Raising the Floor: A convincing case for a universal basic income (for those with patience)

Raising the Floor by Andy Stern, Universal Basic Income, US economy

Before reading Raising the Floor, by Andy Stern, former head of the Service Employees International Union (SEIU), I had little reason to support the idea of a Universal Basic Income. It seemed a politically impossible idea fraught with the same risks of abuse that plague our current welfare system. But by the end of the book, I came away with a much more positive view towards an idea that not only seems possible but, in a lot of ways, inevitable in our job-scarce future.

For those new to the concept of UBI, it would provide a small stipend to each citizen, regardless of income. This year, Switzerland offered a referendum on a national UBI, which was narrowly defeated. A UBI would serve as a safety net so that citizens can seek meaningful work without having to take a paycheck at a soul-crushing job just to pay the bills. At first, it basically just sounds like an expanded version of our current welfare system without preconditions. But as Stern explains it, the UBI serves more as an impetus and mechanism for average Americans to become more responsible and entrepreneurial with their lives.

A fair warning: The book is slow-going at first. Stern takes a while (3/4 of the book to be more accurate) to actually get to the subject of the UBI. I spent pages wondering when he was going to get to it and why a book that’s supposed to be about UBI only contains about 50 pages delving into the topic. But just as a good thriller spends an hour setting up the plot, only to destroy you with the climax, Stern uses the first three-quarters of the book to set up a terrifying vision of our future world.

Johnny Five, Short Circuit, automation, robots

In short: The robots are coming!

That’s right. It’s not too surprising to find out that automation will make most jobs scarce in the future since it’s already happening. Just as the computer destroyed the typewriter industry and the internet is killing print journalism, the same will happen to industries such as transportation (self-driving cars), retail and manufacturing (consumer 3-D printing), and even healthcare (direct-care robots-yes, really). But the shocking part might be how soon this will happen. We’ve read about Tesla and Google’s attempts at perfecting the self-driving car and the spread of 3D printing. While these technologies aren’t fine-tuned enough to truly disrupt our economy, they’ll get there within five years. Once self-driving vehicles are a reality, you can say goodbye to the truck drivers, who makes up a sizable portion of our nation’s economy. UPS and FedEx will either adapt or be obsolete.

Switzerland, Universal Basic Income, protest

Scary stuff, but Stern uses this information to propel his argument for a universal basic income to offset these economic changes. We’ve seen how unemployment ravages our communities with the terrible drug problem inflicting small towns in Indiana, West Virginia, and others after the downturn in the manufacturing and coal industries. Contrary to what some people say, these industries aren’t dying because of China, but largely because of automation. And this is just the start.

The most intriguing part of the UBI debate is how it relates to our current welfare system. I previously envisioned UBI being a supplement to our welfare system, which includes food stamps and TANF (cash payments-what most of us think of as “welfare”), among a myriad of other programs. But in Stern’s view, UBI would replace these programs. We would start by scratching all public assistance programs, besides Medicaid (too politically risky with the elderly) and social security (paid from a payroll tax). With this fact in mind, one could see how the UBI could actually be politically palatable from a Republican or Libertarian point of view. The UBI would shrink government rather than increase it because the system would be simplified. No more having to qualify for public assistance. Rather, everyone gets a check. What you do with that check is your choice, but there will be no more after the money is gone, so you better have a plan.

Stern argues that the fixed amount will create more economically responsible citizens. We will no longer see people manipulate paperwork to receive benefits or make lifestyle choices (such as holding off on marriage) in order to get that check.

economy, money, 100 dollar bills, creative commons

UBI would certainly be expensive. Stern consults various economists, who offer an amount ranging from $1.5-$2 trillion, an astounding amount to be sure. Yet by eliminating public assistance, we’re already almost at the trillion mark. Add in some budget cutting in farming and oil subsidies, along with a cut in the military (the only questionable aspect) and we’re just about at the amount we need. So it wouldn’t be adding expenditures, but rather transferring funding from one place to another.

Stern also discusses the social benefits of a UBI. claiming that a nondiscriminatory payment clarifies how our tax dollars support our citizens, rather than picking and choosing citizens in which to fund. He offers convincing evidence that Americans will have more ability to live purposely because we’re not so bogged down with figuring out how to pay the bills.

My skepticism had me asking about the inflationary effects of such a program. If everyone is receiving the same amount, won’t prices simply rise to meet demand? After all, wouldn’t the division of wealth stay the same because the rich will still have just as much more relative to everyone else? But Stern rightly claims that we’ve been living through deflationary times for 2 decades now due to automation. Just think about that $200 computer in your pocket and how much that would have cost in 1970. This will only continue as technology improves at an even faster pace as more people work towards solving technological and infrastructure issues rather than taking that job at Starbucks. Speaking of which…

McDonalds, protest, low pay workers, minimum wage, Universal Basic Income, UBI

My 2nd concern was that of low-paying jobs. Who would work them? Wouldn’t places like McDonalds and Starbucks go out of business with the UBI-enabled economy? But the more I thought about this problem, the more I kept thinking, “Who cares?” I hardly see saving McDonalds as a good reason to ignore the UBI. These companies can always adjust to the new economic conditions by paying their workers more or getting into a different economic sector. It is the free market after all, with all it’s sink or swim goodness. Sure, if McDonalds paid its workers more, their prices would probably rise (although this hasn’t been completely proven), but keep in mind that we now have more purchasing power due to the UBI, so it balances out.

But certainly, the most surprising aspect of the book were the quotes from prominent right-wing thinkers like Charles Murray, who wrote Coming Apart, which studied the dwindling conditions of middle-class America. Murray fully supports the UBI as a way to shrink government and get out of the poverty trap that he claims our welfare system creates. And Murray isn’t the only right-wing thinker to support the idea. In fact, the idea of UBI has been thrown around for centuries, ranging from Thomas Paine, of Common Sense fame, to Martin Luther King. Richard Nixon even came close to initiating an early version of the UBI (then called the much more Republican-friendly “negative income tax”) before being defeated by Congress.

Stocked with this information and a more fully developed view of what a UBI would look like, the idea doesn’t seem so crazy. When you look at the head-dizzying complexity of our modern government, with multiple agencies doing redundant work and unlimited opportunities for corruption, it actually makes sense. Think about the bureaucratic simplicity in such a system where everyone receives the same amount.

It makes you wonder who will be the first politician to summon enough bravery to take a stand. Until then, I guess we’ll argue about building walls and emails.

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