Is Universal Basic Income the new safety net?

By admin
July 11, 2020
4 min read

The poverty level in the United States is considered to be below twenty-five thousand seven hundred dollars, but this is a fifty-six-year-old analysis. In 1964 Lyndon B. Johnson, the 36th President of the United States, took a poverty tour of the United States and discovered that there were many people in the U.S. that lived a penurious life. President Johnson and his administration discovered that 19% of United States citizens lived in poverty.  President Johnson then declared the War on Poverty. Fifty-six years ago, people spent a third of their monthly budget on food but today one-eighth of one’s monthly budget is spent on food … the rest is spent on housing and child care. If you look at poverty overall, it has dropped to 15%. It may seem that not as many people live in poverty, but the truth is more people are in poverty. Poverty in the suburbs is growing and these suburban communities have not been able to keep up, so far, with the growing needs of their proletarian constituents. More Americans have moved from the cities into the suburbs where no safety net exists.

Universal Basic Income is the idea that it is every citizen’s right to receive a certain monthly cash stipend that will serve as a safety net and keep them above the poverty level. Universal Basic Income is an idea that many people support because they think it can rid our society of poverty and make us all better off as a country. We can see an example of Universal Basic Income in Stockton California where Mayor Tubbs is testing this idea out. Mayor Tubbs’ administration is giving each citizen of Stockton five hundred dollars a month. If this experiment of Universal Basic Income can improve the lives of many in Stockton and provide a safety net to many, then this experiment will become permanent. If you are wondering who is providing the funding for this experiment it is Chris Hughes, an entrepreneur and co-founder of Facebook. Chris Hughes is a believer of this new safety net. He states that because of our new gig economy we need a new kind of safety net. Research shows that when people receive a modest amount of cash, they use it to improve themselves and their life … they do not use it on alcohol or drugs as proponents of UBI would have you believe.  

Another experiment using the Universal Basic Income idea is being driven by entrepreneur and CEO of OpenAI, Sam Altman. This experiment involved 1500 people. One group of people will receive fifty dollars a month and the other group will receive fifteen hundred dollars a month. At the end of this experiment Sam Altman and his team at OpenAI will analyze these two groups and study the changes, if any, in the participants’ lives. Sam believes that we should not fear Artificial Intelligence. When AI does arrive the cost of goods and services will decrease dramatically; and there will be plenty of money to go around. It will be at this point when Universal Basic income should truly be universal and given to all citizens.

For some it is hard to understand why someone would need financial help when they have a job. We could talk about how salaries have not kept up with inflation, but that might a topic for a separate article. But simply put, companies are sitting on cash and not raising wages. What are they doing with the money? They are returning it to shareholders. So, the rich get richer. Companies do not view investing in their employees as an option but investing in employees has fantastic results.  Josh Birsin, a contributor to Forbes magazine, writes “when a company raises the wages of all its workers, including the frontline service workers, something entirely different happens. Employees feel more committed; their financial lives become less stressful; they are proud to be part of the company; their attitude and service to customers and client get better. In fact, the company’s employment brand becomes more positive, so every position now attracts more committed, passionate, ambitious people – and ultimately the company performs better.”

If you can free people from the worrisome nature that survival brings (keeping a roof over your head and finding food to eat), you can unlock their potential and create value to the world. Universal Basic Income will do this … it will free people of the constraints of survival and give them a greater future.   

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