What if the Government Gave Everyone a Paycheck?

The New York Times
By Robert Reich

If climate change, nuclear standoffs, Russian trolls, terrorist threats and Donald Trump in the White House don’t cause you feelings of impending doom, you might think about artificial intelligence. I’m not just referring to big-brained robots taking over civilization from us smaller-brained humans, but the more imminent possibility they’ll take over our jobs.

It’s already happening. Robots and related forms of artificial intelligence are rapidly supplanting what remain of factory workers, call-center operators and clerical staff. Amazon and other online platforms are booting out retail workers. We’ll soon be saying goodbye to truck drivers, warehouse personnel and professionals who do whatever can be replicated, including pharmacists, accountants, attorneys, diagnosticians, translators and financial advisers. Machines may soon do a better job than doctors at scanning for cancer.

This doesn’t mean a future without jobs, as some doomsayers predict. But robots will almost certainly push down wages in all the remaining human-touch jobs (child care, elder care, home health care, personal coaches, sales and so on) that robots can’t do because they’re not, well, human. Even today, with technology having already displaced many workers, there’s no jobs crisis. The official rate of unemployment is at a remarkably low 3.8 percent. Instead, we have a good jobs crisis. The official rate hides millions of people working part time who would rather have full-time jobs, along with millions more who are too discouraged to look for work (many ending up on disability), college grads overqualified for their jobs and a growing army of contingent workers with zero job security. Blanketing all are stagnant or declining wages and vanishing job benefits. Today’s typical American worker earns around $44,500 a year, not much more than what the typical worker earned in 1979, adjusted for inflation. Nearly 80 percent of adult Americans say they live from paycheck to paycheck, many not knowing how big their next paycheck will be.

Advancing technologies aren’t the only cause of this predicament, but notwithstanding Trump’s claim to the contrary, technology is a bigger culprit than trade. The economy keeps growing yet most economic gains are going to a few — largely financiers and, increasingly, inventors and owners of the digitized devices that are replacing good jobs. Our economic system isn’t designed for this. If the trend continues, it’s unclear who will even earn enough to buy all the future robots.

Economic change on this scale doesn’t happen without something cracking. The shift from farm to factory featured decades of bloody labor conflict; the move from factory to office and other sedentary jobs caused more upheaval. What will happen when robots push most people out of steady work and into lower-wage gig jobs? I doubt we’ll see a revolution. A more likely scenario is a slow slouch toward authoritarianism and xenophobia. We may already be there.

What’s the answer? Here in the Bay Area where I live, where inventors and engineers are busily digitizing everything, many civic and business leaders are touting something called a universal basic income, or U.B.I. It’s universal in the sense that everyone would receive it, basic in that it would be just enough to live on and cash income rather than voucher-based, like food stamps or Section 8 housing. To the rest of America, a U.B.I. may seem like a pipe dream, but from my vantage point some form of it seems inevitable.

Several recent books have provided good background briefings for what a U.B.I. could be, including those by the labor leader Andy Stern, the Facebook co-founder Chris Hughes and the Belgian academics Philippe Van Parijs and Yannick Vanderborght. To these offerings, Andrew Yang, an entrepreneur, adds his own, somewhat breathless version in “The War on Normal People.” Annie Lowrey, a contributing editor for The Atlantic, provides a similarly upbeat, although more measured, assessment in “Give People Money.” Both are useful primers on the case for a U.B.I.

The two books cover so much of the same terrain that I’m tempted to wonder whether they were written by the same robot, programmed for slightly different levels of giddy enthusiasm. Both cite Martin Luther King Jr., Richard Nixon and Milton Friedman as early supporters of a U.B.I. Both urge that a U.B.I. be set at $1,000 a month for every American. Both point out that with poverty currently defined as an income for a single adult of less than $12,000 a year, such a U.B.I. would, by definition, eliminate poverty for the 41 million Americans now living below the poverty line. It would also improve the bargaining power of millions of low-wage workers — forcing employers to increase wages, add benefits and improve conditions in order to retain them. If a U.B.I. replaced specific programs for the poor, it would also reduce government bureaucracy, minimize government interference in citizens’ lives and allow people to avoid the stigma that often accompanies government assistance. By virtue of being available to all, a U.B.I. would not only guarantee the material existence of everyone in a society; it would establish a baseline for what membership in that society means.

