Author: Chris Hughes
Source: The New York Times
Date: May 1, 2020
The pandemic makes painfully clear that our economy must be reconfigured to be resilient in the face of disruption and change.
Mr. Hughes is a co-founder of the Economic Security Project.
Nancy Pelosi, the speaker of the House, on Monday said what many in her caucus have been saying for weeks: A guaranteed income to help Americans struggling because of the coronavirus pandemic is “worthy of attention.” As recently as just a few months ago, an income guarantee was widely written off as unrealistic. But two-thirds of the members of the House Democratic caucus now support the idea of some kind of cash payment that would continue until the end of the crisis.
The pandemic may have precipitated this change of heart, but the pandemic alone isn’t why we need a guaranteed income. The American economy is plagued by instability and fragility, much of it caused by staggering levels of inequality. If we want to create a more resilient economy and country, a guaranteed income should be permanent American policy, not just an emergency measure to help with this crisis.
Over the past several decades, legislators and policymakers of both political parties, obsessed with economic “efficiency,” lowered taxes and reduced regulation on the assumption that those policies would create a healthier economy and a better society. They spoke of a “free market,” with rules that were supposedly impartial and fair, even though political power has always shaped markets to reward some and harm others.
We have ended up with an economy that is not only unjust but also stunted in its growth and more fragile than before. The coronavirus crisis has heightened and made more vivid what was already clear to many: The unfairness of our economy is a matter of life and death for millions of Americans.
The United States needs a new economic framework designed for resiliency in the face of disruption and change. A guaranteed income — one that would provide $1,000 for every adult and $500 per child per month — should be its centerpiece.
Some advocates of a guaranteed income, often calling it a universal basic income, or U.B.I., argue that the policy is required to address the problem of large-scale unemployment caused by job-killing artificial intelligence. But the reason we need a guaranteed income isn’t technological progress; it’s the fundamental precariousness and injustice of today’s economy.
The coronavirus has reminded us how inequality can kill. Poorer Americans, who are more likely to work in jobs that expose them to the virus and less likely to have access to health care, have disproportionately fallen ill and died. And it’s not just the poor who are suffering. Middle-class workers have also been poorly set up to weather a storm of this magnitude. Policymakers’ failure to adequately regulate and provide affordable housing, health care and education has caused the cost of living to skyrocket while incomes have stagnated.
The pandemic has also exposed how many Americans teeter close to the brink financially. This is why government can’t be relegated to providing just a “safety net” for people who find themselves on the losing end of otherwise fair markets. The markets themselves are structured to provide short-term profits for some, rather than long-term resiliency for many.
Organizing markets around resiliency instead of profit means ensuring that workers are better protected from unpredictability. Workers should be able to share in the economic fortune created in the good times and to rely on a guaranteed income that gives them access to basic affordable goods in the bad times.
Direct cash payments are a highly effective way to provide financial stability to families. Cash moves quickly and reliably, which is particularly important in times of emergency. (Even with the problems the Treasury Department has experienced in distributing stimulus payments, 130 million American households have already received payments from the government, most over $1,000.)
The data on how people are spending their coronavirus stimulus checks demonstrate the flexibility that direct cash offers families. Some households use the money for basics — groceries, medicine, rent, child care — while others might use it to buy a laptop for a child now doing distance learning. Restricted benefits like food or rent vouchers, while critically important, can end up merely shifting cash from one budget line to another. Direct cash payments, by contrast, give each family the discretion to spend the money as its needs.
The Economic Security Project, an organization I co-founded about four years ago, has been working alongside groups like the Urban Institute and the Roosevelt Institute to map out exactly how a guaranteed income might work. But these days we’re hardly the only ones giving the matter thought. Dozens of Democratic politicians, led by Senators Kamala Harris, Sherrod Brown, Cory Booker and Michael Bennet, and Representatives Ro Khanna, Rashida Tlaib, Pramila Jayapal and Tim Ryan, are calling for the creation of an income floor — either temporarily for this crisis or permanently.
Proposals vary, but a consensus is emerging that every American adult in a family making less than $100,000 should get at least $1,000 a month, and each child in these families should get $500 a month. A family of four would receive $3,000 a month or $36,000 a year.
Some proposals provide more for children, and others distribute the funds to all Americans, regardless of how much money a family makes. The details matter, but the shared commitment to some sort of guaranteed income matters more.
A guaranteed income would not, of course, solve the problem of economic insecurity all by itself. Such a policy would have to be administered alongside programs like expanded unemployment insurance, Social Security payments and SNAP food benefits. The overlap in these programs would be a feature, not a bug, of a resiliency agenda.
We can no longer believe the false promises of an economic orthodoxy that insists there is a trade-off between growth and fairness. If anything, research suggests that the opposite is true: Equality helps drive growth. Many things that improve Americans’ lives, such as public investment to combat climate change and laws that rein in corporate power, will also be critical to growing our economy.
In the next several weeks, legislators in Washington will decide whether to include additional cash payments in the next stimulus package. Given the growing ranks of Democrats who support the idea, as well as the support of some Republicans, including in the White House, regular cash payments through the end of the crisis could become a reality.
A permanent guaranteed income, however, is unlikely to happen with Donald Trump as the president and Mitch McConnell as the majority leader in the Senate. Democrats should make resiliency the animating idea behind this year’s presidential campaign, with a guaranteed income at its center. If they win in the fall, they will have a clear mandate for a resiliency agenda and a guaranteed income when the country, by all accounts, will still be reeling from the ravages of the pandemic.
The coronavirus crisis has created staggering levels of suffering. Let it be a reason we commit to a more moral and just structure for our economy, one that ensures all Americans are better prepared for adversity in the future.
Chris Hughes is a co-founder of the Economic Security Project and a senior adviser at the Roosevelt Institute.