Sunday, August 7, 2016

Guaranteed Basic Income

With more attention being paid to poverty, the suggestion that everyone should be entitled to a guaranteed basic income, has come to the fore again. Advocates imagine that this support for people with little or no income will be distributed in the form of a tax rebate. No grand new bureaucracy would have to be established.

There are actually two projects. One will make sure that every family has enough money for food, decent housing, education, and health care, for transportation and a reasonably agreeable life. The second one is focused on children. There are a large number of children in the United States living in severe poverty. 17% of our children live in poverty; 5% live in deep poverty--their families income is half of the poverty line, less than $10,000 a year. This project would give every family $2500 a year per child. That amount would lift these children out of poverty.

Both of these projects obviously run into the feeling of many people that since they had to work for their money, it would be grossly unfair for other people to receive a reasonable income without working. I will come back to that feeling below. For the moment we need to think about the fact that there are actually not enough jobs for everybody in the country. All politicians keep talking about creating jobs but have  no concrete proposals.

There are some obvious ways of creating jobs. If we reduce the normal work week from 40 hours to 35 hours a week, and employers will have to pay over time after a person has worked 35 hours, rather than paying more, employers would hire more persons and thus create new jobs.

If we decided to hand out money to people with children, according to current estimates, we would infuse 2 1/2 billion dollars into the economy. Families receiving that assistance, being poor, will spend that money and thus create jobs. An infusion of 2 1/2 billion dollars would make a significant difference to the economy.

While these are interesting considerations they will not persuade any opponent because what worries them is the unfairness of the whole thing. Why should I have to work and you have the whole day off and still have a decent income? What is more, why should I pay part of my hard-earned money in taxes to allow you to live comfortably without working? That seems grossly unfair.

If you replied that it seems grossly unfair that some people are superrich and some people live in abject poverty in this, the richest country in the world, opponents of guaranteed basic income would not be moved: “Let them get a job,” they would say or “Let them go to school and get job training.”

In order to get a sense of the underlying issue, let's make a thought experiment. Suppose everybody had a job they truly loved. There are very few days when they wish they could stay home. They think about their job at night before going to sleep because the job is full of challenges, it gives them a feeling of confidence, of competence. It somehow makes their life worth living. How much they earn in is not as important as growing as a person and as a person with special skills. For many people who have jobs that support them but barely and jobs that don't give them impressive social status, nevertheless work is fulfilling and the source of happiness. They are content.

Think about that world for a minute and then suppose that in this country there are not enough of these wonderful jobs and the population decided a long time ago that no one should have a job they hated because it was repetitive, because even stupid people find it boring and people of ordinary intelligence suffered doing it, day in, day out. So in this country there are people who have no work and they are supported by the public by receiving guaranteed basic income payments.

Now comes the big question: do you think that in that country where work is a source of happiness and fulfillment people will resent the unemployed who live off government payments? Would you not rather think that the people who had work they liked would feel sorry for the people who just had money and no work that made their life feel worth living?

Work today, for most people, is trying. They have done it for a while. There is nothing interesting about it. They are oppressed by authoritarian management. They have no say over what they do, or what they produce. They are treated as if they were mentally defective. They frankly hate their job. In that situation it makes perfect sense to not want others to get money without going through the same suffering. The opposition to guaranteed basic income tells us something deep about Work in America. It tells us that for many Americans work makes life miserable.

That is not something that political candidates are talking about, that the majority of Americans enjoy only their leisure time because the eight or more hours a day they are at work are indifferent at best, and most likely positively unpleasant.

The misery of going to work does not tell us that employers are sadists, but it does tell us something about the economic calculations which govern how one runs a business. The employer's obligation is to keep costs low and thus have as many as possible unskilled workers, people who can be trained in an hour or two to do their job. For the skilled jobs it is cheaper to buy a robot or to outsource the work to low wage countries.

The quality of work-life, the extent to which workers enjoy working, does not figure in the employer's calculations. The most serious consideration is that unskilled work is cheaper to buy in the labor market and therefore preferable.

It is the economic system, that is not interested in the worker's life and fulfillment but only in keeping the wage bill small, that is really inhumane and needs to be changed. As long as people work under that system, they will oppose guaranteed basic income projects.