clock menu more-arrow no yes

The case for and against a universal basic income in the United States

Shutterstock

What would happen if we gave everyone free money, every year, forever, with no strings attached?

This is a concept known as a “universal basic income,” or UBI. The idea is to guarantee everyone some minimum amount of money so that no one has to live in poverty. And while it might sound a little crazy, the idea is being tested around the world — with pilot studies in Canada, Finland, the Netherlands, Kenya, and even one in the United States, based out of Silicon Valley.

In the most recent episode of the Weeds in the Wild podcast, we explored a Kenyan pilot experiment run by a nonprofit called GiveDirectly. They’re giving everyone in a small village around $22 a month for the next 12 years. We talked about how it might shape policies overseas.

In our reporting, we also talked to two people about something slightly different: what a universal basic income might mean here in the United States.

Bob Greenstein has been working on poverty-related policies for 45 years. He’s with the Center on Budget and Policy Priorities.

Andy Stern is a former national union leader.

Stern and Greenstein both like the concept of universal basic income and think that people could be trusted to spent a basic income appropriately.

But when it comes to making an American universal basic income a reality, the two have examined the same set of facts and come to fundamentally different conclusions. We spoke to Greenstein and Stern on different occasions, but we asked each of them questions about arguments the other had raised. We’ve put them into a kind of dialogue, so that they can address each other’s claims.

Would a universal basic income work in the United States?

Greenstein is skeptical of the idea. He worries, given his experience in the United States, that creating something like a UBI here would mean slashing other important safety net programs. And he doesn’t think it’s worth the trade-off:

UBI would replace virtually every program in the federal budget focused on low- or moderate-income people.

No food stamps. No Medicaid. No low-income housing. Forget child care. Head Start. Job training. Pell Grants to help people attend college.

You're going to have more deep poverty, homelessness and things like that. That's not what UBI proponents favor, I know. I've had discussions with people where they say, Bob, that's not what we're calling for! I know!

But what they're calling for? I don't see it in the US politically. I share the goals; I just don’t think you can get there from here. And I want to focus on progress we can make.

Stern argues that the US is losing jobs to automation and new technology, and is only going to lose more. He says we need to start getting very creative about ways to solve the problems that job loss will create. A universal basic income might mean cuts to welfare, Stern admits, but he argues that it would be an effective way to build bipartisan support, or “crossover.”

I think it's politically unfeasible in a ... world that, at the moment, politically, is controlled at a federal level by Republicans that we're going to hold on to the things that Bob says we need to improve upon.

I think you need crossover. And I think Bob is right that if you gave the Republicans a free rein, they would cut too many programs and hurt too many people, but I don't think that's the starting place for the discussion.

I am for getting rid of some of basic welfare as we know it. I would get rid of EITC [the earned income tax credit], food stamps, [and] unemployment insurance, and substitute cash for it. I would never touch, you know, Medicare, Medicaid, and Social Security. So I'm taking about half of the existing welfare programs and repurposing them for a universal basic income.

How would we pay for it?

The two also disagree about whether it would be possible to fund a universal basic income even if you did make cuts to welfare as we know it. Stern has a plan to offer $1,000 a month to every citizen between the ages of 18 and 64. He estimates it will cost around $1.7 trillion, and believes we could find that by shuffling around our tax code:

I think paying for things is always important. I say that there's $500 billion as part of the 122 current cash transfer programs that could be repurposed for this.

There's $1.3 trillion in sort of corporate tax expenditures, which mostly go to [the] middle and upper middle class. There’re tax breaks, you know, for things like charitable deductions or your second vacation home that most working people don't ever get to take advantage of...

People who've lived in other countries understand that we're the only country in the OECD that doesn't have a value-added tax of any level. You know, that would raise a tremendous amount of money.

So to me it's about political will, not a question of is there enough money in the United States.

Again, Greenstein doesn’t believe that’s politically feasible. He told us that a radical shift like this is unlikely to pass, especially since it involves the government giving cash payments to people without jobs. Policy change, he says, is incremental:

Yes, I know that UBI supporters, some of them, say, “No, no, we'll do huge taxes on the rich.” Well, we haven't done a really good job of getting them through. You completely lose the right side of your left-right coalition when you do that.

And besides, we're going to need very substantial tax increases in the years ahead just to shore up and prevent insolvency in Social Security and Medicare, to deal with other big problems like crumbling infrastructure, climate change...

If I thought the political culture in the US was like Western Europe, where you have much higher levels of taxation, and more universal support, I'd love that. I'm for that. But that's not the real world in the US.

The political culture and history of the US is very clear that policymakers and the general public do not support big cash payments for poor people who don't work, who don't have jobs, who aren't employed.

I don’t agree with that! I’ve spent years fighting that!

I have really learned in 45 years in the trenches that there is not the same kind of support in this country. I wish there were!

Wishing doesn't make it so.

I've been working here on poverty and budget issues since 1972, and what I've really learned is: Change comes incrementally in this country.

It's unglamorous. It's frustrating. It's imperfect. The name of the game is just to spend year after year, decade after decade, working as hard as you can.

If automation eliminates jobs, a basic income could be a solution

Stern thinks the loss of jobs to automation is going to change what is and isn’t politically feasible:

I think technology is gonna destroy the labor market as we know it, and it's going to create a desperate need to find solutions in order to provide social stability.

Wealthy people, historically — when there were riots in the ’60s, you know — were able to respond in order to in some ways protect themselves. But now their kids, middle-class kids, are going to be affected.

So I think there will be a growing political movement that includes middle-class people involved.

And, Stern adds, the policies Greenstein is fighting for may not be any more feasible than a UBI in the current political climate.

We're about to lose some of the most basic programs we had, like Medicare, potentially. I don’t think there's any proof that it's any more politically feasible to hold on to what we have than to build on a big new idea.