By Meera Jagannathan, MarketWatch
Robyn Beck/AFP via Getty Images
Entrepreneur Andrew Yang dropped out of the 2020 presidential race Tuesday after a lackluster showing in New Hampshire’s primary, but his campaign injected new life into the long-running debate over a universal basic income (UBI) policy.
Yang, who made a $1,000-a-month “Freedom Dividend” a centerpiece of his platform, said during a Wednesday interview with MSNBC’s “Morning Joe” that he planned to “keep pushing the ideas of this campaign forward.”
“If anyone wants my endorsement, all you have to do is come out for universal basic income,” he added. “Say every American should get $1,000 a month, and then I will be there with you on the trail the next day.”
Proponents of a universal basic income — including Tesla /zigman2/quotes/203558040/composite TSLA +0.17% CEO Elon Musk and Facebook /zigman2/quotes/205064656/composite FB -1.32% CEO Mark Zuckerberg — argue that it would help workers affected by job automation and provide Americans with a safety net.
About 36 million Americans — or 25% of U.S. jobs — have “high exposure to automation” over the next few decades, according to a Brookings Institute analysis published last year, with more than 70% of their tasks “at risk of substitution.” Jobs in food preparation, office administration, transportation and production are at greatest risk for automation, the report said.
But the concept of guaranteed income didn’t originate with 2020 Democrats or modern-day CEOs — in fact, figures as varied as Martin Luther King, Jr. , former President Richard Nixon and economist Milton Friedman have all backed versions of such a policy.
Some states and cities have implemented or considered a universal basic income. Alaska has paid out an annual Permanent Fund Dividend drawn from oil revenue since 1982 to each resident. (A 2018 working paper found that Alaska’s dividend didn’t appear to make recipients less likely to work .) 2019’s checks totaled $1,606 per person.
Stockton, Calif., which is currently piloting a monthly $500 payment among 125 low-income residents, has found so far that recipients are spending most of the money on food, clothes and utility bills, according to the Associated Press . And a Chicago task force last February recommended a $1,000-a-month guaranteed income pilot for 1,000 low-income participants.
A study released in 2019 on Finland’s UBI pilot program found that recipients reported greater well-being, less stress, improved mental and physical health and more confidence in their futures.
Meanwhile, a study released in 2019 on Finland’s UBI pilot program found that recipients reported greater well-being, less stress, improved mental and physical health and more confidence in their futures. However, the payouts didn’t improve their ability to find a job, the researchers found.
Critics of universal basic income maintain that giving people free money would discourage people from seeking out work and point out that such proposals often lack clarity and detail, and come with a hefty price tag.
A majority of Americans aren’t so hot on the idea: Just 43% of respondents to a 2019 Gallup poll said they supported a universal basic income program to help workers who lose their jobs because of artificial-intelligence advancements. In contrast, around three-quarters of respondents in the U.K. and Canada backed the idea of UBI.
Whether they call it a Freedom Dividend or a baby bond, some other current and former 2020 Democratic contenders have embraced the tenets of UBI. Here is what they’ve said:
Andrew Yang’s ‘Freedom Dividend’ proposal
Yang, a former corporate lawyer who promoted an exhaustive list of policy proposals , wanted to give $1,000 a month to every American over age 18 — a “no strings attached” policy meant to help workers sidelined by robots, artificial intelligence and other new tech innovations, he said. Yang noted on his website he would pay for this annual $12,000 “Freedom Dividend” by introducing “a new tax on the companies benefiting most from automation.”
“It would improve people’s health [and] nutrition, it would elevate graduation rates, it would improve people’s mental health,” he told CNN in April. “It would help people make transitions in a time of historic change.”
Shelling out $10,000 a year to some 300 million Americans would run a bill of more than $3 trillion a year, according to one estimate published by the Center of Budget and Policy Priorities.
Yang announced during September’s Democratic debate that he would give $1,000 a month in supporter-donated funds to at least 10 recipients for a year. Yang’s campaign claimed in a statement that its counsel had deemed the $120,000 in payments “fully compliant” with Federal Election Commission regulations, though some experts have raised concerns about the legality of using campaign funds.
