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The Basic Question

Should everyone receive a small, stable income from the government? The idea is going around again, and some think its time has come.

September 2021

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Composite illustration showing historical figures, events and themes relating to the concept of universal basic income

Michael Tubbs first heard about guaranteed income in a Stanford class on Martin Luther King Jr. “It was shocking because I grew up in the church, so I spent every MLK Day reenacting Dr. King’s sermons, quoting his words and doing MLK speech contests. I never heard anyone talk about this part of his legacy,” says Tubbs, ’12, MA ’12, a former mayor of Stockton, Calif., and currently the special adviser for economic mobility and opportunity for the governor of California. But as a sophomore reading King’s Where Do We Go from Here: Chaos or Community?, Tubbs acquainted himself with the argument that government efforts to fight poverty were too piecemeal and limited. “The programs of the past all have another common failing—they are indirect. Each seeks to solve poverty by first solving something else,” King wrote. “We must create full employment or we must create incomes.” 

Tubbs understands poverty. It shaped his childhood in south Stockton. His mother, Racole Dixon, was a teenager when he was born, and his father, Tubbs’s namesake, is serving a life sentence. Tubbs came to see poverty as the root of society’s ills. The solution, he thinks, lies in a guaranteed income—a supplemental government program ensuring that low-income people earn above a certain threshold. He believes the approach might in turn pave the way for a universal basic income (UBI)—a more expansive vision of income assistance that allots every citizen, regardless of other wages, a fixed amount (often pegged at $1,000 monthly in proposals for the United States). 

In 2019, Tubbs, then the 28-year-old mayor of Stockton, started a guaranteed income pilot to understand how the money would change lives. It’s part of a global trend that reflects increased interest in such programs: Stanford founded the Basic Income Lab in 2017 to create an academic home for research on the subject. Tech entrepreneur Andrew Yang ran his 2020 presidential campaign promising a UBI. The California legislature, in a bipartisan consensus, just allocated $35 million to guaranteed income pilots for young adults aging out of foster care and pregnant women needing support. In Stockton, the naysayers were vocal. “We heard everything from people asking about drugs and alcohol to saying people aren’t going to work,” Tubbs recalls. “But the problem was worse than any solution.”

Photo portrait of Michael Tubbs

‘A guaranteed income is the only way I see where people are able to buy the boots to pull themselves up by their bootstraps.’ 

Michael Tubbs

Tubbs has since founded Mayors for a Guaranteed Income, which includes 57 mayors—in cities as varied as Los Angeles, Flagstaff, Ariz., Jackson, Miss., and Cambridge, Mass.—and has 25 pilots underway. These and other pilots worldwide aim to answer the naysayers’ questions: Are recipients no longer working? Do they just watch TV? Or does something more nuanced happen when survival is no longer a daily struggle? Proponents think that a UBI will also address racial equity, the well-being of women, and the transition of young adults into independence. Some even see it as the antidote to automation—that juggernaut of computer innovation that, if tech’s Cassandras are to be believed, is coming for our jobs. Notable in our era of political partisanship, UBI has a history of not falling along party lines. Supporters claim this is the social revolution we’ve been waiting for. Detractors are skeptical. And then there’s the question of how to pay for it.

Everything Old Is . . . 

The idea of providing subsistence to people has cropped up repeatedly over the centuries. Ancient Rome gave hundreds of thousands of citizens a grain ration to ensure social stability. Much later, in 1795, magistrates in the English village of Speenhamland devised what would become known as the Speenhamland system, which spread across Great Britain during the early 19th century and promised every man and his dependents an allowance for bread. Its detractors were numerous: Karl Marx argued that it enabled employers to underpay workers; the political economist David Ricardo claimed it made people unproductive; and Thomas Malthus was predictably Malthusian, envisioning a catastrophe of rising birth rates and plummeting food supplies from overfeeding poor people. Though no such disaster occurred, the system was repealed in 1834. The industrial revolution reached full steam, and Britain’s poor were corralled into workhouses, in the merciless labor system that Charles Dickens immortalized in Oliver Twist.

