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Universal Basic Income in America


Universal Basic Income            Gerry OShea

“Let us place a floor under the income of every family in America, and without those demeaning and soul-stifling affronts to human dignity that so blight the lives of welfare children.” You might think that this progressive political statement emanated from Alexandria Ocasio-Cortez in one of her commendable flights of oratory in Queens, but, surprisingly, the man who spoke those words was President Nixon, the leader of the Republican Party in the sixties and early 70’s.

 Income inequality in the United States has expanded greatly since the Nixon years. In 1980, the bottom half of earners in the United States took home a modest 20% of all income generated in the country; in 2014, thirty-four years later, that percentage had collapsed to a measly 12%. During the same time period the richest 1% in America went from earning 12% of all income to 20%.

Why has this dastardly situation been allowed to prevail in a country with a supposedly educated workforce? Pro-business legislation, including a number of major reductions in tax rates, played an important part, but the disastrous demise of the trade union movement from membership of 34.8% of all workers in 1954 to 20.1% in 1983 to just 10.5% today explains the demotion of worker power more than any other factor.

It remains a real conundrum why American workers no longer have a strong union movement to fight their corner. Unionized employees earn significantly more and have better benefits, yet many workers seem to prefer employers who do not allow for an organized voice advocating for decent salaries and working conditions. Peter Ward, Head of the Hotel Trades Council in New York, addressed this issue trenchantly in a recent speech: “To me the definition of stupid is a person who doesn’t act out of enlightened self-interest.”

Capitalism stimulates greed, and, in America, success is often gauged by the size of one’s bank account. Too often, the poor are viewed as failures and mostly demeaned and disregarded. They live in the poorest housing; their children go to the worst schools; and their low-cost diets often lead to obesity and diabetes.

 The federal minimum wage has fallen by a third in the last generation while worker productivity has increased almost threefold. Only 14% of private company workers in the United States have paid family leave, and one in four women have to return to work just ten days after giving birth.

 We depend on low-paid workers in these virus-ridden times to take care of packing the shelves in the grocery stores, for cleaning the hospitals and subways and doing many other jobs deemed menial by the wider population. They put their lives on the line to provide essential services for the rest of us. Their contribution is appreciated now, but will their dedication and bravery be remembered and remunerated properly when the good times return?

Most of these low-paid workers do not have any healthcare coverage. They can’t be refused treatment in an emergency room, so, not surprisingly, our hospitals have to deal with huge numbers - up to 43 per 100 from this deprived population – in intensive care units.

Apart from being much more humane, preventive care under a family doctor, would rule out almost all visits to an Emergency Care Unit (ICU), and it would indeed save money because crisis medical care is always prohibitively expensive.

Pope Francis warns us that “as long as the problems of the poor are not radically resolved, no solution will be found to any of the world’s problems.” Unfortunately, his admonition is disregarded by most Christians, and his words seem to resonate only with political and church leaders who are deemed left-wing radicals and far too disruptive of the status quo.

Michael J Harrington, greatly influenced by his volunteer work with the Catholic Worker movement, wrote “The Other America, Poverty in the United States” in the early 1960’s. He emerged as a major influence on the Kennedy and Johnson administrations. His salient advice at that time suggested that the poor needed a powerful writer like Charles Dickens to record and publicize “the smell and texture” of their lives. He argued that most people did not know about their plight or they accepted the unthinking popular judgement that the dire circumstances associated with poverty were somehow all their own fault.

A Dickens in our time would highlight how men and women in the richest country in the world are forced to live lives of quiet desperation with government help provided grudgingly for food or housing. Many work in jobs without benefits that pay minimum wages, completely inadequate for the basic necessities of food and shelter.

 One approach to dealing with the widespread poverty in the United States was promoted by the now-retired Democratic presidential candidate, Andrew Yang, as the central platform of his economic policy. He proposed that the government should provide a universal basic income, widely known by the acronym UBI, to every citizen over 18, irrespective of income or work record.

He called this a Freedom Dividend, and he argued that it would significantly lessen the poverty rate. The recent once-off disbursements from the treasury of $1200 to help taxpayers get over the present COVID19 crisis provides an example of how UBI could work. Of course, Yang’s Freedom Dividend would pay out every month in perpetuity and there would be no exclusion based on income.

The main objection raised to such a universal program centers on the rich benefiting as much as the poor. Sending someone earning, for instance, $20,000 a month a $1000 check from the national treasury seems like a serious misuse of funds.

Mr. Yang and his supporters argue that the monthly check from the IRS would be deemed income and thus subject to tax, so some of the money would be recovered. Also, the problem with means-testing government programs inevitably leave the workers outside the cut-off point for benefits feeling dissatisfied and hard-done by.

Conservatives tend to favor UBI with one proviso: all other welfare subsidies including for food and housing would be ended. They seem to be congenitally opposed to welfare payments of any kind and would only support UBI if it ended the welfare state in one fell swoop.

Andrew Yang would certainly not agree. The philosophy behind his proposal stresses that it would move millions of people out of poverty. Its proponents don’t claim that it will do more than alleviate some of the near-destitution that pervades the lives of many marginalized citizens. It would not be a disincentive to work; it would help to provide a safety net but not a comfortable lifestyle.

Unwaged and underpaid work by carers in a family would be helped by a direct cash payment, providing some relief especially for women in low-paid service jobs. And some people don’t have a job because of physical or emotional disabilities and they certainly should be UBI recipients. The great 17th century English poet, John Milton, who was blind, reminded us in a memorable line in the sonnet he wrote about his affliction that “They also serve who only stand and wait.”

Other commentators urge a much higher monthly payment than $1000 to really have an impact on the lives of poor people. The inevitable question about how it will be paid for was answered by Candidate Yang who spelled out how increasing taxes on corporations and millionaires would cover his universal $1000 checks.

 Progressive voices often remind us that the same question about affordability was asked by Republican leaders who opposed the introduction of Social Security by FDR. Dealing seriously with the growing devastation of poverty in America requires a bold and sustainable program by a visionary leader like President Roosevelt.

A recent study examining the perennial question about the correlation between money and happiness came to a clear conclusion. People earning more than $75,000 a year can expect a high level of financial contentment. They are very unlikely to wake up at night wondering how to pay a Con Ed bill. Unfortunately, over 80% of Americans earn less than the happiness benchmark.

However, those who are earning under that figure, especially those taking home $400 to $500 a week, are engaged in a daily battle to pay for accommodation and food with clear consequences for their enjoyment of life. UBI would bring them a real measure of relief.

The corona virus scourge has changed many people’s perspectives on life. We experience every day the dance of death where funeral homes can’t deal with all the corpses, leaving us all shook-up and demoralized. Community heroes today are unlikely to be billionaires cocooned in their expensive homes but rather healthcare and supermarket workers, mostly poor, who take care of people’s needs.

 What political leader will object to the next proposal to increase the minimum wage to at least $15 an hour or to extend medical care to all citizens?

Gerry OShea blogs at  wemustbetalking.com

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