“Tell us how you would spend $1,000 a month,” Yang said in a video posted to his Twitter account, directing followers to his campaign website. “Then if you win, you’ll get the money and you’ll get a whole lot of social media followers.”
Yang earlier launched his own UBI trial runs without the U.S. government’s economic might, personally funding $1,000-a-month payments for a year to three families in New Hampshire, Iowa and Florida, his campaign said.
The candidate picked up 2.8% of the New Hampshire primary vote Tuesday and nabbed zero delegates before announcing his campaign’s suspension.
Where the leading candidates stand
Bernie Sanders: Sanders, the winner of the New Hampshire Democratic primary, said in October that his federal jobs guarantee was the answer to fighting job loss from automation. He said the country would need to fill jobs in infrastructure, sustainable energy, child care, and other roles.
Asked during an Iowa town hall in April whether he supported Yang’s UBI idea, the Vermont senator replied, “Nah, I got a better idea.”
“Just think about it: You’ve got an infrastructure which is crumbling. We can put millions of people to work doing that. Transforming our energy system in terms of weatherizing homes all over this country, building a more efficient transportation system. Putting more money into wind and solar and other sustainable technologies,” Sanders said. “We can create millions of jobs doing that.”
‘We need more doctors in rural areas and in urban areas. We need more nurses. We have a dental crisis all over this country. We need to train dentists and get them out there.’
—Bernie Sanders, a Democratic presidential contender
He wasn’t finished: “Think about day care. You want a world-class child-care center? You need well-educated, well-trained, well-paid child-care workers. We need many of them,” the senator said. “We need more doctors in rural areas and in urban areas. We need more nurses. We have a dental crisis all over this country. We need to train dentists and get them out there. We need more social workers. You want to reform our criminal justice system? You’re going to need people to start working with prisoners. You want kids not dropping out of high school? You’re going to need mentors working with them.”
In sum, Sanders said, a better approach would be “guaranteeing a job in this country to anybody who is prepared to work.”
Sanders later emphasized in an August interview with Hill.TV that “people want to work” and “be a productive member of society.” He promoted the federal jobs guarantee over UBI.
Yang tweeted a rebuttal at the time: “Bernie ignores the facts that money in our hands would 1) create hundreds of thousands of local jobs and 2) recognize and reward the nurturing work being done in our homes and communities every day,” he wrote. “He also assumes that everyone wants to work for the government which isn’t true.”
Joe Biden: Biden, in a 2018 blog post for the University of Delaware’s Biden Institute, argued that jobs have value beyond just a paycheck.
“Americans have always defined themselves by what they do and how they provide for their families. What the idea of a universal basic income misses is that a job is about more than a paycheck. It is about dignity and one’s place in their community,” he wrote. “What Americans want is a good job and a steady paycheck, not a government check or a consolation prize for missing out on the American dream.”
The former vice president also argued against UBI in a 2017 blog post .
‘The theory is that automation will result in so many lost jobs that the only plausible answer is some type of guaranteed government check with no strings attached. I believe there is a better way forward.’
—Former vice president Joe Biden
“The theory is that automation will result in so many lost jobs that the only plausible answer is some type of guaranteed government check with no strings attached,” Biden wrote. “I believe there is a better way forward. I believe we can — we must — build a future that puts work first.”
The ex-veep instead stressed the importance of training and retraining workers for “jobs of the future.” He advocated for offering two free years of community college, providing aid to communities bearing the brunt of such transformation, and ensuring that benefits and workplace protections remain in place.
“While I appreciate concerns from Silicon Valley executives about what their innovations may do to American incomes, I believe they’re selling American workers short,” Biden added. “The future will not change the enduring American values that got us here.”
Mike Bloomberg: The billionaire ex-New York City mayor came out against UBI in a Washington Post piece published in November , adding that “raising the incomes of low-paid workers will be a top priority for my administration.”
“We will do this by raising the federal minimum wage and by dramatically increasing the Earned Income Tax Credit, the most effective policy we have for attacking poverty in work,” Bloomberg said. “My approach will recognize the importance of well-paid employment – both for providing a good standard of living, and for the dignity, sense of purpose and social value that people should expect their jobs to provide.”
