people make smarter decisions. UBI would provide the financial security that people need in order to focus on important things like their families.
- The Roosevelt Institute found that a UBI would create 4.6 million jobs and promote entrepreneurship and creativity. UBI would provide new business owners with guaranteed income in the early lean days of a company and acts as a safety net if the business fails.
Furthermore, UBI has the potential to increase the economy by 13% and help revive pandemic-ravaged industries like retail and hospitality. While some gross cost calculations for the UBI program run into the trillions, the net cost, or “real cost” is calculated to be just a sixth of the oft-mentioned price tag — an investment that our nation can make at a lower net price than the current defense budget.
Universal Basic Income FAQs
Has Universal Basic Income ever been done before?
Experiments with unconditional cash benefits around the world have proven to be one of the most successful ways of reducing poverty. The fear that cash recipients would waste their money on drugs or alcohol, stop working, or have more kids has been disproven by the World Bank. In fact, many of these behaviors were actually reduced.
In the last 50 years, there have been more than 30 cash transfer programs studied. Here are a few of our favorites:
- The “Mincome” Experiment, Manitoba, Canada (reduced hospitalization and no reduction in work hours)
- BIG Pilot Project, Namibia (reduced crime, reduced school dropouts, and improved health)
- Give Directly, Kenya (increased assets and nutrition, and no change in drugs or violence)
- Stockton Economic Empowerment Demonstration, USA (reduced depression, reduced financial insecurity, and increased full-time employment)
- COVID Stimulus Checks, USA (significantly helped Americans’ abilities to buy food and pay household bills and reduced anxiety and depression, with the largest benefits going to the poorest households and those with children)
- Child Tax Credit, USA (reduced childhood poverty, reduced food insecurity, and buffered family incomes amidst the continuing COVID-19 crisis)
The data is clear – giving people money enables them to live better lives. Since 1998, there have been a total of 461 research papers published on the topic. You can view them all here.
How will we pay for a Universal basic income?
The following sources would help pay for a Universal Basic Income:
Spending reallocation and increased efficiency. Specifically, UBI would be funded by redistributing the money that already exists in the economy into people’s hands and a tax system that targets the wealthy class and large corporations, not regular people and small businesses.
Things to consider:
- We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and other safety net programs.
- The pandemic has highlighted how much more work we need to do to create equitable safety net programs throughout the country.
- Government COVID relief programs such as COVID stimulus checks and Child Tax Credits revealed how effective giving cash directly to families and individuals are to reduce poverty, financial insecurity, anxiety, and more.
- We currently spend over one trillion dollars on health care, incarceration, and homelessness services.
By implementing UBI, we would save $100 – $200+ billion as people would take better care of themselves and avoid the emergency room, jail, and the streets. - The $1,000/month UBI would pay for itself by helping people avoid our institutions, which is when our costs start soaring.
- Some studies have shown that $1 to a poor parent will result in as much as $7 in cost-savings and economic growth.
New economic growth. Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs after 6 years. This would generate approximately $800 – 900 billion in new revenue from economic growth and activity.
Wouldn’t a $1,000/month UBI trigger inflation?
No, because the leading theory in monetary economics states that inflation is based on changes in the supply of money. By providing a $1,000/month UBI to every U.S. Citizen, the government would not change the supply of money but instead would redistribute the money supply that is already in the economy. Even if some portion of UBI were to be created through fiscal policy, the Chair of the Federal Reserve, Jerome Powell, has admitted that our economy can sustain a healthy amount of inflation in service of reducing unemployment. Inflation is not an across the board evil; the gains from UBI would outweigh any inflationary costs.
Will UBI replace existing welfare programs?
UBI will supplement and not replace non-means-tested social safety net programs that cover healthcare, housing assistance, childcare, food, etc.
In addition, UBI will also supplement all existing disability benefits, including SSI, since many disabled individuals rely on their SSI eligibility to receive Medicaid and Long Term Services & Supports (LTSS), which cannot be covered by $1000/month alone.
UBI will also enhance Social Security retirement benefits, since people pay into these benefits throughout their lives. That money belongs to them.
For means-tested (based on income level) social safety net programs, studies have shown that they often trap their recipients in poverty if they wish to continue receiving benefits, and discourage people from earning additional income or finding a job. Thus, means-tested welfare programs that can be replaced by $1000/month should not be included with UBI.
By providing every adult with a $1000/month UBI, with the programs listed above, we can provide every American with a financial floor to stand on. This money is given with no strings attached and is not dependent on one’s employment status, empowering each recipient to obtain a job and seek additional income on top of the $1,000/month UBI instead of spending countless hours proving eligibility for means-tested benefits.
But wouldn’t providing $1,000/month UBI discourage people from working or finding work?
No. In fact, decades of research on cash transfer programs within our nation (e.g. Alaska) and across the world have found that the only people who work fewer hours when given direct cash transfers are new mothers and kids in school. In several studies, high school graduation rates rose. In some cases, people even work more. Quoting a Harvard and MIT study, “we find no effects of [cash] transfers on work behavior.”
Well, wouldn’t people spend the $1,000/month UBI on dumb things like drugs and alcohol?
No, not according to the decades of research. Decision-making has been shown to improve when people have greater economic security. Giving people resources will enable them to make better decisions to improve their situation. As Dutch philosopher Rutger Bregman puts it, “Poverty is not a lack of character. It’s a lack of cash.”
