But lately there ain’t been much work on account of the economy…”
Bruce Springsteen, Dolly Parton, Elvis Costello, hell, even Britney Spears have been giving voice to the working class struggle for years; but it is downright sobering to have folks from Wall Street and major consulting firms now suggesting that the most efficient and effective answer for the economic tsunami of change technology is bringing to the US economy would be some form of a basic universal income. This moves the idea into a position that requires thoughtful consideration, whatever one’s politics.
As a starting point, we need to be educated. Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream, (Public Affairs, 2016), the 2016 book written by Andy Stern with Lee Kravitz, both New Yorkers, argues that true economic prosperity will only be possible with a universal basic income (UBI) and walks us through what that means. Andrew Yang, one of the 2020 candidates for President of the United States (who grew up in Schenectady, New York!), has made the premise of the book the foundation stone of his campaign.
Andy Stern, the former president of the 2.2 million-member Service Employees International Union (SEIU) was a private citizen member of an 18-member bipartisan Presidential Commission created by Barack Obama in 2010 to identify "policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run." It ended up recommending a mix of spending cuts and tax increases.
Then, in 2010, Stern embarked on an odyssey to understand the current state and future of work. As a reference point, he dove into the past and examined the middle class lifestyle — once part and parcel of the American Dream — that has proven more elusive for average wage-earners in America over the past few decades to achieve or maintain.
He spent the next four years crisscrossing the country, talking to bankers, economists, labor leaders, CEOs (like Honeywell International’s David Cote), bankers (like Steve Berkenfeld), entrepreneurs, and innovative thinkers (like Geoffrey Canada of the Harlem Children’s Zone). Stern emerged with a stark perspective on the current and future impact technological progress will have on jobs and wages.
The result of his examination led to his book’s argument: true economic prosperity in the US will only be possible with a universal basic income (UBI).
He maintains that all workers — not “just” blue-collar workers — are threatened by increased reliance on technology and information technology to manufacture and create, well, everything. But instead of recoiling in horror at the notion of 3D printers building concrete houses, Stern argues that UBI, coupled with other policies that make “gig work” more palatable will remedy the problem of falling living standards.
Stern certainly isn’t alone: the notion of a state-run income guarantee dates back to the 1500s, with Sir Thomas More’s Utopia. In the 18th century, Thomas Spence and Thomas Paine argued for a UBI. Canada, Finland, India, and Namibia have all experimented with UBI programs.
In Raising the Floor, Stern argues that UBI’s time has come, and that the use of macro policy — such as the ones typically put forward by unions and presidential commissions — to juice the economy by supplementing the traditional job market with public infrastructure programs and a higher minimum wage, simply isn’t enough.
“But how will we pay for it?” a cynic may ask. Stern acknowledges that a national UBI would cost the federal government between $2 trillion and $3 trillion, depending “on the size of the grant and the number of Americans covered.” But just cashing out existing anti-poverty programs would raise $1 trillion alone. An additional $1.2 trillion could be raised by eliminating some or all of the federal government’s tax expenditures, plus a value added tax (VAT) of 5%-10% on goods and services could generate between $650 billion and $1.3 trillion.
That alone would fund a UBI of $12,000 a year.
At New York Makers, we know firsthand that balancing fiscal responsibility with the ineffably human and laudable desire to fulfill our intellectual, artistic, and creative ambitions — something we have been told as Americans, from infancy, is our right and our duty — is increasingly difficult in the current U.S. economy.
Beverly Friedmann, a writer for Reviewing This, tells us that UBI could help writers like her and others in creative fields.
“Workers would have increased flexibility and more stable wages with UBI,” she says. “With a UBI, there could be less overall governmental spend on traditional welfare programs and increased engagement and productivity rates for those who would normally not be working or underemployed.”
Plus, she adds, a UBI would help those caring for relatives, working remotely, or for those who want to return to school.
Emily, an artist based in Saratoga Springs, who didn’t want her last name to be used, agreed.
“UBI would stimulate the economy and give entrepreneurs enough financial wiggle room to be able to launch a new business that would in turn create jobs,” she said.
Others are less convinced. A Schenectady-based attorney who also did not want his name used, opines that even “discussing a UBI is pie-in-the-sky pointless. We can’t even come to an agreement on basic healthcare, and all I hear about is how we’re running out of money for social security and other welfare programs.”
We all want work-life balance. Can a UBI achieve that?
“We live in an era of fundamental economic change. Technology is transforming work and the workplace,” Stern writes in the concluding chapter of Raising the Floor. “If you believe, as I do, that our economy’s problems are structural, and that technology is very likely going to make decent-paying jobs harder to find, if you believe that our children and grandchildren deserve a more secure livelihood and an opportunity to achieve their dreams, then I invite you to join in a national conversation to raise the floor and shape the future of jobs, and the American Dream, with UBI as our guiding star.”
At New York Makers, we believe in the American Dream, which comes in many forms, and has evolved over generations, with small and large social and economic revolutions. What do you think: has UBI’s time come?
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