Within the progressive movement in the U.S., there is momentum growing for the idea of implementing a universal basic income.
A universal basic income is a regularly distributed no-strings-attached sum of money given to all people regardless of income aimed at reducing poverty.
Pilot programs for a universal basic income have taken place across the world, including in Canada, Brazil and Alaska. Finland has been running a two-year-long experiment with universal basic income which ended in December 2018, and the findings in a new report about its effectiveness are astounding.
The report, which was released by the Finnish government agency Kela, found that over the course of the program, the participants were under less stress even when ends were still hard to meet and there was an increased trust of other people and social institutions.
The experiment gave a monthly check of 560 euros, or $635, to a randomly selected group of 2,000 unemployed citizens with the initial goal of increasing employment.
The most important finding was that the experiment “made recipients happier without making them any less likely to join the workforce,” crushing the idea that free money will disincentivize work.
Here in the U.S., Andrew Yang is a 2020 Democratic presidential candidate running on a platform to integrate a universal basic income, called the “freedom dividend.”
Yang is proposing to implement a universal basic income for the whole country similar to the Alaska Permanent Fund which gives annual stipends to Alaskan residents funded through oil and mineral leases.
Alaska’s program began in 1976 under Republican Gov. Jay Hammond and it has been wildly popular with no decrease in full-time employment and a 17% increase in part-time employment, according to a study published in the National Bureau of Economic Research.
Although the Alaska Permanent Fund is not seen as a true universal basic income, it has shown promising results along with other pilot programs. With Yang’s freedom dividend, he proposes to tie the program to automation in the tech industry, just like Alaska’s program with oil and mineral leases.
Universal basic income has a broad appeal from both the right and the left. Intuitively, the program sounds like throwing away a bunch of money at everyone, but its proponents frame it as citizens keeping their own money rather than handing it over to the federal government.
This is the line of reasoning Republicans use when promoting the Alaska Permanent Fund — people prefer to keep their own money over lowering taxes. This is how Yang phrases his freedom dividend: Americans are regularly losing millions of manufacturing jobs to automation, so why should all the benefits go to Silicon Valley oligarchs?
According to a study by the Roosevelt Institute, a universal basic income program in the U.S. would likely be about $1,000 per month per person and would permanently grow the economy by up to 12.56-13.10% — about $2.5 trillion by 2025 — and it would increase the labor force by 4.5-4.7 million people.
This program would use mostly money already in the economy so there would not be rampant inflation — Yang would fund it through a value-added tax on the tech industry.
Originally a right-wing idea with supporters like Milton Friedman, a universal basic income is popular across the political spectrum.
The right sees universal basic income as less government interference while also limiting poverty, enabling work and boosting the free market. The left views it as “social security for all,” promoting the welfare state and equality.
Programs like Finland’s are showing the world that this myth of the “lazy poor” is just a stereotype and that a universal basic income would not just benefit the poor but everyone.
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