Could a Universal Basic Income Help S.F. Fight Displacement?

Momentum builds for a guaranteed $12,000 a year, for every adult citizen. But why do tech billionaires love it so much?

For 2018, the Pulitzer Committee raised the prize money from $10,000 to $15,000, an amount that is just as taxable as anything the winning journalist or historian earns on their W-2. Bestowed by Columbia University, the award’s current sum also equals almost exactly one-quarter of that college’s $59,444 tuition for the 2018-19 school year. Kendrick Lamar, the first non-jazz or non-classical musician ever to win a Pulitzer, already has an estimated $18 million, so DAMN.’s winning the most prestigious prize in American letters represents a cash infusion equal to less than 0.1 percent of Lamar’s net worth.

It’s hardly the million dollars attached to the MacArthur Fellowship, also known as the “genius grant.” (A Nobel Prize is currently worth about $1.4 million.) And yet that $15,000 honorarium is many times the $400 that tens of millions of Americans claim they would have a hard time scraping together in an emergency.

The level of chronic instability attached to living paycheck-to-paycheck is as hard to fathom for people who don’t experience it as it is hard to escape for people who do. Routinely running out of money for short periods causes people to skip medications, get gouged by payday lenders, and eat badly (if at all). The accumulated stress causes any number of adverse health effects and puts serious strains on marriages and families. And the belief that nothing will ever get better is arguably the heart of the opioid crisis and its associated diseases of despair.

Four hundred dollars is the price of Boardwalk, the most expensive Monopoly property, and about 96 hours of rent in the median San Francisco one-bedroom apartment. But that dollar amount is anything but a numerical constant. In a country where commentators consider cell phones a luxury and which demonizes people who don’t pay a federal income tax as leeches even though they pay far more regressive payroll and sales taxes, an honest reckoning is even harder.

It goes far beyond the effects of a bartender surreptitiously recording Mitt Romney bad-mouthing the so-called 47 percent. Honest discussions of the effects of 2017 Republican tax “reform” — really, an unsustainable giveaway to corporations and the affluent, with meager, set-to-expire-in-2025 benefits for workers — got bogged down immediately in what might be called discourse pollution.

Consider the reactions to the tax cut by current and former Speakers of the House. Rep. Nancy Pelosi got into trouble when she described sporadic $1,000 bonuses as “crumbs” compared to the titanic corporate reductions these companies got. For such an extraordinarily wealthy person, that was arguably an ill-considered choice of words, but the backlash obscured Pelosi’s accurate point that Corporate America pocketed billions while doling out a relative pittance.

On the other hand, Speaker Paul Ryan tweeted-and-deleted a claim that a Pennsylvania secretary was happy to find an extra $1.50 in her weekly paycheck, enough to cover a $60 annual Costco membership. If she’s really pennywise, she could also afford that never-gonna-change, $1.50 hot-dog-and-soda combo on exactly 12 Costco runs each year. 

Jeff Bezos, Bill Gates, and Warren Buffett collectively possess as much wealth as the bottom half of the U.S., enough for almost 200 billion hot dogs and Diet Cokes. It’s simply too much to process, and the dollar amounts obscure all manner of grotesqueries in the American political system. For instance, leaders of several prominent hedge funds later decided to withhold their expected $50 million support for GOP Congressional candidates after their taxes weren’t cut enough. That petulant response to perceived “crumbs” of a far higher order of magnitude than Pelosi’s $1,000 didn’t garner nearly as much outrage.

This is the degraded landscape we face. Average Americans are screwed, billionaires are pulling away at an accelerated clip, and a frank, informed discussion of what to do about it seems impossible. But there might be a first step, something roughly equivalent to giving every American the financial equivalent of a Pulitzer Prize every year: a universal basic income (UBI) of $12,000. It’s not enough to lift millions of people out of poverty, and it’s certainly not going to alter the status of workers versus venture capitalists and hedge-fund bosses, but it might be a vital start.