Over the past half-millennium, visions of guaranteed income flowed from the pens of intellectual luminaries: Sir Thomas More, Thomas Paine, John Stuart Mill, Joseph Charlier, Bertrand Russell and, of course, Martin Luther King Jr. In 1960s America, the idea caught on when economist Milton Friedman proposed a negative income tax—a payment to fund necessities for low earners. Friedman, a conservative, had spent three decades developing the idea since discussing it with Swedish economist Gunnar Myrdal, a social democrat. “It’s very unusual to find a policy proposal that can draw together people from so many different ideological persuasions,” says Jennifer Burns, a Stanford associate professor of history who is currently writing an intellectual biography of Friedman. “Friedman’s formulation of this idea—that poor people are just poor, so let’s give them money and they’ll make good decisions—is very simple, very clean and, in the context of 1960s American social policy, very revolutionary.” At that time, poverty was pathologized, especially for marginalized racial and ethnic groups; poor people were seen as in need of supervision and training. Friedman, however, viewed the existing welfare system as paternalistically invading private lives to determine who got benefits. Eliminating the costly, sprawling welfare bureaucracy, he believed, would help fund a negative income tax. President Richard Nixon took up the idea, as did then-congressman George H.W. Bush. Nixon’s director of the Office of Economic Opportunity, Donald Rumsfeld, and Rumsfeld’s special assistant, Dick Cheney—then part of the Republican Party’s influential moderate wing—approved of the New Jersey Graduated Work Income Experiment, a Johnson-era program that supplied 1,357 male-headed households with a guaranteed income. Researchers studied whether the program would lead fathers to work less and found a negligible decrease. The effort to implement a national guaranteed income program, however, died in the Senate in 1972. “In American social policy, judgment and moral evaluation of poverty is very dominant,” Burns says. Republicans opposing guaranteed income joined forces with Democrats who viewed the proposal as too stingy and hoped George McGovern would soon defeat Nixon and implement his “demogrant” of $1,000 annually to every citizen. (McGovern lost in a landslide.)


Composite illustration showing historical figures, events and themes relating to the concept of universal basic income

 


In ensuing decades, politicians have demonized state benefits, conjuring images of sloth to rally voters, says Juliana Bidadanure, an assistant professor of philosophy and the faculty director of Stanford’s Basic Income Lab. “In the United States, this is centered on the welfare queen stereotype, and it’s very racialized and very gendered.” (The term, popularized by President Ronald Reagan, refers to women who allegedly collect excessive welfare payments through fraud.) “In Europe, there is a more robust safety net, but its minimum income program is also highly stigmatizing,” she says. Bidadanure witnessed this stigmatization growing up in a Parisian banlieue, a word that translates roughly to “suburb” but that has a racialized connotation much closer to “the projects.” Banlieues are densely urban areas that house many immigrants and provide substandard educational and employment opportunities. “Youth unemployment rates are extremely high. It’s not uncommon for them to peak at 40 percent, so it’s really bad in terms of social despair,” Bidadanure says. Over the years, she saw how people in her community struggled but often didn’t seek benefits for fear of appearing lazy. “They internalized that representation to the point of forgoing benefits they were eligible for,” she says.

Bidadanure’s attention didn’t turn to UBI until after the 2008 financial crisis. She was writing her master’s dissertation at the London School of Economics on age discrimination. In France, income support is largely unavailable to adults aged 18 to 25, and in 2009, as unemployment soared, then-president Nicolas Sarkozy raised barriers to benefits. Bidadanure’s research resulted in a chapter on UBI in her recent book, Justice Across Ages: Treating Young and Old as Equals, in which she addresses employment struggles of young adults in low-income settings. “Years later,” she writes, “they remain scarred by early phases of precarity: they remain more likely to be unemployed, their wages stagnate, and they can only aspire to further precarious jobs.” With UBI, she says, these youths would start out on a more equal footing with their better-off peers, who can pursue further educational opportunities or take unpaid internships to gain crucial work experience and who don’t face the same financial pressures to accept undesirable jobs.

Photo portrait of Jennifer Burns

‘In American social policy, judgment and moral evaluation of poverty is very dominant.’ 

