Annie Nova, of CNBC, recently interviewed Karl Widerquist to ask about proposals for an Emergency Universal Basic Income during the twin crises of the coronavirus and the stock market meltdown. Some people have seen the latter as a positive thing, however, with intrepid sorts jumping onto the market after reading some robinhood app reviews and learning the way it works.
To prevent millions of Americans from running out of money amid the coronavirus, the government has announced plans to send out checks to them soon.
When Treasury Secretary Steven Mnuchin made the announcement about the cash infusion on Tuesday, universal basic income proponents felt validated. Now, the group of those calling for such a policy, if only in a temporary rendition, is quickly growing. Already some 1 in 2 Americans say they support a program in which the federal government sends out regular checks to everyone, regardless of their earnings or employment.
Tech entrepreneur and former candidate for president Andrew Yang centered his campaign on a $1,000 universal basic income. He dropped out of the Democratic primary last month, but now the hashtag #YangWasRight is taking off on Twitter.
As the pandemic forces schools and businesses to empty, Democratic senators, including Cory Booker of New Jersey and Sherrod Brown of Ohio, have called for immediate $2,000 payments to adults and children below a certain income threshold. Meanwhile, Sen. Mitt Romney, R-Utah, proposed giving every American adult $1,000.
CNBC spoke with Karl Widerquist, an associate professor at Georgetown University-Qatar and a founding editor of the journal, Basic Income Studies, about how a cash infusion could help Americans. (The interview has been edited and condensed for clarity.)
Annie Nova: Why do you think the Trump administration is considering sending cash directly to Americans?
Karl Widerquist: Some people have no other choice but to go to work, whether they’re sick or whether their child is sick, and it’s really not good to keep this threat over the heads of our entire working class. But the economy needs money and it needs money to go into the hands of people who will spend that money.
AN: Why is this policy preferable to the payroll tax cut the administration was also considering?
KW: The payroll tax is slower to take affect and it only effects formal workers. Informal workers, contract workers, the self-employed, single parents, children and the homeless need this money more than anyone else, but they’ll be left out by the rebate.
AN: How would a cash infusion make this less of a crisis?
KW: In very important ways. You’ve got a bunch of people who’ve been told, ‘Don’t go to work. Stay home. We don’t need you to wait tables and cook meals.’ And these people need to eat. That’s the first line. But it also has ripple effects across the entire economy. The stock markets are tanking, in such an enormous and rapid rate, that it implies we’re going into a very steep recession right now. During a recession, not everyone can find work, but we need them to keep up their spending because when they don’t spend, then the businesses where they buy stuff, they lose money and they go out of business. That increases unemployment. It’s what we call in economics a multiplier effect. So a universal basic income is going to keep people working by keeping people spending.
Annie Nova, CNBC
AN: These proposals often call for giving children money, too. Why?
KW: We give money for children because that’s why parents work. Parents have to go into work because their children need food, shelter and clothing. They need to pay the rent for the rooms in which their children live. If a bunch of people are having to stay home from their jobs, if they’re unable to pay their rent and if they’re unable to buy food, their children are going to suffer.
AN: Sen. Romney recommended a $1,000 payment. Some Democrats up to $4,500. How much is enough?
KW: Replacing people’s entire income is not necessarily what you want to do. That preserves existing inequality. If I’m staying home from my $100,000 a year job as a university professor, and the person next to me is staying home from their job as a minimum-wage dish washer, I shouldn’t get any more than they do. What you want to do is stop income from collapsing, and the best way to keep it from collapsing is to make sure everybody has a minimum amount.
AN: What could go wrong with the payments?
KW: I’m a little worried about the conditions. When you put conditions on at a time like this, when we’re in an emergency, there are problems. You waste money on figuring out who’s eligible and who isn’t and then you make mistakes. You’re going to give it to some people who don’t deserve it, and you’re going to deny it to some people who do.
AN: You have politicians on the left and right getting behind this cash infusion. Does that surprise you?
KW: The increasing polarization in this country is really sad to see. Hopefully, once in a while, we still can pull together. Both sides of the aisle are recognizing this is really a double crisis, with coronavirus and the stock market collapse happening all at the same time.
The Department of Political Economy at King’s College London will host a full day interdisciplinary workshop on “The Ethics of UBI in a Changing Economy” in London on April 24, 2020.