The federal tax code is so complicated that David Foster Wallace’s unfinished novel The Pale King implies that it took on a sort of transcendent sentience. As adjustments to such a massive entity go, UBI is not the most complicated. The San Francisco-based Universal Income Project’s stated aim is simple, to “give people enough money to meet their basic needs, providing everyone in the country with an income floor.” Chris Benner, professor of environmental studies and sociology at UC Santa Cruz and Director of the Everett Program for Technology and Social Change, says it’s about “ensuring that the very minimum basic needs are met — and by that, I mean minimum basic needs.”

UBI is a cushion, a transformation of the social safety net from a raggedy web of holes to an ergonomic mattress that you can drop a bowling ball on without knocking over the Pinot Noir. What UBI is not, however, is a substitute for a job — and unlike many traditional, means-tested benefits programs, there is no disincentive to work for fear of your benefits getting cut. The strongest base of support, Benner says, is as an antipoverty program and not specifically a method of sidestepping menial employment in favor of more meaningful work.

Rich or poor, you get the money, and many pilot programs around the world — Manitoba in the 1970s, various villages in rural India — show a negligible or nonexistent reduction in labor force participation. Instead, studies show that many participants in the Global South either used the funds to further their education or purchased items that were essentially investments in their future economic well-being, such as a motorcycle.

The Universal Income Project declines to specify a dollar amount or range for an American UBI, but frequently cited figures center on $12,000, either per household or maybe $12,000 for adults and $4,000 for children. Thich is convenient for two reasons: $1,000 per month is a nice, round number, and it’s very close to the federal poverty level for a single person in 2018 ($12,140). Even more coincidentally, the 2018 federal budget amounts came to a little over $4 trillion, or roughly $12,500 per person in the United States.

In 2017, the Roosevelt Institute, a liberal think tank, ran macroeconomic models that examined three scenarios: $1,000 per month, $500 per month, and a $250-per-month child allowance. Perhaps unsurprisingly, the $1,000 achieved positive results, growing the economy by 12.56 percent over the baseline over an eight-year period. Looking ahead, the authors note that “after eight years of enactment, the stimulative effects of the program dissipate and GDP growth returns to the baseline forecast, but the level of output remains permanently higher.”

Of course, this would cost money — or, to be specific, it would require the political will to convince Congress to approve a mammoth transfer of wealth. It’s highly unlikely that such a proposal would gain traction in Washington until January 2021, although Sen. Bernie Sanders has signalled mild support for the idea. Former Sen. Joe Biden is staunchly opposed, citing a (false) distinction with putting people to work instead. Doubtless other Democrats feel similarly.

Surprisingly, though, Hillary Clinton’s 2016 election postmortem What Happened claimed her team had run the numbers on UBI as a potential campaign plank. Citing Peter Barnes’ With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough and the Alaska Permanent Fund, which distributes petroleum revenues to everyone who’s lived in the state for a year, Clinton wrote that her campaign was unable to make everything add up (although that may have more to do with a political calculus than simple math).

Irrespective of their findings, there are two enduring, related misconceptions of UBI’s cost. The first is that it’s somewhere in the neighborhood of $3.9 trillion per year — derived by multiplying all 327 million Americans by $12,000 — plus significant administration costs, and that this total would nearly double the entire federal budget. Neither is true. First, a universal basic income, or a negative income tax — in the preferred parlance of libertarian-leaning economists like Milton Friedman — would effectively cost zero if it’s simply a redistribution scheme by which the government allocates tax dollars already paid. You’d be charging everyone $12,000 to get $12,000 back, in other words. The real cost of UBI is the sum of what it takes to get $12,000 into the hands of people who don’t earn enough to recoup the cost through taxation.

Still, that’s several hundred billion dollars. A 2-percent financial wealth tax could be one way to finance it. Benner’s Universal Technology Dividend Working Group takes the Alaska Permanent Fund as a potential model for a rethinking of technology as a public good.

