Interrogation

Universal Basic Income Is Not a Magic Bullet

The author of Give People Money on the pitfalls and promises of retooling the U.S. safety net.

Person sifts through cash.
Thinkstock.

On this week’s episode of my podcast, I Have to Ask, I spoke to Annie Lowrey, a contributing editor at the Atlantic and the author of the new book Give People Money: How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World. It’s about universal basic income—the idea that the government would give all its citizens checks every month. Versions of this proposal have caught on with people on the left as well as tech leaders in Silicon Valley and even some hardcore libertarians. Lowrey has written for many years now about economics, but Give People Money is both a reported work—she travels to Kenya, South Korea, and India to view their economic experiments—and a policy brief on what she believes can help alleviate some of the social and political discontent that has arisen from economic change and dislocation.

Below is an edited excerpt from the show. In it, we discuss the benefits and drawbacks of UBI, whether or not we should be skeptical that so many Silicon Valley titans have embraced the idea, and how to make the safety net less vulnerable to political attacks.

You can find links to every episode here; the entire audio interview is below.

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Isaac Chotiner: You write in the book that UBI is an “ethos.” What do you mean by that?

Annie Lowrey: The idea of giving everybody money contains within it a number of principles. One is simplicity. The government is not going to ask you to do something in return for receiving the money. You won’t have to meet certain conditions in order to get it, which is different than a lot of the policies that we have. You cannot, for instance, get a welfare payment unless you meet a number of requirements, including work requirements. Oftentimes, there are also things like having to seek child support from your kid’s dad.

There’s this principle of universality. Most of our safety-net programs are means-tested. We say, “We’re only going to give it to people who meet these kinds of conditions, these pockets of people.”

There’s this idea that the government should—and we as a society kind of as an extension—put a floor under people in a very direct way and say, “Regardless of circumstance, we’re going to be doing something to make sure that you’re never going to sink down that far.” That’s not something that the United States does.

It’s a fairly radical idea, at least for the United States in 2018. What is it about where we are as a society that makes you think we need to start thinking about this now?

It’s really important to note that Republicans are tacking in the opposite direction. The Trump administration is letting states attach work and volunteering requirements to Medicaid. They’re going to attach them to Section 8 and other federal housing programs. If you talk to a Republican, they’d say that the point is to get everybody working where possible if you’re nondisabled, but functionally, what you’re doing is making it smaller and more complicated.

This is, in some sense, not where the country is headed right now, but that said, we do have this broad conversation that’s been ongoing for a decade about inequality, about the inability of even middle-class families to keep their heads above water. There’s a tremendous amount of fear about technological unemployment and about the next recession, and I think that it all comes down to this kind of fundamental sense of why, in the richest civilization the planet has ever known, is there still sort of such deprivation and need?

The other things that you bring up is, one, that it would give workers more bargaining power, and two, that the sort of robot, A.I. infestation—if that’s the word I want—is coming, and we need to be ready for it. Can you talk about those two other things and whether you think they’re good reasons for UBI?

Say that all of us were getting $500 a month from the government. In some sense, that might make you less likely to work, because you have that money, but it would also make you more likely to demand more from your employer, because it’s kind of like a strike fund. You’re not going to so readily accept a poverty wage if you have that $500, so the idea is that employers would have to make work better, give workers more money, and the equilibrium would reset, with more power going to workers.

This seems especially important given that the Janus case just came out of the Supreme Court. Unions are just in tatters. Private sector unions are functionally nonexistent in huge parts of the economy. Public sector unions are now getting gutted. So how do you restore power to workers? This is one way to do it.

Then for the technological unemployment, that robots-taking-everybody’s-jobs argument, I actually find it hugely compelling. It’s just that we don’t really see any evidence that robots are actually taking everybody’s jobs. Unemployment is pretty low. The really big issue is wages. That’s not to say that that won’t be a problem at some point. I certainly think like 50 years from now, that could be a really big issue. It’s just that folks in Silicon Valley, they sort of make it seem like this is a really big problem right now, that all these Isaacs and Annies across the economy are getting replaced by a robot. It’s just not true. I’m interested by that, but I find it so bizarre that for such a long time, the monopoly on the conversation was coming from people who are like, “You should be terrified, because a robot’s taking your job.”

Our opinion of Silicon Valley, and some of the people who are big names in Silicon Valley who are behind this, has changed and darkened in the past couple years, probably since you started writing. What did you make of the push in Silicon Valley for this idea, and what do you make of it today?

Absolutely. What I would say is that there was a moment in time where Silicon Valley was legitimately freaking out over their belief that they were creating technologies that would obviate the need for most human work. When you talk to folks now, they especially point to A.I., and I think that there’s almost this funny, numinous quality to their arguments about it. I can’t tell you how many of these folks I’ve asked, and they’re just like, “When I look at A.I., I see this amazing and awesome but also terrifying thing, like we’re going to put all of the truck drivers out of work, because every car is going to be a self-driving car.” Or like, “Watson is better than doctors, and soon we’ll have microrobots.”

