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Jobs guarantee, basic income could solve inequality



California universal basic income Michael Tubs mayor experiment
Tubbs, the mayor of Stockton, California, which is experimenting
with basic income.


  • Most Americans are making less money than they did last
    year. Economic insecurity is rising.
  • Policy decisions could help bolster economic security
    as robots and automation are added into the mix.
  • Basic income and a jobs guarantee are two possible

Even with record low unemployment and corporate profits
increasing, workers are not feeling the love. Nearly three
quarters of American workers are making less
money this year than last, inflation
adjusted median 
incomes have
declined over the last 50 years, and housing prices have
skyrocketed. Toss robots and automation into the mix, and it
creates a recipe for economic insecurity that raises fundamental
questions about the long-term sustainability of pay.

Technology will continue to grow unabated, so rather than
seeking to dull innovation and reduce long-term growth, new
approaches may be necessary. If income, not work, is the problem,
policy decisions must react to those realities.

As Siemens CEO Joe Kaeser recently said,
“The social and economic impact of digitalization is going to be
massive. The least efficient part of the value chain, the middle
man, will be cut out. Unfortunately the least efficient part of
the value chain is human beings so someone has to do something
about the fall out.”

A variety of ideas have been floated to support incomes
right now.


One idea seems deceptively simple: What if the government
just gave you a job? It’s a concept commonly known as
, and this bold policy move would reshape monetary
policy and make unemployment effectively zero. The basic premise
is that the government promises everyone a job if they cannot
find one in the private sector.

This policy would drastically impact wages — assuming the
federal government requires a living wage and adds in real
benefits. All of a sudden, the national minimum wage of $7.25 an
hour could become a thing of the past. Beyond just impacting
wages, a jobs guarantee might also act as an “automatic
stabilizer,” helping to smooth lows from economic downturns and
curb inflation during growth periods.

The idea of a jobs guarantee stretches back to the FDR
Administration’s so-called “make-work” programs of the 1930’s.
The government used its market-making powers to create a floor
for workers — a true safety net.

Today, a swath of potential 2020 Democratic presidential
contenders are coalescing around this concept. Senators Cory
Booker and Kirsten Gillibrand might be the most prominent of the
group, but after the surprising Democratic primary win of
congressional candidate Alexandria Ocasio-Cortez in the Bronx —

who supports a jobs guarantee
— it has continued to gain
traction on the left.


We could also simply give everyone a check. A Universal
Basic Income
 (UBI) would provide each person, working or
not, with a minimum payment, for life. It would insulate
displaced workers from poverty and could quell the potential for
unrest during a profound and painful economic transition. It
could even spur innovation and encourage entrepreneurial risks.
The definition of “work” would be transformed by attaching
compensation to whatever people choose to do with their time,
including absolutely nothing.


UBI has a pedigree that stretches back to the enlightenment
— in Thomas More’s 16th Century Utopia — and
runs through twentieth-century adherents as varied as Martin
Luther King and Richard Nixon. In recent years, UBI has taken on
a more tech-focused sheen, with prominent figures like Mark
Zuckerberg and
Elon Musk saying
that we might need one as a solvent to the
tech-based future they are creating. By this logic, when the
robots take over, at least they’ll send us a


While there are no national-level UBI programs currently in
operation, experiments have bubbled up in the United States and
across the globe. Whether it’s Sam
 of Y-Combinator experimenting on the
private-sector side in Oakland, California, or Mayor
Michael Tubbs
 leading the charge on a pilot project from
his government perch in Stockton, California, UBI is certainly
having a moment.

In Oakland, Altman is giving
$1,000 monthly checks
to families, and is now expanding this
effort to other cities. The UBI pilot in Stockton, funded
by the Economic Security
, will provide $500 per month to a select group of
families. Neither scheme will make people rich, but it might just
help someone make the rent.

Though they have captured the headlines, these ideas
shouldn’t give short shrift to more traditional policy solutions,
including raising the minimum wage to $15 an hour and expanding
the Earned Income Tax Credit. Several cities have already passed
laws to raise the minimum wage to $15 an hour, and many more
cities would raise wages if states didn’t
stand in their way of passing wage laws.

Meanwhile, Representative Ro
 and others have introduced legislation in
Congress — with little chance of passing in the current climate —
that would drastically expand the earned income tax credit. The
credit makes sure that work pays by providing dollars directly
back to people that work and make too little. The current maximum
credit is set around $6,000, so doubling it would supplement a
family’s income by approximately $1,000 a


This wide range of ideas all seek to support incomes in
some form or fashion tied to or independent of work. The most
likely outcome will be an eventual mix of these solutions (and
others) pursued by policy makers. 

In order to make this happen, funding is needed. Direct
taxation or a repeal of existing tax cuts could help cover these
programs, but more unique approaches are also gaining

What if rather than raising taxes broadly, a specific
sector paid into a fund and dividends were returned to the
American people? In the realm of so-called “social wealth funds,”

the Alaska Permanent Fund
— and its oil dividend— is viewed
as the American model.

 is one potential source of funding. In such a
system, supporters say, everyone would own and profit from their
data, not just corporations. In this moment, with data breaches
galore, Facebook mishandling data, and data-dependent companies
like Uber worth tens of billions of dollars, a collective commons
for data may just gain support. How it is implemented, which
companies pay into it, and how much they pay is clearly an
unresolved issue.

Another potential resource to tap is a carbon
. Under a cap-and-trade program, carbon is priced at
a much higher rate. The proceeds from those sales could be
credited back directly to people. They could also be used to help
fund UBI or a guaranteed work initiative. This type of plan would
serve a dual purpose, helping the planet while also supporting
incomes for people right now.

As artificial intelligence and robots become more
commonplace, and both work and pay are broadly transformed,
conversations around these potential solutions will only
intensify. People want security, and without good jobs, people
don’t feel like they have that.


The social safety net was always envisioned as a way of
providing people with the security and well-being to pursue the
lives they want. This has broken down. The jobs are there, but
the wages are not. Now, we need to explore new solutions.

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