Jennifer Burns

Bidadanure found UBI appealing because it wouldn’t stigmatize any one group. “Everyone would be a benefits recipient,” she says. And contrary to forecasts of UBI recipients not working, data from several pilots suggests they’d work the same amount, if not more. Someone receiving welfare benefits, which have income ceilings, might hesitate to take temporary or unstable work for fear that if the job doesn’t pan out, they will have to reapply for welfare, going weeks or months without assistance. “That creates a very strong disincentive to actually look for a job. This is one reason the Finnish government started experimenting with unconditional cash because people might be more willing to take risks, including looking for a job in a different neighborhood or doing career retraining,” Bidadanure says, referring to a Finnish UBI pilot run from 2017 to 2018 in which 2,000 unemployed people aged 25 to 58 received monthly payments of 560 euros. With UBI, Bidadanure says, people caught in unfulfilling jobs have more exit options.

After Bidadanure joined Stanford’s faculty in 2015, she discovered that prejudices against the welfare system run deep in the United States. Americans repeatedly told her there was no chance that a UBI would work here, but then, in 2016, UBI began to gain media attention in the United States. UC Berkeley professor and former labor secretary Robert Reich published Saving Capitalism: For the Many, Not the Few, which argued that a UBI might protect individuals in a capitalistic society, enabling capitalism to continue without having to go all the way to socialism. It and two other books that came out that same year—Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream by Andy Stern, former president of the Service Employees International Union, and Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford, a futurist and artificial intelligence expert—addressed automation as an impending threat to the American workforce. “They were looking at it from a very different perspective than the one I had been introduced to,” Bidadanure recalls.

In 2017, to bring the different viewpoints together, Bidadanure founded Stanford’s Basic Income Lab. Its mission: to understand ways UBI could reduce inequalities, ensuring more freedom of choice, more options in the face of difficult situations and more bargaining power at work. “UBI was really becoming a tech issue,” she says. “We wanted to show that it was also a gender issue, also a race issue, also a class issue.” The lab held the nation’s first workshop on how UBI could be implemented in cities, provided a tool kit to kick-start pilots, and compiled previous UBI research online in interactive maps and visualizations. The definition of UBI that the lab uses is “a cash grant given to all members of a community, without requirements, with no strings attached,” says Bidadanure. “There are quite a few features that make it different from existing safety nets: It’s individual, it’s in cash, it’s unconditional, it’s universal, and it’s regular.” Each aspect is important. For instance, welfare benefits aren’t individual but rather allocated according to household income. If one member of a household earns above a certain amount, others in the family aren’t eligible for benefits and can become trapped as dependents. In such situations, a UBI could offer exit options to dependents, usually women. “We know that financial insecurity is a predictor of not being able to leave an abusive relationship,” Bidadanure says. And for young adults—especially LGBTQ or former foster youths who are forced onto the street, where they often face predation—a UBI could provide a safety net. “There is a very dangerous pipeline from foster care to the streets,” she says—one that California aims to address with its recently passed legislation. UBI—because it is individual, regular and in cash—would allow people to respond to urgent needs as they arise and make decisions in favor of their own well-being. 

Not So Fast

But is a UBI, for all its potential benefits, the optimal solution? The argument in favor presumes that vulnerable populations will be better served by it than by improvements to the current benefits system, points out Mark Duggan, professor of economics and director of the Stanford Institute for Economic Policy Research. “Part of the reason that government programs and interventions are really complicated is they steer a lot of resources to the most vulnerable,” he says. “So, for example, if I am a disabled individual who has never earned a dollar in my life, who is completely unable to work, who needs a lot of medical care to survive, we have programs that are designed to help that individual. You move to a UBI program, and it almost inevitably means less support for the most disadvantaged. There is only so much money.”

Though Duggan doesn’t adamantly oppose an income floor (“The devil is in the details” is his occasional refrain), he sees UBI and guaranteed income as problematic and doubts people will be more likely to work under them. “The results from pilots don’t necessarily translate into the real world,” he says. In the pilots, “you’re monitoring people and helping them in all sorts of ways.” While he accepts that some people might retrain or hold out for a job that’s a better match, he says that evidence for this is limited, giving the example of changes to veterans benefits in the United States. Between 1950 and 2000, approximately 9 percent of vets received disability benefits; that percentage rose to 26 after a redefinition of disability to include diabetes and other conditions that Duggan doesn’t believe necessitate leaving the workforce. “It used to be that veterans were much more likely to work than other people with the same education and age and gender. Soon after the change [in benefits], that slipped, and veterans became significantly less likely to work,” he says. “I’m not saying this isn’t a great program, but it’s instructive to see just how much its growth has caused people who otherwise would be working to not work.” 