There’s this sense of guilt of like, “Wow, we’re going to put these amazing technologies out there, but they’re also going to make people’s lives miserable.” I do think that the push for UBI comes out of a sense of guilt as well as a sense of joy. There’s this world in which everybody has less work to do, and it’s really great. We spend more time in leisure. We spend more time with our kids. But that’s not going to happen if people can’t afford basics, and there’s already millions of families that can’t do that. Where I think that the disconnect comes, why I find the UBI conversation out of Silicon Valley a little bit weird, is that we would be able to see that happening if it were happening, right? It’s not hard to see on a national scale how robots would eliminate work, but it’s just impossible to see it in the numbers.

I think that that has to do with the ways that technology is changing work. It might be depressing wages instead of eliminating work, and I also just think that a lot of the economy is health care work. It’s education work. It’s elder care work. It’s stuff that’s not actually easy to get a robot to do.

Hosting podcasts.

Yeah.

Also the people in Silicon Valley who’ve been high on this idea, or many of them, don’t seem as interested in ameliorating some of those things you talked about, which makes me somewhat skeptical that they’re so focused on this.

Absolutely. I live in D.C. I can get my groceries delivered. I can get dinner delivered by a little robot. But the truth is that those are not changing the nuts and bolts of the economy, and that very often those kind of services, like the gig economy, function in a few cities. I was just in Des Moines, and there’s no Instacart in Des Moines, and Des Moines is a big city. I think that there’s a certain myopia where they do just a little bit and forget that the whole of the economy outside of the Bay, D.C., Boston, New York, a couple other cities, it’s huge. When you look at the innovation that really is kind of changing the economy in amazing ways, a lot of it remains industrial innovation coming from big ag and big engineering companies. We forget that.

One of the things you talk about in the book is that this is something that appeals in various forms to everyone, from young socialists to Charles Murray, the right-wing libertarian figure and author of The Bell Curve. One of the fears of people on the left is that UBI would be used by people like Murray and his ideological allies to gut the safety net and replace it with UBI, so what would seem like this really generous basic income that was given to everyone, if you added up all the benefits that were actually being taken away, it would actually be a negative. Is that a political concern of yours?

Absolutely. There’s this question of how you’re doing benefits, and then there’s this question of how much. In a lot of ways, how much is 99 percent of the game there. Charles Murray’s proposal, which I think he first put out—it’s been quite a while—is that you would give everybody $13,000, $3,000 of which would have to go to health care, so if you’re an adult, you get $833 a month. If you look at the sum of benefits that would be going to a lower-income family through the earned income tax credit, child tax credit, all sorts of other programs, whether it’s SNAP, Medicaid, CHIP, [it’s] way more money than that. Say you’re a single mom with a couple kids—you’d be worse off. You can run the numbers, and you very much could implement UBI and have it increase poverty. That’s why I really dislike the idea that UBI is bipartisan.

The important thing is if you’re spreading the butter really thin, you’re going to need more butter, or you’re going to need to make sure that this is not a policy in isolation and that instead you’re adding it to a safety net that’s helping people in other ways. One idea that I really do like and actually does have some bipartisan support that’s growing is the idea of doing basically a UBI for children. The U.S. has a really high child-poverty rate. Your average kid is way more likely to be impoverished than your average adult. It’s a disaster from a public policy perspective, because that sets kids on less healthy lifestyles, less good earnings trajectories, so you can imagine doing a universal child benefit, and that would be a policy that would be way cheaper than a big UBI but would be really helpful.

Part of the reason that a UBI appeals to some people is that right now there’s a tremendous stigma having to do with race, having to do with all kinds of things, that is attached to a lot of our anti-poverty programs. The hope would be that a UBI would take some of that stigma away, because it’s universal. Is that fair, the way I summarize that?

Yeah, absolutely.

It seems like the Catch-22 is that if the programs are kept there in addition to UBI, the stigma would remain in some way, and we’d get the political insanity around Medicaid or stuff that we have now. And if the programs were taken away, then you’d have a situation that wouldn’t be as generous for people. Finding the right balance between those things seems really hard to do.

It’s really, really tough, and I think that this is something that UBI’s boosters have not necessarily grappled with in a complete way. It gets talked about as being this magic bullet, and really it isn’t. It’s a tool. UBI is instructive as an object lesson and a way to think about other policies and other goals. I, despite writing a whole book about it, am not sure it’s actually the best policy or the thing that we should be pushing for as a country. Part of the issue in the United States, part of the reason that we have a lot of deprivation and poverty, is that we have a system that basically says, “If we classify you as a nondisabled adult without dependents, you are almost always, depending on the state that you’re in, denied benefits.”

