Universal Income: Could It Solve America’s Wealth Inequality?
Income inequality was one of the main topics discussed in the 2016 election and does not seem to be disappearing in the near future. From the Rust Belt to the coasts, more and more people are feeling the effects of wealth disparity every single day. Wages are stagnating and jobs are being lost. This all while prices of food, rent, and healthcare are climbing.
There have been proposals on how to mend the widening gap between the have and the have-nots. We’ve seen it across the country. Minimum wage increases, tax relief, and a whole variety of other proposals. There are usually met with opposition and claims of unintended consequences.
The world is seeing worker productivity rising and overall wealth increasing. This with little to no gains towards the middle class and working poor. A new bold strategy needs to be developed. Whether you think globalization or illegal immigrants taking your jobs, the fact of the matter is the real issue. Automation.
No matter the wage of an individual a machine will always be cheaper. It doesn’t matter how great of an employee you are, a machine will always be able to perform faster. A machine is more accurate than any human. This is the harsh reality of our near future.
Automation will leave a significant portion of the population out of work. These people may have a list of things against them. Disabilities, the wrong set of skills, age, or experience; the list goes on and on. A higher minimum wage won’t help people without a job. Tax relief won’t help if you aren’t paying taxes in the first place because you don’t have a job.
A universal basic income (UBI) could solve the problem of automation. A UBI, according to basicincome.org, is a periodic cash payment unconditionally delivered to all on an individual basis, without means test or work requirement.
There are five characteristics of a UBI. They are periodic and not just a one full cash payout. It’s provided in a way to let the individual do whatever they want with the money. UBI’s are on an individual basis, not a household basis. It’s paid for everyone without a means test. Finally, a UBI is unconditional, meaning there is no requirement to work.
The merits and details can be worked out, but, in general, there are a lot of benefits to a UBI.
People will not have to pay bills immediately, allowing them to pursue job training where automation may not effect a specific job sector so heavily. UBI could also help workers not affected by automation take entrepreneurial risks they may not be able to afford now. A UBI would also allow Americans to work fewer hours while maintaining their current standard of living, giving them more time for caregiving and child raising. Putting money into the hands of workers to spend it would also improve the economy.
Of course, there are competing ideas on how a UBI would form. The left suggests more money for the poor and has it financed through taxes on wealthier Americans and corporations. The right suggests replacing other safety net programs, like social security, with a UBI. Some suggest expanding the current safety net to include all Americans. The point is the same goal of an income floor for every American.
From an emotional perspective, it relieves the pressure of shame that comes with using government programs. A lot of programs are means tested. When you use your EBT card or Medicaid, it’s a quick identifier that you are poor. The stigma that programs bring about can turn ugly. People sometimes judge you. They may not even believe you actually need these programs and are just a “moocher on society.” It’s also easier to cut and defund programs if only a certain segment of the population uses them, and half the country believes those people are taking advantage of the system anyway.
A UBI is a universal way of giving everyone money regardless of who they are. It instills privacy as to what they are doing with their lives. It puts money into the hands of people without embarrassing those who need help. UBI could drastically streamline and revolutionize the modern welfare state. It can cut back on the burden of bureaucracy and the red tape that comes with a means-tested safety net program. Our current programs are not going to be able to handle the challenges that automation is bound to create.