By Kevin Tang
For every action, there is an equal and opposite reaction. Similarly, as America’s working class suffers from Trump’s policies and automation taking over jobs, many economists have started to look to universal basic income for hope.
Becoming more prominent after president Nixon advocated for it in his Family Assistance Plan during the 1960’s, the concept of universal basic income is not new and is appealingly simple; all citizens would receive a regular governmental stipend in addition to whatever they already make.
It stands to reason that this is gaining traction, especially for the lower and middle classes. Not only has the Trump administration rejected new overtime protections and lower mortgage insurance premiums, but also its proposed tax plan would reduce taxes by an average of 13.5% for the top 1% while increasing taxes for over 8 million middle-class families, reports Associated Press News. Since these proposals disproportionately hurt people with lower income, the poor believe that an unconditional nationwide income would help remediate these problems.
This income is also advantageous because instead of finding certain jobs to pay off their bills, people would have more room to explore new jobs that are more suitable to their abilities. This would boost productivity as well as innovation and flexibility.
However, universal basic income provides a solution because as shown around the world, it provides not only material economic benefits, but also intangible societal benefits that we often take for granted such as improved physical and mental health as well increased productivity. In the Canadian town of Dauphin, the idea was put to test. For four years, the town saw a decrease in “ill-health and mental stress.”
Similar findings were reported in North Carolina, Namibia, and India who all saw better nutrition and health when instituting a similar program. The most recent experiment in Finland shows us how it can and will work too. The first of a kind in Europe, the study observes 2,000 citizens who receive 560 euros (615 US dollars) over two years, starting in January 2017. And already, The Independent reported that there was a “notable reduction in stress levels.”
Although Trump blames outsourcing of jobs to countries like China as the source of unemployment in America, there is a less well-known but even greater issue – automation. As technology evolves to become a cheaper and more efficient alternative for a large variety of jobs, more low-skill workers are finding themselves with no jobs. Even though the United States has lost 5 million manufacturing jobs, manufacturing output has been increasing “roughly 2.2% a year” reports Ball State University. These millions of jobs were not outsourced because the same report indicates that 88% of them were lost due to automation.
Even more, management consulting company McKinsey and Company estimates that before 2040, 45% of jobs will be replaced by automation. This makes universal basic income “necessary” said Elon Musk, CEO of Tesla. “There is a pretty good chance we end up with a universal basic income, or something like that, due to automation.” With this regular payment, workers who have lost their jobs can be compensated.
For many, financial insecurity is a consistent problem. An unconditional basic income granted to every citizen regardless of his or her background would not only improve health, as studies prove it, but also financial stability. Although it seems impossible under the current presidency, universal basic income remains a glimmering hope for a growing number of people in America.