While Duggan doesn’t believe that everybody should work, he fears that many will lose the sense of contributing to society if they stop. “There’s a lot of literature on work—independent of its economic benefits—having benefits to mental health,” he says. Moreover, he says, a robust work force generates tax revenue that funds schools, national defense and many other aspects of society. Already, the United States government is spending much more than it receives in revenue, he notes.

Photo portrait of Mark Duggan

‘There will be some people better off for sure, but the most vulnerable would be worse off. And that group is so important to me.’

Mark Duggan

Duggan does, however, see a virtue in cash programs like UBI: simplicity. “If you look at a lot of what government does, it’s really, really complicated,” he says. “One thing that is attractive about UBI and guaranteed income is that it is money, which people are going to value at that amount.” He references an oft-cited criticism by economists of programs like Medicaid, saying that people receiving it would likely benefit more from a check for $40,000 than from health care services that cost the same amount, but this is not his view. “Many voters appreciate knowing that their taxes are going to necessities rather than to goods that may be less critical or even harmful, such as lottery tickets or cigarettes,” he says. And in the case of UBI, he believes that the government would likely cannibalize existing benefits to provide people with cash. “There will be some people better off for sure, but the most vulnerable would be worse off,” he says. “And that group is so important to me.” 

The Bottom Line 

“UBI is very, very expensive,” Bidadanure says, but she points out that it wouldn’t be as expensive as a simple back-of-the-envelope calculation might suggest. That calculation goes as follows: $12,000 times 255 million adult Americans equals $3.1 trillion per year (and more if it includes children, as some scholars, including Bidadanure, believe it should). At first glance, the cost looks daunting. The United States’ federal budget currently stands at $6.8 trillion ($3 trillion of which is deficit spending), or $10 trillion if state and local budgets are included. (All three added up to $7.6 trillion pre-COVID.) But a 2017 analysis of UBI by political theorist and economist Karl Widerquist pegs the actual number at $539 billion, one-sixth the original calculation. This would be the net cost, which takes into consideration that many UBI recipients would be receiving funds taken from them in taxes. Such a UBI, using 2017 figures, would drop the official poverty rate from 13.5 percent to zero percent, “eliminating poverty for 43.1 million people (including 14.5 million children),” Widerquist writes. The net cost of UBI would be feasible economically, Bidadanure believes. Funding could come from a variety of sources: a wealth tax, a robot tax, an income tax, a consumption tax and a carbon tax; others have even proposed a data tax. (With a robot tax, companies pay taxes on the income that would have been earned by the displaced human employee.) Further funding for UBI could also come in savings from a smaller benefits bureaucracy and from a healthier society. “The cost of abject poverty is enormous, in terms of crime rates, health care costs, trips to the ER,” Bidadanure says. “Poverty and homelessness cost a ton to the local and state and national community.” UBI might also reduce crime during periods of hardship and decrease recidivism by helping released prisoners reenter society, she points out. Underpinning the idea of Milton Friedman’s negative income tax was that the money would flow back into the economy. “UBI is not just a humanist project,” Bidadanure says. “As societies, we all benefit when individuals who currently don’t have the money to consume are able to consume.” This is also why Friedman believed in unrestricted cash—so that it doesn’t skew markets but rather allows people to influence markets as they choose.

Both the first wave of guaranteed income pilots in the 1960s and ’70s and the much larger one happening now support Bidadanure’s points. In a UBI pilot conducted in Manitoba between 1975 and 1978, only two groups worked less: mothers of young children and young men who quit jobs to return to high school. Participants also had lower rates of hospitalization, attributed to decreased stress and alcohol consumption. The 2009 results from a small pilot in Namibia showed that a village that received UBI had a major drop in crime compared with one that did not. In 2013, a pilot in Kenya found that participants kept working or even started businesses, suggesting that a rise in entrepreneurship and increased participation of low-income people in the marketplace could offset economic losses due to others opting out of the workforce. And the Stockton study, in which 125 residents received $500 monthly for a year, produced similar results. Sukhi Samra, ’17, who headed the study for Michael Tubbs and is now the director of Mayors for a Guaranteed Income, says that participants leveraged their guaranteed income to find better employment; they also had more stable incomes and reported less depression and physical pain than people in the control group. “They showed up as better partners, better parents, better employees and better community members,” she says. One was suddenly, finally, able to afford dentures. Another spent more time with his daughter and discovered how little he knew her.