U.B.I.’s critics understandably worry that it would spur millions to drop out of the labor force, induce laziness or at least rob people of the structure and meaning work provides. Both Yang and Lowrey muster substantial research to rebut these claims. I’m not sure they need it. After all, $12,000 a year doesn’t deliver a comfortable life even in the lowest-cost precincts of America, so there would still be plenty of incentive to work. Most of today’s jobs provide very little by way of fulfillment or creativity anyway.

A U.B.I. might give recipients a bit more time to pursue socially beneficial activities, like helping the elderly or attending to kids with special needs or perhaps even starting a new business. Yang suggests it would spur a system of “social credits” in which people trade their spare time by performing various helpful tasks for one another. (I.R.S. be warned.) Surely a U.B.I. would help compensate many people — especially women — for the unpaid labor they already contribute. As Lowrey points out, some 40 million family caregivers in America provide half a trillion dollars of unpaid adult care annually. Child care has become so expensive that one of every three stay-at-home mothers today lives below the poverty line (compared with 14 percent in 1970).

But how could America possibly afford a U.B.I.? A $1,000-a-month grant to every American would cost about $3.9 trillion a year. That’s about $1.3 trillion on top of existing welfare programs — roughly the equivalent of the entire federal budget, or about a fifth of the entire United States economy. Both Yang and Lowrey come up with laundry lists of potential funding sources — from soaking the rich (raising the top tax bracket to 55 percent, enlarging the estate tax and implementing new taxes on wealth, financial transactions and perhaps even the owners of the robots and related devices that are displacing jobs), to instituting a carbon tax or a value-added tax.

Whatever the source of funds, it seems a safe bet that increased automation will allow the economy to continue to grow, making a U.B.I. more affordable. A U.B.I. would itself generate more consumer spending, stimulating additional economic activity. And less poverty would mean less crime, incarceration and other social costs associated with deprivation. “You know what’s really expensive?” Yang asks. “Dysfunction. Revolution.”

If these measures still aren’t enough to foot the bill, Lowrey suggests making a U.B.I. less universal by taxing away U.B.I. payments to high-income earners and reducing other forms of social insurance (for example, eliminating food stamps and welfare programs). As a last resort, she writes, a U.B.I. could be implemented as a kind of negative income tax, by which government simply ensures that every person or household has a certain minimum yearly income. This is what Richard Nixon and Milton Friedman had in mind. Lowrey figures that the cost of such a guarantee would approximate the current total costs of the earned-income tax credit, supplemental security income, housing assistance, food stamps and school lunches. She notes that the simplest way to achieve this would be to transform existing antipoverty programs into unconditional cash transfers.

But there’s a logical flaw in her argument. Once a U.B.I. is no longer universal or even basic (what if the poor are worse off when other forms of assistance are stripped away?), it’s hard to see the point of having it in the first place. More troubling is Lowrey’s blurring of the distinction between a U.B.I. that redistributes resources from the superrich to the growing number of vulnerable lower-income Americans and one that merely turns programs for the poor into cash assistance. The latter may be warranted, but it wouldn’t touch America’s growing scourge of inequality and economic insecurity, which will be made worse as robots take over good jobs.

A core challenge in the future will be how to redistribute money from the ever richer owners of the robots and related technologies to the rest of us, who are otherwise likely to become poorer and less secure. This is not just an economic challenge but also a political one. As we know from recent history, vast fortunes translate directly into political power, and such power effectively resists redistribution. Sadly, neither of these authors discusses how to deal with this paradox.

A world inhabited only by robots, their billionaire owners and a large and increasingly restive population is the plotline for countless dystopian fantasies, but it’s a reality that appears to be drawing closer. If we continue on the path we’re on, we will need to make fundamental choices about how to support human livelihoods and ensure equal participation in our economy and society. Most basically, we will have to confront the realities of vastly unequal economic and political power. Even if we manage to enact a U.B.I., it will not be nearly enough.

Annie Lowrey
Give People Money