Last year’s presidential election showed the impact of the loss of jobs the country has experienced. Manufacturing plants that once employed many workers have disappeared or employ fewer people because of technology. That has left many angry and scared especially as some have had to resort to lower paying jobs or retraining or no job.
Older workers, lucky enough to receive longer unemployment benefits, must return to school. For example, one worker is 63 1/2. He’ll receive unemployment for 2 years while he attends school but by the time he’s finished, he’ll be at retirement age.
It also isn’t just about workers struggling. Some states, too, have struggled to meet their obligations to unemployment systems.
Are there some alternatives that might alleviate some of the fear and anger or that doesn’t have all the restrictions or requirements of some public assistance systems? Is it time to consider a different income system? It turns out there are a couple of alternatives and we’re going to look at one of them this week.
The alternative we’re looking at this week is called universal basic income, or UBI. A universal basic income plan provides everyone, no matter what their income is, with a certain amount of money just to cover basic necessities. It would eliminate the need for unemployment as well as welfare and other social programs. This idea is being floated not just in this country but around the world.
It also isn’t a new idea. It has some history in this country. It was first introduced in 1797 by Thomas Paine, much later in the 1960s by Dr. Martin Luther King, Jr., and by the economist, Milton Friedman. Dr. King believed it would help eliminate poverty and Milton Friedman believed it would eliminate citizens from having to pay taxes. During the Nixon administration, it had some bipartisan support. In fact, legislation for the program passed the U.S. House of Representatives but died in the Senate and has never been resurrected until recently.
Although a referendum on universal basic income lost in Switzerland last June, it hasn’t stopped others from trying. Recognizing the anger over the loss of jobs and realizing much of the job loss is coming from automation, Silicon Valley wants to help people with an experiment in universal basic income. One of the leading innovation companies will provide 100 families with a basic income for a period of six months to a year. In another pilot program, Ontario, Canada, will begin this spring on its own version of universal basic income. It will be the first North American experiment on UBI. Every citizen is to receive an income of $1,320 every month. Those with disabilities will receive additional amounts. The project will last three years. Other countries are also testing similar projects, too. Finland, the Netherlands, Scotland, Kenya, India and other countries are either looking at UBI or trying it as unemployment rises and poverty continues to be a problem.
Canada has tried UBI in the past so there is some information to tell how it can work but the info is limited. A small city in the province of Manitoba tried it in the ’70s. There is enough information to say the experiment worked. People did continue to work despite receiving a monthly check. Basic income was a specific amount and any working income made was calculated into the amount of basic income received. One person who participated said it felt good to know money was always coming in especially when her husband had an unexpected medical condition in the middle of the pilot. Even though that family had medical issues, available data showed the overall health status of the community improved.
Critics of UBI say it costs too much. They’re also concerned it could lower the incentive to work or complicate a sense of need or purpose derived from going to work every day. While UBI has received bipartisan support in the past, it is mostly supported now by conservatives. Those opposed to UBI say there should be more focus on jobs, increasing wages, social programs for those who need assistance, provide more jobs for those who work at those social programs, encourage unions, and help for those who provide care for family members. Some say there have been some experiments with a system such as UBI and they didn’t work. The other problem in the United States is healthcare. In many of the other countries experimenting with UBI healthcare is provided at little or no cost. Healthcare in the U. S., of course, is still a major cost for many.
Proponents of UBI, though, also stress other important considerations. There is more spending going on which helps the economy improve because people now have a safety net. It could also improve wages because of spending increasing. UBI does not have the restrictions as to how the money should be spent as there are with welfare benefits.
In addition, UBI helps to reduce or even eliminate the stigma of receiving government benefits such as unemployment and welfare. Having worked with worker adjustment committees during layoffs or closures, many people are ashamed or humiliated because they lost their job through no fault of their own so it’s even more of a humiliation for the need to receive assistance.
UBI may or may not work but it might put people on a more level playing field. It may help to reduce some anger as people complain about others receiving government benefits as they would receive a payment, too. It also may provide some dignity and security for those who can’t find work or work that pays so little it’s demeaning. What are your thoughts?
In a few weeks, we’ll look at another alternative