Entrepreneur Andrew Yang ended his presidential campaign today, but the real surprise is how long it lasted. He outlasted more "serious" candidates like California senator Kamala Harris, New Jersey senator Cory Booker, and Washington governor Jay Inslee. He maintained enough support in both polls and donations to win a spot in every debate so far. And he picked up some impressive endorsements, most notably from Elon Musk.
That's pretty good for a young (by presidential standards) Asian American from Schenectady, New York, who campaigned on an idea he admitted sounds crazy to most people: Give every American over 18 $1,000 a month for life, no questions asked. But if universal basic income sounds nutty to you, consider that the idea has been advocated by some pretty smart people, including Thomas Paine, Martin Luther King, Stephen Hawking, and Richard Branson.
Why give everyone $1,000 a month? For one thing, Yang argued, it would stimulate the economy as people spend that money in their communities. It would give people who are currently struggling to find well-paid work the funds they need to either upgrade their skills or move to a location with greater opportunity. It would provide some financial security for the 60 percent of Americans who say they could not cover an unexpected expense of $1,000 from savings. Most important of all, Yang said, it would help the tens of millions of Americans who he believes will lose their jobs to automation over the next decade.
That may be where the wheels came off his argument for a lot of people. After all, artificial intelligence, robotics, and automation are already in widespread use among American businesses, and, so far, we are not seeing rampant unemployment as a result. In fact, the U.S. unemployment rate of 3.6 percent is close to a 50-year low. For many employers, the shortage of available workers is driving investment in automation, rather than the other way around. While it certainly seems possible that new technology will create unemployment someday, it's not happening now.
But there's a much better reason to consider creating universal basic income, even if the robots aren't coming for your job just yet: It works. A World Bank study found that, contrary to common fears, poor people who receive cash transfers don't spend that extra money on things like drugs and alcohol. Instead, they use it to create opportunity and move on to a better life. That helps all of us by reducing such things as homelessness and crime.
Several nations and towns, including Stockton, California, have experimented or are experimenting with some form of universal basic income, and the results have been surprisingly positive. In Cherokee, North Carolina, members of the Eastern Band of Cherokee tribe began receiving annual checks, a share of the profits from the casino on their tribal land. These started out as small payments but grew to about $12,000--the same annual total as in Yang's proposal. Children from poor families that began receiving these payments began to do better behaviorally, and the likelihood that they'd commit a petty crime dropped significantly.
How do we pay for it?
When it comes to Yang's proposal, a lot of tough questions remain. Yang said a 10 percent value-added tax would be enough to cover the cost, but many experts disagreed. Some supporters of the idea want the payments to replace public assistance, while others believe they should be offered in addition to it. Yang supported giving people the choice between public assistance and universal basic income, which would make it a less effective tool for lifting people out of poverty.
If supporting universal basic income is still a stretch for most Americans, or at least most American politicians, there's another proposal out there that could be easier to swallow. Facebook co-founder Chris Hughes has proposed tweaking the Earned Income Tax Credit to take into account unpaid labor such as child care or elder care and giving $500 a month to families living on $50,000 a year or less. This would help the people who need it most and it would be easier to pay for than Yang's proposal as well. Hughes proposes to pay for increased Earned Income Tax Credit costs by increasing taxes on those who earn more than $250,000 per year.
Of course, Hughes isn't running for office, and so far no other candidate has championed either his plan or Yang's. With Yang out of the race, the idea may soon be forgotten as people focus on some of the more contentious issues in this election cycle. But that would be a shame. Universal basic income may or may not be politically viable, but it is an idea worth exploring.
As for Yang, he may not be done with politics yet. When reporters asked if he'd consider running for mayor of New York, he answered, "I wouldn't rule anything out."