Goldman-Sachs: $207.7 billion. JP Morgan Chase: $485.6 billion. Morgan Stanley: $115.9 billion. Bank of America: $457.1 billion. Boeing: $8.3 billion. General Electric: $2.6 billion. Walmart/Walton family: $7.8 billion. McDonald’s: $1.2 billion
Look closely at the corporations’ figures above. What do they have in common? They’re very wealthy. They’re mostly banks. They’re private corporations. What about the numbers? They’re profits, right? Wrong. Those numbers are not indicative at all of what each corporation makes. They are what each received in government subsidies, i.e. corporate welfare, as of last year. This is what you and I are handing to these companies despite their record profits and what they are–or are not–paying their employees.
Conservatives love to complain about those “lazy takers” who just “need to pick themselves up by their bootstraps”. Superficially that sounds rugged and characteristically American. We have always prided ourselves on being people who succeed despite the odds. Beneath the surface, though, it exposes a very ugly, malevolent tradition of demonizing the poor or those who simply just need a little more help “picking themselves up by their bootstraps”–single parents, children, people slaving away at multiple minimum-wage jobs while getting educations, owing more money in loans to the very financial institutions they’re helping subsidize than they can ever reasonably pay back. Never mind that the examples above are a paltry modicum of companies bilking American taxpayers to the tune of $1.539 trillion per year; America never picks on the big guy, especially when that big guy owns most of the politicians (mostly republicans) in Washington. It’s easier to repeatedly kick the same people when they’re down. The reality is, the three main programs needy families depend on most–Temporary Assistance for Needy Families, food stamps, and the Earned Income Tax Credit–cost just $158.5 billion in total. Translation: we spend ten times as much on corporate welfare and handouts to the top one percent than we do on working families struggling to scrape by. Now that the Democratic platform includes raising the federal minimum wage to $15 an hour, perhaps it’s high time we start a conversation about something with which some European social democracies are experimenting: a guaranteed minimum income. After all, we can’t expect people to “pick themselves up by their bootstraps” unless they have boots.
I’m not an economist by any stretch of anyone’s imagination, but one thing I fundamentally understand is that in order for an economy to remain viable, it needs circulation. We at the bottom or middle rungs of the pecuniary ladder can’t afford to squirrel money away in the Cayman Islands or Switzerland like our more affluent brethren. We have to spend it. Therefore, putting a little extra in our pockets can stimulate a troubled economy, and it would actually reduce people’s need for public assistance in some cases.
According to a June story in The Guardian, “Universal basic income has a rare appeal across the political spectrum. For those on the left, it promises to eliminate poverty and liberate people stuck in dead-end workfare jobs. Small-state libertarians believe it could slash bureaucracy and create a leaner, more self-sufficient welfare system.”
This is the tack Charles Murray takes in his June piece “A Guaranteed Income for Every American” featured in the Wall Street Journal, a publication not known for leaning liberal. Murray sees a universal basic income (UBI) as a means to eliminate all social welfare programs–attractive to libertarians and conservatives– and corporate welfare, appealing to progressives.
On June 5, Switzerland became the first country to vote for such a change. The Swiss Federal Council’s ballot measure proposed $2,500 a month for adults, and $625 a month for children. Despite the majority of Swiss voters ultimately rejecting this proposal at the ballot, the initiative’s co-founder, Daniel Straub, is optimistic the initiative at least got people talking. “Five years ago, only about a hundred people in Switzerland had heard the term ‘universal basic income’,” Straub said. “Now everyone is debating it, and acceptance levels are rising.”
Finland and the Netherlands have decided to experiment with it next year. Ditto for Ontario, Canada. In France, several Parliament members and the finance minister support it. Here at home, Sam Altman, the president of Y Combinator, a San Francisco-based startup, announced he was planning a basic income study.
The concept is not new. Andrew Flowers articulates the history of basic income in his FiveThirtyEight piece “What Would Happen if We Just Gave People Money?” Thomas Paine’s 1797 essay “Agrarian Justice” calls for “a national fund making payments of 15 pounds sterling to each adult over 21 years old.” British philosopher Bertrand Russell supported it, as did former Louisiana Governor Huey Long, urging us to “Share the Wealth.” In his 1967 book Where Do We Go From Here: Chaos or Community? the Reverend Dr. Martin Luther King, Jr. wrote: “I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” Even President Richard Nixon’s plan for a partial basic income passed the House of Representatives before failing in the Senate. By that point, basic income was no longer a bleeding-heart leftie’s utopian fantasy; myriad notable economists theorized its impact on societies the world over.