The reason that we have such a fragmented safety net is because of our racial history, and I think that there’s a way in which the resistance to this would become really deep and really powerful if people felt like people were getting something for nothing and weren’t working because of it. I think it’s a hard fit with the United States’ ethos in our politics right now, but it’s an interesting way of thinking about that ethos and those politics.

Universal programs seem to have broader popular support than need-based programs, if you look at polling figures.

Absolutely.

I know things like the EITC and Medicaid are, broadly speaking, popular, but Social Security and Medicare are the most popular programs we have. At the same time, people can always convince themselves that, “I’m getting something, and someone else who is different than me in some way doesn’t deserve it, even though we’re getting the same thing, and everyone gets it.”

If you look at the politics of Obamacare, if you look at lower-middle-income folks who are getting benefits through the exchanges, those benefits are often expensive, and they’re complicated—you have to go to this online system, and there’s enrollment periods or whatever—those people are deeply resentful of the Medicaid expansion, often, because Medicaid, first of all, they think it’s better insurance, second, it’s simpler, and third, it’s more automatic. I think that those politics are really fascinating.

One other way I would note that policies tend to be more popular is when they’re hidden through the tax code. There’s no constituency that hates the earned income tax credit, certainly not in the same way that there’s just a lot of judgment and stigma around a program like TANF or even food stamps. One policy proposal that I think is actually a really good one is written in a paper by a guy named Luke Shaefer and his co-authors. The idea would be basically to run a UBI through the tax codes. You would probably take away some of the programs aimed at lower-income Americans, and using the tax code, you would bump them all, whether they had earned income or not, up to a given level. This would probably be more efficient, and it probably wouldn’t engender as much resistance. Policies that are hidden in the tax code, Americans just don’t think of as being government benefits, even though they are.

At one point you ask in the book, “Is our American sense of work compatible with UBI?” Because there’s an argument out there that Americans place more value on work as a society than in other European countries. How do you feel about that argument?

I think that this is a really important thing and a thing that UBI folks have to grapple with. Let’s imagine everybody gets replaced by robots. Let’s say that in that world, you take your person who’s making a nice, middle-class wage, $60,000 a year or something, and you’re like, “It’s OK. We have a $12,000 a year UBI.” That’s a miserable, awful world, right? People are not going to be happy with that. Who’s going to be happy to lose a job and instead get a welfare payment that doesn’t really cover their past salary?

Americans really do like working. They find a lot of value in it. There’s this great study that looks at folks who are older, and when they stopped calling themselves unemployed and start calling themselves retired, they get markedly happier. They’re literally just happier as people. It’s not impossible to imagine a future in which there is a lot less work and people are happy. It’s just that you would need a really deep cultural shift and economic shift around it. There [are] definitely futurists, economists, and more radical thinkers who’ve started thinking about this—”Let’s make a world without work, and let’s enjoy that.” But it seems totally incompatible with how we feel about work and how it functions in our lives here in the United States right now.

What was the common thread that you saw when reporting in very different countries about the way the government can help out its citizens that you think are lessons that are universally applicable?

One really obvious one that comes out of this is that the government should, in many cases, just give people cash, as opposed to trying to do something else. If we had the U.S. government leave all of its programs in place, but instead of getting a food stamp that you could only use on a really specific thing, we just gave you the money, I think that it’s hard to argue that that wouldn’t be a better world. That money is more valuable to you if it’s fungible. I can’t tell you how many people I’ve talked to—and there’s so many studies about this—that people will take their food stamps, and they’ll sell them because they need to have cash to pay the electric bill to keep the lights on or they need gas to get to work.

The second thing is that I do think that there is something to be said for universal programs, for at least ensuring that everybody gets things somewhat more automatically, than having to go through an arduous application process. Whether that’s running things through the tax code, which I think is kind of a good idea, or whether it’s just making programs more universal, sort of like you see with Social Security, I think that there’s a lot to be said for it.

When every government program is declared unconstitutional, this will all be moot, but hopefully not until you sell some books. Is there a way, short of UBI, just in the short term, that you think Democrats—or liberals, or anybody who wants to expand or solidify the safety net—should be talking about this stuff?

I think the low-hanging fruit—the thing that would be most beneficial to the most at-risk people and might still be politically palatable on both sides of the aisle—is a universal child benefit, or even a broadly means-tested child cash benefit. Basically, you put it under the banner of, “No more kids in poverty here.” You have even some really conservative senators, so your Mike Lees, who really do take issue with child poverty and really want to do something about it, so I think that that’s possible.

It does just feel like the Overton window is a lot bigger now that Donald Trump was elected, that people are really ticked off. In the event that there’s another recession, I think that the space for policymaking will expand even more radically, so maybe it is a time for just big ideas.