The workshop focuses on Universal Basic Income from the interdisciplinary point of view of Philosophy, Politics, and Economics. Suggested topics include but are not limited to
Sufficiency, equality, and the threshold for UBI
Political economy and the institutional challenges of the Fourth Industrial Revolution
Unemployment and the citizen: conditional benefits or universal dividends?
Enhancing freedom and autonomy in a changing economy
Relational equality and democratic empowerment
Open borders and the limits of the welfare state
The workshop tackles the theoretical issues surrounding the normative justification(s) for UBI and evaluate the practical feasibility of UBI in comparison to competing policy responses from a political economy perspective.
The organizers invite abstracts from scholars in various disciplines, including but not limited to political economy, citizenship studies, philosophy, and political theory. We especially welcome contributions from underrepresented groups in academia.
To apply, send your abstract of 300 words through easychair (first time users may have to register): https://easychair.org/cfp/EUBI1
The deadline for abstract submission is February 28, 2020. Limited conference stipends will be available to speakers. The results will be announced within two weeks of the deadline. Accepted attendees will be asked to submit a manuscript (5000 words) by April 10, 2020.
If you have any further questions about the workshop, please send an email to the following address: otto.i.lehto@kcl.ac.uk. (Please do NOT use this email address to submit abstracts or papers.)
The event will occur on Monday 28th to Wednesday 30th of September 2020, and is entitled “Basic income, the ecological crisis and a new age of automation”. Submission of abstracts can be done until Friday January 31th, 2020, considering the following main themes / questions:
Can basic income play a role in tackling the multifaceted ecological and social crises confronting the world today?
As climate change and the ‘new age’ of automation continue to re-shape the globe, can and should basic income form part our answer to these challenges?
Can basic income be part of a Green New Deal or is a Job Guarantee a better way forward?
Can basic income promote ‘de-growth’ and genuine sustainability?
Should automation and digitisation be used as a justification for basic income?
What is the evidence regarding the impact of these technological processes on the availability of jobs?
Is basic income an adequate replacement for any technological unemployment that may occur (now or in the future)?
The 41 minutes long documentary focuses on Universal Basic Income (UBI), retracing its history, explaining its rationale, and investigating why and how the idea has reached a much larger audience and unprecedented support in the last years.
It does so with though many poignant interviews with prominent exponents of the UBI community, as Van Parijs, Guy Standing, Daniel Raventòs, Scott Santens and many others. “UBI, our right to live” makes a compelling argument for the necessity of the measure, is a manifesto for UBI in the present day, and is an excellent introduction to the subject.
The documentary addresses two of the main drivers that are bringing UBI at the center of the public debate: economic inequality and technological development. The two themes are correlated, as economic inequality has reached unsustainable levels, and automation may make it even worse, if not handled in the proper way. The risk is the increase of unemployment and growing inequalities between high and low skilled workers.
UBI could eradicate poverty altogether, and if it were to be financed through progressive taxation, reduce inequalities. Moreover, it would provide an economic safety net for workers, and thus endorse them with more bargaining power when it comes to choose a job. People could decide how to focus productively their energies in order to contribute to society and give meaning to their live, rather than being forced in unfulfilling jobs just to survive. Nobody would be left alone, as it is bound to happen under the patchwork that present-day welfare is.
The fruits of technological advancement, if distributed via a UBI, rather than accumulated in the hands of the few, may help to shape a more just future, as this is what UBI is about (something that the documentary highlights): UBI is about justice and fairness, not charity.
It’s the instrument meant to redistribute what belongs to each and every person, the natural extensions of human rights in ensuring to everybody a standard of living adequate for a human being.
In July 2016, the Liberal government of Justin Trudeau introduced Unconditional Basic Income to Canada and never mentioned it to anyone.
6.4 million Canadians can count on benefiting from about $500, tax-free, every month, no questions asked. It contributes $46 billion per year to GDP and adds $4 to GDP for every dollar it costs.
It’s called the Canada Child Benefit (CCB).
Why have we not heard that this program is, in fact, a Basic Income? When the Ontario government announced the abrupt cancellation of the Basic Income Pilot Project involving 4,000 low-income people after a few short months, it was all over the news. A permanent nationwide Basic Income involving 6.4 million Canadians and their parents (19 million people in total) runs for three years with stunning success and not one word in the press.
