Universal Basic Income and Living Wages

Citizen Wealth Financial Justice

New Orleans  A call from a reporter in Honolulu surprised me. He wanted to talk to me about UBI, universal basic income. It seems that the legislature in Hawaii had passed a resolution to study UBI for the islands. That was surprising news to me. It also turned out that the angel behind the online news paper, Pierre Omidiyar, was also involved in a small UBI experiment in Kenya outside of Nairobi. There’s a much touted experiment involving 2000 people in Finland where they are trying to substitute UBI payments to the unemployed for welfare payments. There’s the annual division of oil revenues in Alaska through their trust which makes annual payments to residents there every calendar year in the $1200 to $1500 range. Andy Stern, the former president of the Service Employees, wrote a book about it recently. What’s up?

Omidiyar, the former Ebay whiz, gives credence to the flurry of interest around Silicon Valley which connects some of these pieces. The spin is that the techies are finally coming to grips with the fact that automation will actually decrease jobs in the future as it has done so in the past by millions, rather than the mirage they had maintained in the past that technology would always create new jobs for the ones they replaced. Soaring cost of living has also put the wind in the sails of faster track increases in the minimum wage to $15 per hour. Seattle of course broke the ceiling several years ago and is now moving in that direction with dueling studies recently out arguing both sides of the debate on whether jobs were lost or hours cut as a result of the raise. Other cities around the Bay Area in San Francisco and around Silicon Valley are also increasingly moving forward on a drive to $15 per hour as well.

These are hopeful signs that some policy makers might finally embrace the notion of a guaranteed annual income. I would love the old slogans for the National Welfare Rights Organization that I chanted in my early days as an organizer with our members, “Adequate Income Now” and $5500 or Fight” turning into something other than nostalgia.

The Finnish experiment shows both the promise and the problems. As described in The Economist, 2000 of the 10% unemployed in the country were picked by lottery for the 2-year trial. During that period these workers are guaranteed $624 per month unconditionally. They are monitored from afar and the real results of the experiment won’t be known until the end of the trial period. Surveys “show the wider public wavering: 70% like the idea of the grant in theory, but that drops to 35% when respondents are told that income taxes…would have to rise to pay for it.”

Proponents and architects of the study worry that two years is not enough time and that the money furnished is not enough to test. Especially, because some of the researchers and advocates want to measure how the “psychology of beneficiaries changes.” Unions in Finland are skeptical because they see all of this as an effort to trim unemployment benefits and protections, and of course part of the push for this is cutting welfare benefits.

We’re a long way from a victory parade, but it is encouraging that some politicians and policy makers are at least getting these ideas out in the streets where they have a chance to find the solid ground and march forward.