“How do we conceptualize science, technology and data and all the consumer contributions to the economy as a collectively inherited resource, in many ways the same as you might conceptualize oil?” Benner says. “The wealth that’s created over hundreds of years of scientific development [is] part of the debate over UBI.”

But if you go to war with the army you have, you present earnest white papers full of bullet points to the legislators you’ve elected. Amazingly, the closest the U.S. came to implementing UBI was in 1969 under President Richard Nixon, but that was under a very different Republican Party (and a very different Democratic Party, too). It’s implausible in our current xenophobic climate that noncitizens would reap the benefits of UBI, something that would further entrap marginalized people in what used to be the land of opportunity.

It’s also easy to demagogue against anything that appears to benefit Bill Gates financially, even if it doesn’t. Further, Republicans like Paul Ryan make no secret of their desire to limit or roll back Medicare, Medicaid, and Social Security on the grounds that it’s unsustainable. It’s why they readily use the dysphemism “entitlements” to discuss their obligations under the social contract. Why make an old-age pension sound like something you’ve paid into all your working life, when they can associate it with undeserving moochers who feel “entitled” to it?

 

Other social programs suffer from even less neutral terminology. The Supplemental Nutritional Assistance Program (SNAP) has used debit cards since 2004, yet people routinely disparage “food stamps” and connect them in the public imagination with phantom “welfare queens.” Overcoming the ideas that poor people earn their fate, or that they’ll just blow any extra cash on beer and cigarettes, will be hard — and political pressure to abolish SNAP in the face of UBI will be enormous. Even popular programs that don’t carry the stigma of “welfare” aren’t immune. Alaska Gov. Bill Walker has raided the Permanent Fund the last three years to close a structural budget deficit, reducing an estimated $2,700 payment to the state’s 740,000 residents to $1,600.

Implementation and maintenance of UBI in the face of such headwinds won’t be easy. But the trickier part is human behavior, and not merely because people are complicated and act in more irrational ways than economic models might prefer. All studies of UBI pilot programs share a key shortcoming. They’re temporary, which has made a truly longitudinal study impossible — and why Benner expresses caution about reading too much into the results. Sure, you might go back to school if you knew you were getting $1,000 per month for two years, but how might you behave if the cutoff point was 10 years? What if it ran forever?

Maslow’s Hierarchy of Needs, that high-school debate class chestnut, poses a dilemma. What’s more important: fulfilling basic requirements like food and shelter, or achieving the noblest aspirations of the human spirit, like traveling the world or winning that Pulitzer? Having only your subsistence needs met could mean a lifetime of Dark Ages drudgery in a 15-mile radius of where you were born, but if you value self-actualization to the exclusion of all else, you might find yourself banging out a novel in a house with no roof.

UBI proponents seem to want the base of Maslow’s pyramid attended to first. There are good moral arguments to be made for this. Most importantly, a phenomenally wealthy society that fails to feed everyone is fundamentally unjust. Second, however romantic it is to be Keats and write beautiful odes only to die coughing up blood at age 25, most people would prefer ordinary lives and make it until 80 or 90 without succumbing to tuberculosis. Since we aren’t hunter-gatherers but inhabitants of a highly complex social order, we have plenty of evidence that securing the basics for all creates a sort of “upward spiral” of positive health outcomes, stable marriages, and less crime. Call it the Denmark-ification of America — with the additional, Scandinavian-sounding benefit that frequently unpaid forms of labor like childcare and eldercare would be recognized and compensated at last (however partially).

In lofty terms, covering the basics allows people to chart their own destinies, which answers the frequent critique that economic redistribution is somehow paternalistic or antithetical to freedom.