In thinking about UBI, Bidadanure believes we should go beyond the numbers. “I’m a political philosopher, and it’s very important for me to take some distance from the data,” she says. For her, an important question is how UBI could affect freedom of choice and equality. “The inequality between, on the one hand, those who not only have access to higher wages but also to work that they like, and, on the other hand, those who earn very little and do hard work that they dislike is one that we ought to reduce,” she says. Given that work is so deeply connected with how many people find meaning, she believes that most will seek out better forms of work, even if that means leaving the paid labor market to look after aging parents or grandparents or to volunteer in the community—work important for society but often undervalued. “The ability to reject bad jobs, I think, is a good outcome, one that might be disruptive in innovative ways for societies but disruptive in the right way because just accepting the current status quo is very problematic to me,” she says. 

Public Appeal

For a UBI to remove the stigma of receiving benefits and win broad public support, Bidadanure says, payments should go to everyone, including the middle class and the wealthy. Since a UBI would be redistributive, well-off citizens would return their payments in the form of taxes. This slight inefficiency, she says, is “the cost of dignity” for those who find themselves in need. And for anyone falling on tough times, UBI would be there. “People seeing benefits in times of hardship would ensure buy-in across the political spectrum,” Bidadanure says. “A lot of Americans do not have enough money to survive a financial emergency.”

Photo portrait of Juliana Bidadanure

‘People don’t see pervasive poverty as a human disaster in the same way as a catastrophe that needs fixing urgently. I wish they saw poverty that way.’

Juliana Bidadanure

Evidence that UBI could win support among today’s conservatives lies in another way that it might be financed: a sovereign wealth fund, like the Alaska Permanent Fund, which was established in 1976. Often referred to as an example of a UBI, the fund has historically been supported by Democrats and Republicans alike; it’s also not redistributive, instead relying on a public good—in this case, oil and gas—whose proceeds go to residents in a yearly dividend. “The dividend is seen as coming from the community and going back to the community,” Jennifer Burns says. “What’s been really fatal to initiatives on the larger scale is the sense that some people are paying into the system and some people are taking out of the system.” For this reason, President Franklin Roosevelt was careful in designing Social Security in 1935, she says: “Everybody pays in and everybody benefits. Once it becomes a poor people’s program, it loses political capital.” Many states, however, are rich in natural resources that currently benefit private corporations. Thomas Paine, the 18th-century philosopher and political theorist whose pamphlets Common Sense and The American Crisis helped inspire the American Revolution, made the case that all members of the community should receive an unconditional cash grant that comes from our common ownership of the earth. “Taking a nation of 350 million people and convincing them they’re all part of one integrated whole and they’re all equally benefiting and equally paying into the system—that’s really hard to do,” Burns says. State and city programs, however, could pave the way for national acceptance.

Ultimately, more data is needed, Bidadanure points out. Future pilots will answer pressing questions about UBI, addressing racial equity—how people who have experienced discrimination, violence and intergenerational poverty can create better lives with an income floor—as well as the impact of UBI on women: whether it will lead to higher rates of divorce, lower rates of domestic abuse, or more social pressure for women to drop out of the labor force and raise children. Further data will show whether UBI will give employees more bargaining power or, conversely, whether employers will believe it justifies not paying a living wage. All these factors will determine how a UBI should be designed and what social programs should accompany it. Bidadanure says that while some preexisting benefits would likely be absorbed into a UBI to help fund it, others should absolutely remain in place. “Some people say that a UBI would have to be introduced in addition to all other existing benefits. Others think that some existing benefits would need to be replaced, especially those that are stigmatizing or inefficient,” she says. “I think we should pick the package of benefits that enables us to secure the most robust floor in a way that centers on dignity.” By contrast, Duggan believes that repairing the current benefits system would obviate the need for a UBI. “Perhaps my greatest frustration with economic policy,” he says, “is how little federal, state or local governments use the data they have to make their programs better.” He wants to see governments optimize the delivery of health care, education and housing benefits using the same data tools that have revolutionized the private sector. “We don’t do, as a country, literally anything systematic to figure out if the $10 trillion that we are spending is being as productive as it could be,” Duggan says. “I think it’s almost a cop-out going to a UBI or guaranteed income.” 

