Seems that the notion of a universal basic income has gained traction since I last blogged on it. Or perhaps it’s regained traction, since it’s had moments in the spotlight dating back to the Nixon administration.
Two books, I think, account for this. One is by Andy Stern, the former president of the Service Employees International Union. The other, by Charles Murray, isn’t brand new, but rather a second version of his 2006 book.
Stern tees up a UBI because, he says, the growing uses of technology will create more low-wage jobs — and fewer jobs altogether — regardless of our traditional policy solutions, e.g., investments in infrastructure, minimum wage increases.
Murray also cites the impending replacement of human workers by robots and the like. But that’s not the real reason he argues for a UBI.
He comes at his proposal from the far right, just as Stern comes at his from the left. He’s indebted to conservative economist Milton Friedman, whose negative income tax bears some resemblance to his UBI.
But he’s also a surprising heir apparent of the traditionally liberal architect of Nixon’s Family Assistance Plan — an early stab at ending welfare as we knew it. And of liberals whose labels need no qualification — Martin Luther King, Jr., for example.
He’s among less strange bedfellows at the right-leaning American Enterprise Institute, which has him on the payroll and published his book. Helped him promote it too by hosting a dialogue between him and Jared Bernstein, who’s in a relatively comparable position at the left-leaning Center on Budget and Policy Priorities.
That’s what got me started on this post, though I’ve thought of returning to the UBI for some time. So here’s the pared-down final draft, focused solely on Murray — what he advocates, why and why we who advocate for low-income people should care.
Murray would have the federal government give every adult citizen $13,000 a year. Nothing, one notes, for children, though they do cost money.
Nor for immigrants who aren’t citizens, but live here legally, including those who qualify for major safety net benefits if they’re poor enough.
But there’d be no such benefits. Murray would blow away all so-called transfer programs, both safety net and social insurance, i.e., Social Security and Medicare.
His privileged adults would have to spend $3,000 of their UBI for health insurance — not nearly enough for a policy that kicks in before very high out-of-pocket costs. They could, of course, spend more for a better policy, if they had the money.
If they didn’t, they’d be left with $10,000 for all other expenses — $1,180 less than the current federal poverty line for a single person. Murray admits that’s not enough to live on.
He seems to think that more people would work — or work for longer hours and/or higher wages — because they’d no longer have the “disincentives” built into safety net programs, i.e., the fact that benefits phase out and ultimately end as incomes rise.
Those purported disincentives probably don’t cause the vast majority of poor and near-poor people to remain so when they could instead earn enough to support themselves and their families.
But they too aren’t the main reason Murray wants to do away with all safety net and social insurance programs — obviously, since the latter mostly benefit people whom no one expects to work.
Not, of course, instead of donating to faith-based and other nonprofits that help our poor neighbors — many of which we taxpayers also collectively support through grants from federal programs.
The civil society Murray refers to is somewhat like the one House Speaker Paul Ryan claims our federal programs crowd out. But it’s also individuals. He suggests, for example, that a guy who’s got just that $10,000 a year could live with his girlfriend. (Not making this up.)
He also, however, thinks that the $10,000 would halt the declining marriage rate — and enable people, notably women to choose not to work. So they could “contribute their social capital” as they don’t now.
Set aside, if we can, this hostility to women in the workforce and the nostalgia for a golden age that never was. The Murray-type UBI may seem appealing mainly because it’s simple.
We do have a lot of programs exclusively for poor and near-poor people, though not so many as conservative opponents claim. And they do form a complex maze of differing eligibility requirements, administering agencies and the like.
All gone. Instead, a monthly deposit in your bank account. (Yes, you would have to have one.) And if you’re not dirt poor, you’d better keep some of your UBI there because Murray’s plan includes “clawback” tax on incomes over $30,000.
It would nevertheless transfer more of what we pay in taxes to people who need the extra income less. At the same time, more would need more than they do now — the elderly especially, though not us only.
One can imagine a UBI that replaces only programs for low-income people and gives them enough to live on, plus some to save for emergencies and investments that will make life better for them and their kids, e.g., a college education, a supplement (not replacement) for Social Security retirement benefits.
That’s what King had in mind for his “guaranteed income,” which would have been pegged to “the median for our society” and increased as total national income grew.
But even a UBI lower than Murray’s would cost an enormous amount. At $10,000 a year, it would consume about three-quarters of the entire federal budget — and nearly all the tax revenues the federal government collects, according to Center on Budget estimates.
So, of course, there’d be no money for safety net programs — or many other things we value, e.g. public education, medical research. And, as Bernstein noted, our economy would lose the corrective effects our responsive safety net programs provide during downturns.
Well, our federal policymakers won’t replace all our safety net and social insurance programs any time soon. Large majorities support them — Social Security and Medicare most of all, but the principle underlying safety net programs too.
So why should we concern ourselves with anything like the Murray plan? In part because it’s a better arrow in the quiver of anti-government types like him — and has been for a long time.
But also because versions, more and less fleshed out, span the political spectrum. And one can see how some form of guaranteed income could help reduce poverty.