But more pragmatically, it’s simply very expensive to be poor. America nickels-and-dimes its least-fortunate with higher interest rates, hidden fees that multiply, parking violations that metastasize into expensive legal ordeals, income forfeited because there’s no babysitter, and minor colds that become severe because someone can’t afford to skip a shift. These are the everyday travails that conspire to keep people down, to say nothing of a decades-long, racialized War on Drugs that incarcerated hundreds of thousands of Americans and barred hundreds of thousands more from finding work or getting student loans. Much more systemic reforms are needed.

The time might be now. On Monday, journalist Barbara Ehrenreich tweeted, “Why are people poor? Because they are uneducated? No, because (1) they are paid so little for their work and (2) the pittance they are paid is quickly sucked off by landlords, credit companies, the medical industry and other predators. Solutions are obvious.” On Tuesday, San Francisco hunted one pernicious predator to extinction by eliminating a suite of charges accrued by people who move through the criminal justice system, the average of which is more than $13,000.

Could there be better proof for the case that UBI is necessary yet insufficient? Imagine spending your entire annual income on ankle bracelets and courthouse filing fees, even when you’d turned your life around in spite of it all.

Rather than being a one-to-one, Robin Hood-style wealth transfer from rich to poor, the Roosevelt Institute theorizes that UBI creates money in the end. This is because we live in a demand-driven consumer society. Lower-income people spend their money while rich people, their needs and idiosyncratic desires largely met already, park theirs in college funds and offshore banks accounts. Poor people’s tendency to spend whatever comes in often gets castigated as an inability to adhere to some Protestant ethos of thrift, but it’s usually because they’re out of eggs, toilet paper, or diapers. And when consumer spending comprises two-thirds of the $20 trillion U.S. economy, it is those expenditures — not affluent individuals deigning to expand their businesses in a spirit of magnanimity — that are the true “job creators.”

Portrayed thus, UBI sounds like a no-brainer. But all this leads to other sticking points, which begin to leave the realm of statistics and enter another domain: What is the nature of life under capitalism? Does the economy serve us or we it? The neoliberal model, under which human bodies come to resemble interchangeable widgets, might give its icy assent to UBI specifically because the program allows poor people to become more equal participants in our consumer paradise. It’s a variation on Keynesian pump-priming: The government spends money on poor people who then spend their money buying goods and services that, in turn, further enrich the rich, who continue to own everything just as they did before. Without other programs like Medicare-for-all or a $15 living wage — still too low, but first things first — the ultimate beneficiary of UBI might be Amazon, whose founder is already the richest man in the world.

Meanwhile, a tectonic shift in consumption patterns appears to be underway. In only the last few months, awareness around the pointless waste of single-use plastics indicates a growing recognition that eight billion human beings living like early 21st-century Northern Californians is simply impossible. The hideous inequities of the status quo are morally unacceptable, but the Earth’s carrying capacity remains finite. Is boundless, consumer-based economic growth therefore necessarily good?

Further, if you want to judge an idea on the basis of who supports it, UBI’s billionaire and Silicon Valley-affiliated backers might give you pause. In a commencement address at Harvard University, Mark Zuckerberg backed the idea, implying that Facebook might not exist if he hadn’t had time to code. (One wonders if Harvard grads imagine a lifetime of drudgery for themselves.) Richard Branson supports it, too. At the 2017 World Government Summit in Dubai, Elon Musk said UBI is inevitable because “there will be fewer and fewer jobs that a robot cannot do better.” Although he hastened to add that dislocation and the specter of mass unemployment through automation are “not things I wish will happen,” Musk still painted a sunny portrait of a future of abundance because robots will make things cheap. But he sure does loathe unions.

Viewed this way, UBI looks like a sop to a rapidly expanding and increasingly dispossessed proletariat. Pay us just enough to stay alive and buy sufficient trinkets that robo-capitalism — embodied by the hyper-efficient “dark factory” that doesn’t even need lights on because no humans work there — can permit the billionaire class to vault into the stratosphere forever. It’s less like the Singularity and more like something out of Kurt Vonnegut’s early novel Player Piano. The entire apparatus of capitalism chugs ahead, leaving humanity “free” in the sense that we may now waste our time doing little of use.

