What is UBI?
In the next 12 years, 1 out of 3 American workers is at risk of losing their jobs to new technologies
—and unlike with previous waves of automation, this time new jobs will not appear quickly enough in large enough numbers to make up for it. To avoid an unprecedented crisis, we’re going to have to find a new solution, unlike anything we’ve done before. It all begins with Universal Basic Income for all American adults, no strings attached – a foundation on which a stable, prosperous, and just society can be built.
What is Universal Basic Income (UBI)?
Universal Basic Income (UBI) is a form of social security that guarantees a certain amount of money to every citizen within a given governed population, without having to pass a test or fulfill a work requirement. Every Universal Basic Income plan can be different in terms of amount or design.
Andrew Yang is running for President as Democrat in 2020 on the platform of Universal Basic Income. The UBI he is proposing for the United States is a set of guaranteed payments of $1,000 per month, or $12,000 per year, to all U.S. citizens over the age of 18. Yes, that means you and everyone you know would get another $1,000/month every month from the U.S. government, no questions asked.
Why does Andrew Yang want to implement Universal Basic Income (UBI) in America?
Andrew Yang wants Universal Basic Income because we are experiencing the greatest technological shift the world has ever seen. By 2015, automation had already destroyed four million manufacturing jobs, and the smartest people in the world now predict that a third of all working Americans will lose their job to automation in the next 12 years. Our current policies are not equipped to handle this crisis. Even our most forward-thinking politicians are unprepared.
As technology improves, workers will be able to stop doing the most dangerous, repetitive, and boring jobs. This should excite us, but if Americans have no source of income—no ability to pay for groceries, buy homes, save for education, or start families with confidence—then the future could be very dark. Our labor participation rate now is only 62.7% – lower than it has been in decades, with 1 out of 5 working-age men currently out of the workforce. This will get much worse as self-driving cars and other technologies come online.
Andrew’s version of UBI—funded by a simple Value Added Tax—would guarantee that all Americans benefit from automation, not just big companies. UBI would provide money to cover the basics for Americans while enabling us to look for a better job, start our own business, go back to school, take care of our loved ones or work towards our next opportunity.
For more about why Andrew Yang believes so strongly in Universal Basic Income, read his book ‘The War on Normal People’
published by Hachette on April 3rd.
Who would get UBI in Andrew Yang’s plan?
Every U.S. citizen over the age of 18 would receive $1,000 a month, regardless of income or employment status, free and clear. No jumping through hoops. Yes, this means you and everyone you know would receive a check for $1,000 a month every month starting in January 2021.
What would you do with $1,000 a month on top of whatever you now make? Let’s find out.
How would we pay for Universal Basic Income?
It would be easier than you might think. Andrew proposes funding UBI by consolidating some welfare programs and implementing a Value-Added Tax (VAT) of 10%. Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally – most would prefer cash with no restriction.
A Value-Added Tax (VAT) is a tax on the production of goods or services a business produces. It is a fair tax and it makes it much harder for large corporations, who are experts at hiding profits and income, to avoid paying their fair share. A VAT is nothing new. 160 out of 193 countries in the world already have a Value-Added Tax or something similar, including all of Europe which has an average VAT of 20 percent.
The means to pay for a Universal Basic Income will come from 4 sources:
1. Current spending. We currently spend between $500 and $600 billion a year on welfare programs, food stamps, disability and the like. This reduces the cost of Universal Basic Income because people already receiving benefits would have a choice but would be ineligible to receive the full $1,000 in addition to current benefits.
2. A VAT. Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue. A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software.
3. New revenue. Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500 – 600 billion in new revenue from economic growth and activity.
4. We currently spend over one trillion dollars on health care, incarceration, homelessness services and the like. We would save $100 – 200 billion as people would take better care of themselves and avoid the emergency room, jail, and the street and would generally be more functional. Universal Basic Income would pay for itself by helping people avoid our institutions, which is when our costs shoot up. Some studies have shown that $1 to a poor parent will result in as much as $7 in cost-savings and economic growth.