Why would a Labor Leader Support a Universal Basic Income?

12. 09. 2016

Here’s why I thought it was so important to join with a diverse coalition in launching The Economic Security Project.

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It might seem unusual to find a labor leader’s name on a letter with CEOs, libertarians, game designers, technologists, futurists, and venture capitalists, calling for every American to get paid a basic income without having to work for it. After all, aren’t labor leaders supposed to advocate for workers, and jobs and wages?

Here’s why I thought it was so important to join with a diverse coalition in launching The Economic Security Project.

Americans are working harder than ever, but are still losing ground. The story is all too familiar: Wages have been flat for 90% of Americans for decades. Income inequality is at pre-depression levels. Unions have largely been busted or faded away, taking the middle class with them. Manufacturing jobs have fled or been mechanized. Companies are upending the old social contract of work and transferring a massive amount of risk and cost onto workers. Job security is largely a thing of the past outside of a few privileged professions. For many working Americans, work itself is coming apart.

Voters on both the right and left are fed up with the lack of political action in response to these crises. If our nation is one of the wealthiest in the world, why do almost half of American workers make less than $15 an hour, despite huge increases in educational attainment over the past half century? If the stock market is reaching historic highs, why is chronic economic insecurity now a pervasive fact of life for so many?

This pervasive anxiety has abetted the rise of far-right politicians across Europe and now in the United States. Economic stagnation and uncertainty increases the appeal of extreme politicians. The draw of authoritarians and demagogues who promise to roll back economic and social policies to the 1950’s will only grow unless we meaningfully address working class economic insecurity.

Politicians say they want to ‘bring jobs back,’ but the solutions they most often offer are slashing regulations, wages, and unions. This trickle-down approach simply diverts more of the proceeds of increasing productivity to shareholders and corporate executives, which means workers have less money, which means businesses have fewer customers, and there are fewer, not more, jobs.

Technology is already responsible for an increasingly rapid churn in the job skills needed to make a living. However, we simply don’t know yet if the current wave of technological advancements is actually going to lead us to the “jobless future” predicted by Martin Ford, author of Rise of the Robots and by former SEIU President Andy Stern in his book Raising the Floor. In the past, technology has always ended up creating more jobs than it destroys; as MIT economist David Autor notes, automating a particular task tends to increase the demand for human workers to perform the other non-automated tasks around it.

But if the most recent technological revolution — including robotics, communications, and computational power that is leading toward big leaps in artificial intelligence– does turn out to be a departure from our past experience, we will indeed need to be ready with policy solutions. A universal basic income is among the most promising ideas to address the vast gains that would be accrued by this increased productivity. As Autor said, “If we automate all the jobs, we’ll be rich — which means we’ll have a distribution problem, not an income problem.”

Even if we don’t approach a jobless future anytime soon, there is still plenty of evidence that reliable jobs or incomes are becoming a thing of the past. And we are not about to dig ourselves out of this quicksand; if anything, we’re getting dragged more deeply in. The evidence of the past three decades show that a high GDP, high corporate profits, and high stock market valuations do not translate into high wages or abundant employment opportunities for American workers. Corporate earnings now represent the largest share of the gross domestic product in American history — and wages the smallest share of GDP (which Robert Reich terms “the Great Redistribution”.)

The labor movement’s job has always been to ensure that workers get a fair slice of the economic pie. That slice used to consist of higher wages and benefits, as well as safer and more equitable workplaces. We’ve been winning higher minimum wages around the country, and those wages have made a real difference for lower income workers. But the overarching forces that are holding down average wages and full employment, and transforming the nature of jobs and work, are now too powerful and entrenched for our much-weakened labor movement to directly defeat.

A basic income is an end-run around the failings of modern economies to provide a decent life for their citizens. A sufficient basic income would:

· Reduce poverty — particularly the national shame of millions of Americans, most of them children, living in extreme poverty.

· Reduce harmful levels of income inequality, which drives health and social problems. (Even wealthy citizens in highly unequal societies are unhealthier than those in more equal societies, which has led researcher Ichiro Kawachi to deem inequality a “social pollutant”.) At extreme levels, inequality can drive social unrest — what venture capitalist Nick Hanauer calls ‘the pitchforks coming for us plutocrats.’

· Support a strong social and civic structure and help families. Secure middle class people have the time and impetus to participate in their communities and the political process, as well as their children’s lives and educations. Low-wage workers are not just hurting for money — they’re hurting for time. MIT researchers estimate that a typical two-adult, two-child family now needs to collectively work more than three full-time jobs to earn a living wage.

· Allow people to receive compensation for vital but traditionally unpaid work such as raising children, caring for elders, and managing a household.

· Drive consumer spending and by extension, business creation and more employment opportunities. The basis of a consumer economy is spending — and not just by the minority who can afford more than the basics.

· Spur increased entrepreneurship and innovation. Research shows that where basic income has been tried, it is not a substitute but a supplement to employment. Instead, a basic income would encourage business creation by freeing up time from other paid work, and reducing the consequences of failure. And the U.S. could desperately use an infusion of fresh entrepreneurial energy: Economists have been sounding the alarm that we are facing an “innovation crisis” in which, over the past 30 years, the rate of start-up formation in the United States has slowed markedly. Fewer startups are opening their doors, and older firms increasingly employ a larger percentage of Americans. As Danny Vinik writes in Politico, “Instead of a dynamic economy driven by the frequent birth and death of firms, the U.S. economy is instead filled with aging behemoths.” A successful real-world example? France recently reformed its unemployment laws so that people can retain their jobless benefits while starting a new business, without fear that they will have nothing to fall back on if their business fails (a 2014 study found that new businesses created due to the reform had similar growth rates as other startups).

· Partially remedy hundreds of years of discrimination. Black and Native Americans, as well as women, never got a fair shot at a system that is itself now disintegrating. The unemployment rate for black Americans has been roughly double that for whites since at least the early 1970s, and women still earn less than men despite being more highly educated. Dorian Warren, co-author of the first policy platform for Black Lives Matter also makes the point that for people of color, basic income could be an improvement on portions of today’s current safety net given that some benefits, such as food stamps, are “replete with paternalistic restrictions that rest on racist tropes about recipients and their consumption habits” while others, such as the Earned Income Tax Credit, “are significantly tied to work, which is problematic when structural racism continues to create so many barriers to black employment.”

Should I go on? A basic income would be one of the most ambitious social policy experiments in American history. We are only just beginning to discuss why a basic income is needed, and how it could be implemented. But it is among our best hopes to address the entrenched wage stagnation and advancing employment volatility and income insecurity faced by millions of American workers.