Clearly, the concept of basic minimum income appeals to those on the right and left of the economic and political spectrum, but theorizing and implementing are often two very different things. For one thing, would it really be beneficial to cut all social welfare programs, as conservatives and libertarians suggest? There would have to be an inevitable debate over which programs a basic income would supplant. For example, libertarians (and many republicans) would jump at the opportunity to eliminate Social Security, something democrats and progressives are fighting hard to expand and preserve. Simply handing money to Americans who have sacrificed some of their salaries for the guarantee of Social Security when they retire may actually do more harm than good. We also do not want to undermine the prospect of medicare for all, aka universal health coverage. Eliminating the Affordable Care Act with a “healthcare savings account” is something republican lawmakers have proposed, and they could use the concept of a basic income to make it appear more attractive. Moreover, how “basic” a basic income is requires another debate. Does every American receive the same amount? If so, at what age? Does it expire? Does one’s current socioeconomic status matter? Does the income fluctuate based on employment status?
Opponents of a basic minimum income will argue it will make people “lazy”. They’ll ask why people should work if the government is just going to pay them regardless. Good point, and not one that has gone unnoticed. Roope Mokka, the founder of the Nordic think tank Demos Helsinki, said the experiment in Finland “is likely to involve 5,000 to 10,000 Finns being paid a basic income of €500 to €700 a month — considerably less than the average Finnish income of €2,700.” This means Finnish citizens are still going to have to work. The minimum income will be merely supplemental. At the very least, it will assist those currently unemployed and allow them to continue participating in the economy until they find jobs.
Another claim from opponents may be that people will simply spend the government’s money on drugs, alcohol, cigarettes, or any other conceivable harmful habit. Also a legitimate concern, but one purely based in pessimism and fear. I’m sure if those of us reading this were handed a couple hundred dollars a month, we wouldn’t run out and spend it on drugs, hookers, and booze. We might be able, though, to make that extra mortgage principal payment. We might be able to buy new cars or afford the repairs on our current ones. We might now be able to pay for little Johnny’s braces, or take the family on a much-needed vacation. Until college is offered tuition free, we might even be able to use some of that additional disposable income to take a class or two, thereby improving our profit potential and standard of living. Consider as well those of us who may be working occupations we despise simply because they’re lucrative. I had many peers in college who majored in business or computer science simply because they were told that’s where the jobs were. Some of them were genuinely interested in these fields; some were not, and pursued them under the expectations of impressive salaries and less time submitting resumes. Under a basic income system, we would all have a little more freedom to work to live instead of live to work.
A third counterclaim may be that question we all love to ask: “Where are we going to get the money?” I urge you to scroll back up to the first paragraph and read the figures again. Again, this is what the federal government hands corporations simply for the right to do business. To my knowledge, Exxon Mobil is doing quite well. In fact, between 2008 and 2010, General Electric, ExxonMobil, Verizon, and nine other corporations, paid a negative tax rate despite collectively recording $171 billion in pretax US profits, according to an analysis by Citizens for Tax Justice. Their tax burden, collectively, was $2.5 billion. So, where do we get the money? From them, of course. Raise their taxes. Do what Hillary Clinton is proposing and impose a fine on corporations that do business elsewhere and get to reap the benefits of the American tax code. If we can afford to hand over $1.539 trillion per year to corporations, we can certainly afford to assist those who really need the money most. We will all benefit as a consequence.
I conclude with an anecdote. This weekend by seven-year-old daughter had a sleepover. Her friend who slept over is the child of a single mother who works two minimum-wage jobs. This mother also recently sprained both her ankles, but can’t afford to take the time off work to convalesce properly. If she doesn’t work, she doesn’t get paid. That could be catastrophic for her and her daughter. Ironically, I started writing this piece before the sleepover had been planned, but now that it’s finished, I can appreciate how much that mother and daughter might benefit from knowing that no matter what happens, there will be some income upon which to rely. Not a panacea, a guaranteed minimum income is a progressive proposal with enormous potential. When some of the dust clears after November, let’s start shaping the conversation for 2020.