Indeed, I have spoken with many Liberal Members of Parliament who all express dismay and disappointment at the lack of visibility the CCB has among their constituents. Yet Canadians know how Basic Income works because one has existed for close to 70 years.
“In 1951, following an amendment to the British North America Act to permit the federal government to operate a pension plan, the Canadian Parliament passed the Old Age Security Act, which provided a universal pension, or demogrant, of $40 per month financed and administered by the federal government. All Canadians aged 70 and over who could meet the more liberal residence requirements were eligible, regardless of their other income or assets. Pension payments began in 1952 and were taxable.”[emphasis added]
Who was in power in 1951? Louis St. Laurent’s Liberals!
Why focus, in this discussion, on only one Party? Is that partisan politics? Some background:
The October 21st election is the perfect crucible in which to forge a new narrative about Basic Income in Canada. The centre-left Liberals of Justin Trudeau, whose father was prime minister from 1968 to 1984, swept into power in 2015 after a decade of Conservative rule. The progressive New Democratic Party is thinking about Basic Income on a 30-year timescale. The Green party is demanding more tests. Only the Liberals can point to action, although they refuse to admit it.
So, while Liberals can legitimately claim both a long history and recent accomplishments in implementing permanent Unconditional Basic Income programs (UBI), the public has no idea that here are two examples of highly successful implementations, hiding in plain sight! Both were introduced by Liberal governments and no one knows about it.
There is no mainstream recognition that Basic Income is a fait accompli in Canada. Sadly, many of the cognoscenti also resist this paradigm shift.
Yet a recent independent report sponsored by UBIWorks, shows that the CCB is not only an Unconditional Basic Income, but it is also a highly successful one for families and the economy. The report makes the following key points:
Canada has demonstrated the effectiveness of a national-scale Basic Income
6.4 million Canadians benefit from about $500, tax-free, each month
The CCB directly touches approximately 19 million people. This not a test.
The CCB is an ongoing national program that has been running successfully for over 3 years
The CCB contributes $46B annually to the Canadian economy – exceeding the economy of Nova Scotia
CCB-related spending drives $85B / year in revenues and $18B in gross profits to businesses
453,000 full-time equivalent jobs are contributed by the CCB, 2.5% of the Canadian labour force
Every dollar invested drives $2 of GDP and more than 55 cents of is recouped in taxes from economic activity
Therefore the CCB drives $4 of GDP for every net dollar it costs
The CCB has generated $27B in private capital investment and $77B in wage growth since its inception
The CCB has contributed to 3 years of economic growth, low inflation, and unemployment levels at record 40-year lows
Clearly, the Canada Child Benefit is a Canadian flavoured Basic Income which is as close as it gets to a UBI in the real world. It is a huge success hiding in plain sight. it is individual because strictly based on headcount and it is unconditional because you do not have to do anything special to deserve it, and you can do with it as you please, no questions asked. Furthermore, it is a regular, predictable, cash transfer paid monthly, for which you can sign up before you are even born. It is not means-tested. However, it is income-tested, which means wealthier families are phased out from the benefit. Does it deviate in some ways from the ideal, orthodox form of Basic Income? Of course! Where do we find ideal forms in the real world?
A similar demonstration can be made for Old Age Security. Since the facts show the economic impact of Basic Income for ages 0-17 and 65+, why not expand the programs to all those in between? Why not start right away with ages 18-19, who need the money to stay in school or get a good start in life, some other way?
As the incumbent Liberals struggle in the polls and are headed toward a minority government status in the October 21st elections, according to the latest projections, Basic Income advocates around the world can only look on in dismay at this missed opportunity to benefit from changing the narrative about Basic Income in Canada.
Although the nomenclature of Unconditional Basic Income (UBI) is notoriously anarchic, clearly the federal Liberal Party of Canada was considering such a plan. In the article, the Canadian Press reports:
“Prime Minister Justin Trudeau and Social Development Minister Jean-Yves Duclos have argued that the Liberal-created Canada Child Benefit, among other measures, amounts to a guaranteed minimum income already.”
Yet not a word about this, 28 days into the campaign, as I have reported above.
Unconditional Basic Income was never mentioned even if there is no question that it helps reduce poverty. This is just not the best argument to support it when powerful economic data is available.
Why the Trudeau Liberals have chosen not to play the UBI card, I couldn’t say. They may come to regret the mistake.
