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Sunday, March 3, 2024
The Observer

The bipartisan case for a Universal Basic Income

To most, a Marxian society and a society where everyone receives an annual income from the government do not sound too different. However, the second could exist in a world radically different than a Marxian one; it could exist in our world. In fact, this idea has gained momentum even within conservative and libertarian circles. But, how could an anti-big-government individual unironically believe in a Universal Basic Income?

To begin, conservatives do not disagree with the notion of aiding the low-income; after all, proof of a poverty trap in the United States is undeniable. Additionally, the advent of automation has begun to drive the division between capital and labor exponentially apart, which worsens economic inequality. Wise conservatives understand these issues yet disagree with current programs, which show minimal results yet create large bureaucracy. Traditional entitlement programs have proven to be ineffective due to burdensome requirements, government bureaucracy and diminished ease-of-access. While inequality expanded since 1996, the number of families on public assistance in the U.S. declined from 4.6 million to 1.1 million. In addition, our current welfare state has added to the poverty trap. As earned income increases from $15,000 to $30,000, realized income remains the same due to lost subsidies and added taxes which has created a substantial unemployment trap. With this in mind, it surprises no one that conservatives want a new system, so then the question turns to which system would best provide necessary aid to the impoverished while minimizing government interference.

Enter the Universal Basic Income (UBI). This radical solution to a pressing issue may not be as radical as most people believe. Alaska, one of the most conservative states, implemented one in 1976 through building a fund which they invested in the oil industry; the returns are distributed to all citizens through a dividend. Alaska has found overwhelming success. The Alaska Permanent Fund reduced poverty rates in Alaska by 20 percentmaking Alaska one of the most equal states in terms of income inequality.

Many critics will argue that such a policy will breed government dependence; however, this argument ignores the fact that the income will not be enough to cover all expenses, let alone luxury items. In fact, the UBI has the opposite effect; since it provides a safety net for individuals, it aids the unemployed in finding jobs, which is one explanation for why Alaska found a 17 percent increase in part-time employment since implementation. The most in-depth economic simulation done on a UBI shows that it has the potential to expand the U.S. workforce by 1.1 million jobs. Granted, this model is the first of its kind and could use some tweaking.

Perhaps the strongest argument against a UBI resides in its cost. However, the program would be funded similar to the Alaskan program; a fund would be created and invested into technology fields in the United States. The Fund would be citizen-owned, and, once it gained enough money to start paying individuals dividends around $2,000 yearly, it would. Such an endeavor would cost a significant margin of upfront fees, but those fees will be offset by the saved fees years down the line when certain welfare programs, which cost the U.S. $1 trillion annually, could be saved. Additionally, the UBI can counteract any negative spending impacts through improving the economy in other significant ways. The UBI will spur small business and innovation by providing a safety net for individuals. In addition, the UBI ensures consumer demand as inequality worsens; this demand is vitally important because decreased consumer demand — caused by worsened income inequality — has been the operating force behind most of the economic downfalls in the United States, including the Great Depression and the Great Recession. As such, the UBI is economically feasible.

The Universal Basic Income is an idea of the future; while it may not be fully fleshed out, the concept holds promise as being a way to redefine the welfare system in the United States. There is no denying, according to modern standards, the idea is radical. However, radical can only be defined in societal contexts as straying from the norm. Straying from the norm is often better than sticking with it.

 

Gregory Miller is a first year in Duncan Hall studying ACMS and Economics, with a minor in Constitutional Studies. The viewpoints expressed in this column are those of the individual and not necessarily those of BridgeND as an organization.

The views expressed in this column are those of the author and not necessarily those of The Observer.