In many of the studies where cash is given to the poor, there has been no increase in drug and alcohol use. Rather, many people used it to try and reduce their alcohol consumption or substance abuse. In Alaska, residents regularly put the petroleum dividend they receive from the state into accounts for their children’s education. The assumption that poor people will be irresponsible with their money and squander it is rooted in biased stereotypes rather than truth.
Wouldn’t employers start paying less?
No. UBI will actually empower workers, because with consistent, unconditional cash to cover expenses, every U.S. citizen would be able to be more selective about the working conditions they are willing to accept. With an increase in bargaining power, workers would have the leverage across the board to fight for higher wages and benefits and strengthen what has long been a stagnant labor market.
Is providing $1,000/month a partisan issue?
If you see who has talked about Universal Basic Income in American history, they are leaders on both sides of the aisle. UBI has been championed by people of all political backgrounds.
For conservatives, providing UBI means less red tape, less bureaucracy, and less government involvement in people’s lives, because the $1,000/month would be given consistently and without a complicated application process. For liberals, providing UBI means leveling the playing field and providing equal access, opportunity, and assistance to all.
So, who’s supported Universal Basic Income before?
It was first supported in America by founding father Thomas Payne, who referred to basic income payments as a “natural inheritance.”
UBI and similar cash programs began picking up steam in the mid 20th century during the industrial revolution as early as 1918. With developed countries producing more than ever, the idea resurfaced with intensity being backed by numerous Nobel-Prize-winning economists such as Milton Friedman and F.A. Hayek.
In the 1960s, Martin Luther King Jr. gave his support, alongside over 1,000 economists from over 125 universities who signed a letter to President Nixon requesting income guarantees.
The idea of a guaranteed income floor was proposed in Congress under President Nixon in 1970. It passed in the House of Representatives but stalled in the Senate because Democrats sought a higher guaranteed income.
Universal Basic Income is not new – it is an old idea whose time has come.
Is providing Universal Basic Income a form of Communism or Socialism?
Communism is a revolutionary movement to create a classless, moneyless, and stateless social order built upon shared ownership of production. In contrast, the core principle of socialism is the nationalization of the means of production – i.e. the government seizes Amazon and Google. Providing $1000/month to U.S. citizens is neither of those things -- the government and private corporations will continue to exist. UBI simply gives citizens a base amount of cash to help provide for their essential human needs.
The purpose of the government is to provide for and to promote the well-being of its citizens, and the redistribution of funds into UBI payments will accomplish this goal by providing a financial floor for all people to stand on.
Shouldn’t job training programs help with automation?
They should, but unfortunately not. The goalposts are now moving – by the time someone goes through a retraining program, the job they were retrained for could have changed or been automated. Technology is going to get better and better. It will also be hard to keep track of who merits retraining. If a mall closes, do the retail workers get retrained? How about a call center?
The Trade Adjustment Assistance (TAA) program, a Federal program for displaced manufacturing workers, was found to have only 37% of its program members working in the field of work they were retrained for. (Click here.) Michigan’s No Worker Left Behind Program found that one-third of its members remained unemployed after the program, similar to the 40% unemployment rate of their peers who did not enroll. (Click here.) About half of all Michigan workers who left the workforce between 2003 and 2013 went on disability and were not retrained for a new job.
Many of the workers who are most at risk for displacement are middle-aged or elderly. Many have health problems. Retraining will be difficult and many employers will prefer to hire younger employees with lower job requirements.
Though training programs are a great idea, we should acknowledge that we’re historically very bad at it even when we know displacement is happening. Retraining a massive population over a range of industries is unrealistic and won’t address the displacement caused by new technologies.
Why give $1,000/month to the rich as well?
Yes, Universal Basic Income will really be universal. By giving everyone $1,000/month, the stigma of accepting cash transfers from the government disappears. Additionally, it removes the incentive for anyone to remain within certain income brackets to receive benefits. However, by implementing progressive taxation in the UBI system, we can ensure that the rich pay taxes like the rest of us do.
What about differences in the cost of living for major cities and rural areas?
Every eligible recipient of the $1,000/month Universal Basic Income, regardless of location, would receive $1,000 a month. Varying the dollar amount by location would add expensive layers of bureaucracy. Because the UBI payment is given by the federal government equally to all citizens regardless of their state of residence, UBI would actually help many more Americans live where they want to and move freely across the nation. Moving requires a lot of money up-front, and $1,000/month would increase mobility for people and families and improve the dynamism of the labor market as people seek out new environments and opportunities.
Since $1,000 a month goes farther in some places than others, providing an equal UBI payment would lead to a revitalization in many communities, because people would be able to move easily to areas with lower costs of living compared to expensive metro areas.
What other effect would this $1,000/month basic universal income have on the economy?
The Roosevelt Institute found that adopting an annual $12,000 basic income for every adult U.S. citizen over the age of 18 would permanently grow the economy by 12.56-13.10 percent—or about $2.5 trillion by 2025—and it would increase the labor force by 4.5-4.7 million people. (Click here.)
Putting money in people’s hands grows the economy, particularly when those people need the money and will spend it. In our district alone, UBI payments of $1,000/month would bring an extra $500,000,000+/month of additional income into the community, most of which would be spent locally. Then imagine that situation playing out in every community across the country, big and small. Districts all over America will have more vibrant local economies, creating more jobs and leading to new businesses.