Elizabeth Warren: Warren, a Democratic senator from Massachusetts, signaled to the Washington Post that she was open to the idea of UBI.
“We absolutely must raise wages and strengthen the social safety net so that every American has basic financial security. Universal basic income and universal living wages are options to consider,” Warren told the paper . “To raise wages, I have pushed for a $15 minimum wage, stronger unions, and empowering American workers at big American corporations to elect no less than 40% of the company board members — giving workers a powerful voice in corporate decisions about wages and benefits.”
During an October presidential debate, Warren said that the “closest thing” to universal basic income was Social Security. “It’s one of the reasons that I’ve put forward a plan to extend the solvency of Social Security by decades and add $200 to the payment of every person who receives Social Security right now and every person who receives disability insurance right now,” Warren said . That extra $200 a month would lift nearly 5 million families out of poverty, she added.
After Vox’s Ezra Klein raised the idea of UBI during a June podcast interview, the senator replied that “there’s so much more that we should do before we get there”: “Start with the wealth tax. Come on,” Warren said. “Start with universal child care and education and investment in education from zero on through college, and let’s see what that starts to do.”
Start with universal child care and education and investment in education from zero on through college, and let’s see what that starts to do.’
“Do the student-loan debt forgiveness and that will start to close the black-and-white wealth gap. Use my housing plan and attack red-lining straight on,” she continued. “Help close the differences between the poorest in this country and the middle class. Give people more opportunities. Let’s get everybody on board and try that.”
Pete Buttigieg: The former South Bend, Ind., mayor told the Washington Post he supported “$2 trillion of public investments to raise incomes through an Earned Income Tax Cut expansion ... workforce training, and lifelong learning programs and to lower costs for health care, prescription drugs, college, child care, and housing,” as well as “empowering workers through increased bargaining power.”
In a March interview with “Pod Save America,” Buttigieg said he thought UBI was “worth taking seriously,” pointing to the Stockton pilot program.
‘A lot of evidence would suggest that by far the simplest and most effective and cost efficient way to [boost third-grade reading levels would be to] just give the family a little more cash.’
“I know there are many times where we’ve been sitting around the table working on some elaborate policy contraption to do something like boost third-grade reading levels — when a lot of evidence would suggest that by far the simplest and most effective and cost efficient way to do it is [to] just give the family a little more cash,” Buttigieg said. “Because it turns out not being poor is one of the best things that can help you make it to a third grade reading level, because of nutrition or stability or whatever it is.”
Buttigieg likes the idea of connecting such a policy with work, he said, but would also want to broaden the definition of “work” to include typically uncompensated roles like caregiving.
“I think with a richer and thicker understanding of what work is, some kind of relationship between a guaranteed income and work, and some kind of structure that makes it equitable … I don’t know that anybody can say now that they have a fully informed, considered opinion on this, but I think that it’s the right moment to have that conversation,” he said.
Amy Klobuchar: Klobuchar, a Minnesota senator, told the Washington Post she didn’t support a UBI policy.
Former candidates’ positions
Kamala Harris: The California senator, who exited the race in December, had proposed the LIFT the Middle Class Act to mitigate cost-of-living increases. While not exactly a universal basic income policy, the LIFT Act would give large refundable tax credits of up to $500 a month or $6,000 a year to families earning less than $100,000 annually. Single filers who earn below $50,000 annually could get up to $3,000 a year.
Cory Booker: Booker, a New Jersey senator who suspended his presidential bid in January, previously said that raising the minimum wage to $15 an hour would be more effective than a universal basic income. He also introduced a bill in 2018 to provide every American child with an “American Opportunity Account” — or so-called baby bonds — starting at birth. The accounts, which would be managed by the Treasury Department with a 3% annual return and accessible once a child turned 18, would be seeded with $1,000 and receive up to $2,000 extra every year depending on family income.
Former Democratic presidential nominee Hillary Clinton also floated a $5,000 baby-bond plan during her 2008 presidential bid. She even considered proposing a universal basic income policy during her 2016 campaign, she wrote in her post-election memoir — but ultimately dropped the idea after she was unable to work out the math, she told Vox’s Klein in 2017.
This story was updated Feb. 12, 2020.