Underpinning discussions of UBI is the role of government in society—whether it should be involved at all except in times of crisis. The COVID-19 pandemic relief checks engaged both Democrats and Republicans in the discussion, says Burns. “A lot of today’s conservative Republicans were saying the types of things that Friedman was saying 30 or 40 years ago, which is, ‘We’ve got to be fast. Let’s just sidestep this bureaucracy, which gets overly focused on eligibility, and let’s get the money where it’s needed,’” she says. “That has created a bit of the same fluidity in the policy space that we saw back in the 1960s.”

Bidadanure agrees on the significance of the relief checks, calling them one of the largest UBI experiments in history. And if governments should be there to stabilize society in the wake of disasters, then where do we draw the line? “People don’t see pervasive poverty as a human disaster in the same way as a catastrophe that needs fixing urgently,” Bidadanure says. “I wish they saw poverty that way because this is exactly what it is. It’s a human disaster, a human tragedy.”

Eliminating poverty with an income floor, Tubbs believes, would be in keeping with American values. “Americans pride themselves on being a land of opportunity,” he says. “Poverty robs people of opportunity. A guaranteed income is the only way I see where people are able to buy the boots to pull themselves up by their bootstraps.” For the wider public to truly see the value of a guaranteed income, Tubbs says, people must leave behind harmful stereotypes of poor people. “The folks who raised me were poor people. I wouldn’t have accomplished what I’ve accomplished if it wasn’t for folks who are poor.” Rather than seeing low-income communities as a burden, he proposes that we see the human potential that could be contributing to the country if poor people were freed from the struggle to survive. “The people I went to school with at Stanford weren’t necessarily smarter than the people I grew up with in Stockton,” he says. “Talent and intellect are actually equally distributed. Resources and opportunities aren’t.” 


Deni Ellis Béchard was a senior writer at Stanford. Email him at stanford.magazine@stanford.edu.


Composite illustrations: Ryan Huddle

Main composite illustration photo credits, from top left: Fibonacci Blue; Shay Haas; birdphone; NWABR; Ari Helminen; Billy Abbott; Howard R. Hollem/Library of Congress; NIAID; The.Comedian; Andreas Photography; Quinn Norton; Chris Potter; Matthew Colvin de Valle; dgphilli; Mike Licht/NotionsCapital.com; Carol M. Highsmith/Library of Congress; Laury Shark; Financial Times; Pamela Drew

Second composite illustration photo credits, clockwise from upper outside right, spiraling to the center: R.T. Sperry/Library of Congress; Dan Aasland; The Henry Ford; Mike Licht/NotionsCapital.com; Library of Congress; Arthur S. Siegel/Library of Congress; Museo del Prado; Han Holbein/The Frick Collection; Thomas Bewick; Gage Skidmore; Mechanical Curator; Dick Demarsico/Library of Congress; Kathryn Denman; Brian Patrick; Lorie Shaull; The Friedman Foundation for Educational Choice; Rob Bulmahn; Hey Paul; GoToVan; Scott J. Ferrell/Library of Congress; Library of Congress; Laurent Dabos/National Portrait Gallery; Department of Defense; J. Gurney & Son/Library of Congress; Biblioteca Rector Machado y Nuñez; Donated by Jean Perry/Manchester Archives; Colony of Gamers; David Hume Kennerly; Harris & Ewing/Library of Congress; Amelia Speed; Francisca Ulloa; Elvert Barnes; Ervins Strauhmanis; Larry Jacobsen; 3lian.com

Portrait photo credits: Michael Tubbs, ’12, MA ’12 (Courtesy Michael Tubbs); Jennifer Burns (Courtesy Jennifer Burns); Mark Duggan (Ryan Zhang); Juliana Bidadanure (Rita Scaglia)

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