The Argument for Universal Basic Income
September 25, 2020
At the beginning of March, the United States was surprised by COVID-19. Businesses shut down as people feared a virus that was new. On March 23, Michigan Governor Gretchen Whitmer announced a stay-at-home order for the state. All non-essential businesses closed, including restaurants, who were only allowed to offer take-out and curbside service.
Soon after the shutdown announcement, I was called in for an all-staff emergency meeting at one of my jobs, a restaurant downtown. Confused and worried, I went to go pick up my paycheck and await the news.
For the first time, I was laid off from a job. A setback, but my partner still had his job at a medicinal cannabis dispensary. Everything would be fine since we had his income. Two days later, he was laid off when that business closed. We found ourselves with no income, and the unemployment website was impossible to get through with the flood of others like us.
Filing an unemployment insurance claim (UIA) was a nightmare. The system was backlogged, servers overrun, people desperate. Pandemic Unemployment Insurance (PUA) was introduced as a stimulus of extra money for people on UIA—an extra $600 a week. It took us seven weeks to finally get our unemployment and PUA benefits. During that time, a one-time stimulus from the government was given to people, and NMC gave us emergency aid as well.
Once the benefits went through, we were making much more money than we had before. Even before COVID, each month we had a detailed Excel spreadsheet that noted every penny earned and every penny spent. We moved money around because at the end of the month there was never enough for all of our basic needs. Suddenly, we were able to pay all of our bills, buy groceries, purchase things we wanted, and still had money left at the end. We paid off the emergency credit cards and a loan, got the car repaired and new tires. For once, we were comfortable.
The state remained closed, but we were able to purchase bikes for the family. Not the trashed used ones we got at a yard sale, bikes with brakes. Before the pandemic, I worked multiple jobs and did school full time along with homeschooling our son. My partner worked two jobs and went to dialysis three days a week. We didn’t have time or money for fun. Our lives were spent with my partner and I tag-teaming someone being home with our son. In the past three years, we have spent only holidays together. Now we were going to parks, riding bikes, and walking around.
This breathing room, without the burden of money problems, allowed us to finally relax and be a family. We hadn’t realized how stressed and miserable we were. We never had a day off together and every hour was monetized to use for its best financial gain.
PUA benefits have ended, but it does not have to be the end. Universal Basic Income (UBI) is an income given to citizens by the government, a basic stipend without work requirements. Standard UBI is a $1,000 monthly payment. Politicians in the United States, such as recent Democratic presidential candidate Andrew Yang, have brought up UBI in the past—only to be shut down.
Americans have issues with “welfare programs.” It is seen that if you do not sweat and bleed for that dollar, you do not deserve it. When Yang was campaigning to be the Democratic presidential nominee, he discussed UBI and its uses. Yang knows that jobs are disappearing—not because of immigrants or jobs moving overseas, but because of automation.
Yang believes that we could move the country to
Photo courtesy of Randi Upton
Randi Upton and her son, Anders, enjoying time together outdoors.
automation and let UBI take care of the necessities. Some people would retain their jobs, but that is not a reality for every assembly line worker.
Another argument against UIB is that if people are given money that they didn’t work for, it would be spent on tobacco, alcohol, and drugs. A study by Massachusetts Institute of Technology that monitored spending has shown that with a UBI given unconditionally, there was a 0% effect on alcohol and tobacco spending. Studies since the 1970s, funded by Give Directly, has shown that the only reduction in hours worked—a 5% decrease—were those of new mothers.
According to The World Bank, “Currently, no country has a UBI in place, although there have been (and still are) several small-scale pilots and a few larger-scale experiences.” The World Economic forum in August stated that Germany began a three-year UBI trial study with 120 citizens participating. Each participant will receive €1,200, or $1,400, per month. Norway has the closest system to UBI. As a welfare state, Norwegian citizens are ensured access to fundamental goods such as health care, education, and income. However, a report by World Population Review describes that there are stringent conditions that must be met such as “requiring citizens to try and find a job, be law-abiding, participating (voting) in elections, and paying taxes.”
Within the United States, Alaska has the Permanent Fund Dividend, an annual dividend collected from oil pipeline profits and given to people who are residents of the state for at least six months of the year. However, due to the variable nature of the annual payment amount, whether or not this is considered UBI is arguable. “Such payments should be unconditional, extended to everyone, and generous enough to live on,” University of Alaska economist Mouhcine Guettabi told Science News in Oct. 2019. According to Guettabi, the dividend “amounts to too little to support the third criterion.”
Other U.S. cities are exploring the idea of UBI, and the city of Stockton, California, is at the forefront. Stockton launched its UBI pilot in Feb. 2019. For this pilot experiment, 125 residents receive $500 monthly payments. The Guardian reported in March that 40% of participants’ monthly spending went toward food. On May 28, Stockton mayor Michael Tubbs extended the pilot, originally scheduled to end this summer, through Jan. 2021.
As America continues to stay at home even though PUA has ended, it’s time to look at alternatives. A little bit of breathing room with money can be a life changer.
Universal Basic Income is the future.