Universal Basic Income?

The current trends for employment seem to be heading toward a train wreck.   There is a strong push to lower labor costs as more and more work is being outsourced to lower wage labor pools around the world.  In fact, slavery seems to be on the comeback.  Free trade agreements, although not advertised as such, have lower labor costs as a main goal among others.  At the same time, we now have a demand for a living wage, that is, a wage that a full time worker can raise a family on.  I can’t help wondering, as higher wages drive up costs, will higher wages actually result in greater spending power?  

Technology is also putting severe pressure on the job market as much of the unskilled labor market has been supplanted by machines.   Competition for fewer and fewer jobs is driving down wages even more.  Some say that the future of employment lies in higher skilled, information-intensive work, but countries like India and Brazil are also aware of those trends, and are supplying lower wage labor for those jobs also.  

Our final hope for jobs is thought to lie in innovation.  Innovation happens most readily when a large and diverse number of concerns are working in many directions at once.  An economy whose corporate organization is becoming more and more monolithic is mitigating against this kind of ideal innovation environment.

When we reach an impasse like this, it usually helps to see if the basic elements of a system are still viable, and if there might be some other way forward that works better.

One such idea that is being considered is Universal Basic Income, which is just what it says:  giving everybody an income that is neither keyed to any job nor needs-based.   You could call it a dividend earned as a member of the human family.  Although the concept of unearned income has been pioneered by our financial industry, the idea of everyday small folks getting something for nothing really flies in the face of everything we hold to be right and decent!

In fact, Finland is considering instituting a non-means-tested stipend of 800 Euros a month to all its citizens.  Switzerland is also considering it.  Now, those are two fairly staid and prosperous countries, so what relevance could this idea possibly have for a dynamic and diverse country like ours?  

In an article by Laurie Penny, “What Would Society Look Like With Universal Basic Income?”, the practical aspects of this seeming blasphemy are explored:
“‘If we don’t disconnect work and income, humans will have to compete more and more with computers,’ Michael Bohmeyer (creator of My Basic Income, an experiment in Germany) explains. ‘This is a competition they will lose sooner than we think. The result will be mass unemployment,” he says, “and no money left for consumption.’
The organizing principle of modern economics is that without the threat of starvation, homelessness and poverty, people will not be motivated to work. There is no such thing as individual gumption or community spirit: human beings, left to their own devices, will inevitably sit on the sofa and eat crisps until the species collapses into a quagmire of entropy and episodic television. Fear, therefore, is necessary.”  Is it?

In Bohmeyer’s experiment, “39 people, chosen at random from a pool of applicants, have received €1,000 a month through the scheme–and almost none has spent the year twiddling their thumbs. One quit his job at a call centre to retrain as a pre-school teacher; another found that the removal of daily stress about work and money cleared up his chronic illness. Others found fulfilling jobs, having given up on the prospect years earlier, and almost all have been sleeping better, worrying less and focusing more on family life. What would society look like if that sort of freedom were available to everyone: if advances in technology and productivity could benefit not only the very rich, but all of us?”

I can’t help thinking, since the Federal Reserve creates money when needed and gives it to banks as lending capacity, why not just adjust the basic income as needed and inject the money directly into the economy, giving it directly to consumers?

Another aspect of this that intrigues me is that few of us would have to earn money doing work we found disagreeable.  Ironically, that means that all of us may have to do for ourselves the work that we may have previously hired someone to do for us.  This is work that we all, especially women, have traditionally done ourselves, the work that has never been credited as “work” in the GDP of the official economy, i.e. changing diapers, cooking, cleaning, mowing the lawn, etc.  It could be a blessing in disguise. There is plenty to be said for the intrinsic physical and spiritual benefits of doing menial tasks!

This is something that I suspect Bernie Sanders would endorse if the idea of unearned income for the unwashed were not now such a heretical idea.

Comments?  
terry@vashonloop.com