Universal Basic Income: Extraordinary Times, Extraordinary Measures

By Angela Zhang

Columnist

The COVID-19 pandemic is forcing millions of Americans to stay home and practice social distancing. For those who can afford it, workers may take leaves from their jobs and lessen the risk of contracting and spreading the virus. Others are forced to work from home. Many have been furloughed or received pay cuts. Some are at an even worse place, forced out of their jobs entirely by the massive shutdowns needed to contain this unique disease.

As a result, many Americans who aren’t able to secure leave from their jobs face a cruel choice: avoid the virus by staying at home without income or risk their lives by going to work. For example, many Costco employees have recently complained that, while they are at the forefront of this crisis, they are not being protected. Even healthcare workers, who we expect (and need) to be prepared and supplied, are terrified, with one nurse claiming that no one in her unit has access to masks. Countless other workers cannot afford to leave their jobs, but still encounter hundreds, if not thousands, of people a day, at great risk to their health.

Many of them work in necessary fields. Some, though, do not.

For those people, a universal basic income (UBI) would be of great help, not only for the citizens, but for the entire economy. It also helps the many workers laid off or furloughed in the midst of this crisis. A UBI would provide a definite sum of money for permanent residents, regardless of their employment status—it would be a lifeline for those put in difficult situations by this crisis. On top of that, it would be a reward to those working in necessary fields, who were already struggling to make ends meet. Caring for the sick and running a vital store is enough stress as is, without having to worry about finances. In short, it helps everyone.

Now, the recent bill passed would provide most Americans with a one-time payment of $1,200. Sure, this will provide some relief, but it’s not enough for this moment. This pandemic could continue on for months. A one-time payment that does not support all Americans is not enough. We need a UBI. 

In normal times, we would attack UBI for its cost. In normal times, we would talk about motivating people to work instead. In times like these, however, both those arguments become irrelevant.

We do not want everyone working; we need non-essential workers to stop going to work. We need people to stay inside, to social distance from each other and to self-quarantine. 

There is a simple way to do this—put money in people’s hands. This is especially true for those whose jobs cannot be done from home (i.e. large venue staff, gig workers, Uber/Lyft drivers, cashiers) and thus no longer have a steady income to rely on. They can’t be going out and looking for new jobs. We need them home.

If people are losing their jobs, which they will, businesses (both big and small) start to regress. This leads to a decline in individual incomes, which leads to tighter spending and slower economies. These patterns can then snowball—as more people become fiscally troubled, they spend less, and, as a result, less money circulates in our economy. We cannot afford to risk an economy with no consumer spending. Even more, we cannot afford to risk an economy that can’t give its citizens their basic necessities. We need money to be available right now so we can reap the most benefits from it. 

The purpose of a UBI right now is to ensure that Americans will be financially supported through this crisis, that they can put food on the table for their families, that they can keep a roof over their heads, that they can still afford essentials. That they can stay home.

By establishing a UBI during this emergency situation, we can protect everyone’s income so each person has at least some sort of spending money. If we can maintain people’s spending habits, we can also protect some people’s jobs and we can mitigate the worst of the snowballing. 

Some, like Andrew Yang, have taken this opportunity to promote a universal basic income in general. But emergency situations are, by definition, abnormal. UBIs during normal times should be considered from an entirely different angle.

Now, I do not claim to be an economist, but I do see how UBIs in normal conditions could come at too great a cost. Here are a few things to keep in mind:

Firstly, it’s expensive to maintain on a permanent basis. Just $1,000 per American per month would cost about four trillion dollars, which according to Market Watch, is about the entire federal budget in 2018. We’d have to rely on increasing federal taxes or cutting into other social programs to support such a UBI. During normal times, there is not much of a reason to lift up the economy artificially like that to support such a costly UBI, particularly if we can’t sustain it.

Another argument against UBIs is it can discourage employees to work. Sure, a UBI alone is likely not enough to support a comfortable life, but it may be just enough to discourage hard work and career advancement. One historical example: the Roman government attempted to compensate the unemployed by providing a communal grain dole. This backfired as the unemployed eventually became overly reliant on and even demanded the grain. With time, Rome could no longer sustain the dole’s expense. Of course, a UBI during modern times may play out differently, but it’s worth keeping history in mind. 

UBIs don’t necessarily encourage job creation, either. The main reason why people advocate for UBI is because they fear automation, globalization, and technological developments may eliminate certain jobs and in turn increase the wealth gap. Does a UBI actually solve this issue, though? Handing out money might mitigate the wealth gap, but only good jobs with high wages can prevent it in the first place. Going back to the Rome comparison, many argued the government should have tried to put the unemployed back to work rather than attempting to quell them with grain handouts. I agree with that line of thinking, to an extent—we should really strive to adopt courses of action that will encourage additional job creation, raise incomes and provide opportunities to all. 

So, yes, there are differences between an emergency UBI and a regular UBI. But in this crisis, it seems to be just what we need. It’s much harder to predict what will happen with a regular UBI, and there are good arguments on both sides of the issue. For now, our best hope is to put aside the politics of a permanent UBI and establish one for the duration of this crisis—our workers, and our economy on the whole, demand it.