Writing for Jacobin, in “The Case Against a Basic IncomeDaniel Zamora notes the main reason UBI seems like “an idea whose time has come” is because it buttresses capital’s dominance over labor. “Support for basic incomes proliferates where neoliberal reforms have been the most devastating,” he writes. Certainly, the idea that an income floor lets people continue their education now in favor of a job later presupposes the idea of a “job” as a fulfilling career and not some horrible patchwork of low-wage, gig economy tasks — or even that there is work to be had at all.


Some of the benefits UBI proponents tout feel less like concrete improvements in the standard of living than boxes some moralistic agent of the nanny-state checked off. Yes, it’s nice that people might eat more fresh vegetables and go about their day feeling more “conscientious” and “agreeable” — but Radiohead’s “Fitter Happier” slyly saw through that to the underlying worthlessness and anomie more than 20 years ago. 

A view from 30,000 feet and the prioritizing of the unquantifiable also obviate concerns that are very specific to the Bay Area: rent and displacement. People everywhere have thoughts like, “Well, if I just had $5,000 right now, all my problems would be solved.” But hundreds of thousands of people in this region live in constant anxiety about getting evicted or otherwise losing their home. In a housing market that more closely resembles the contemporary art market than some function of supply-and-demand, UBI could help ease the crisis — even if the ultimate beneficiaries might be landlords.

Strangely, this particular angle appears not to have been studied in-depth, and much of the scholarly literature on UBIs pertains to rural areas where extreme poverty is endemic. This may be changing, though. Universal Income Project founder Jim Pugh notes that “while the economics only make [UBI] feasible at the national level,” it’s crucial to note that bringing people above the poverty level will require different levels of investment in different parts of the country.

“We need to look at state and municipal supplements on top of that,” he says. “We talk about steppingstone policies. We’re not going to be passing a nationally based universal basic income in the next couple years, so the question then becomes ‘Can we move toward this idea more regionally?’ ”

Like Benner, Pugh points to the Alaska Permanent Fund, which has lifted 15,000 to 25,000 people out of poverty in a remote, geographically enormous state with huge logistical challenges and a population smaller than San Francisco’s. Using California’s cap-and-trade system as the building block for a carbon fee of some kind might work, as long as the fund built up sufficiently to where the state isn’t in the morally shaky position of relying on CO2 emissions to feed and house its residents. And San Francisco has had a $250 supplement to the federal Earned Income Tax Credit (EITC) in place since 2005, to benefit working families.

“It’s only available once, but there’s no reason we couldn’t say, ‘Oh this can become an annual thing if you’re a low earner,’ ” Pugh says. “We can talk about raising the amount to $500 or $1,000, and then we could talk about having a system where people are able to take out a small loan in advance, so it pays out more regularly than just once a year.”

Progress is underway. Although he declines to specify who, Pugh says Bay Area legislators have inquired about similar programs. Last year, startup incubator Y Combinator began giving 100 Oakland families $1,000 or $2,000 per month, while San Francisco’s Office of Financial Empowerment announced it was teaming up with the Universal Income Project on a similar program. Tracking the participants’ housing trajectories could tell us a lot, although it seems obvious that any proposed UBI would need to go hand-in-hand with rent control legislation.

Fortunately, while California doesn’t have the opportunity to tackle poverty through a guaranteed-income ballot measure this November, we will take a stab at repealing an outdated rent-control ordinance. If the measure to overturn the Costa-Hawkins Act succeeds, municipalities statewide would be able to rewrite their own ordinances — something they’ve been forbidden to do since 1995. That would address only part of the antipoverty program we urgently need, but along with criminal-justice reforms and restored voting rights, it would be indicative of a sea change regarding the responsibilities of government. Whoever figures it all out deserves a Pulitzer.

 

View Comments