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Steven Schneible
Professor Henderson
13 April 2017
We live in an increasingly modern America. For many of us, economic disruption— the
buzz term that describes rapid, often tech-based shifts in normal business — is to be enjoyed:
kiosks at McDonald’s, delivery of almost any product, and, for some, self-driving vehicles.
However, while certain urbane Americans can qualify for PostMates service and automaton
Ubers, the more rural, post-Industrial Americans sit behind the curve. Areas once built around
stable industries like mining and manufacturing now languish in economic irrelevance, to the
point that some doctors in states like Alabama leniently qualify people for disability because they
lack human capital beyond their slight manual labor capacity (“Trends With Benefits”). As the
United States economy more rapidly moves toward stratification, the messy, ad-hoc systems of
social safety nets will not suffice to conserve a stable level of economic inequality. Universal
citizens, offers both a simplified solution to the problems of modern US capitalism and a
The United States has, simply, lost jobs to automation and outsourcing. In the glory days
of Detroit-based Ford, for example, a man could, without need of higher education, make $1800
a year; when adjusted for inflation, that totals to a little more than $45 thousand in today’s
dollars (All Things Considered). Ford and his successors created an environment wherein a
middle class could flourish based largely on production; however, as technology and outsourcing
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have come with the terrain of economic development, the US economy naturally sees much less
manufacturing:
Manufacturing’s “decline” refers mostly to job loss, which is stark and long-term. In
1970, the 17.8 million manufacturing jobs represented 25 percent of all 71 million U.S.
jobs. By 2012, the 11.9 million manufacturing jobs were only 9 percent of the 133.7
million total. The declines reflect two forces: automation and imports (Samuelson).
What are the communities formerly dependent upon industry to do? Lucky areas might gentrify
into cultured college and commuter towns, but many Americans in the Rust Belt are systemically
deserted; the Georgetown Public Policy Institute indicates that, come 2020, “65 percent of all
jobs in the economy will require postsecondary education and training beyond high school,” a
startling prediction indeed, with the average cost of one year at an in-state university clocking in
at $9410 (Carnevale et al.; “College Costs: FAQs”). While America is indeed prosperous, for
many, times remain hard with little to no escape in sight. Without a stabilizing policy like
Universal Basic Income, the disruption of the United States economy will continue to leave
As rural and poor citizens face rising costs of mobility, the rich of the United States
become richer. According to The Organization for Economic Cooperation and Development, the
.39, the fourth-highest in the world ("OECD Income Distribution Database”). Economists
recognize that while small amounts of economic inequality in the short run help to drive growth,
in the long run, wealth disparity can cause serious issues in a country, including decreased
growth, health, education, and political equality (Birdsong). Any potential diminishment of
education or health threatens the very cogs of the US economic machine: the resultant lower
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human capital values set our economy behind its productivity curve, which detracts from all and
benefits none. Although the United States is a capitalist nation that incentivizes investment and
work, when costs become too great to advance or apply one’s capital for one’s benefit, people
contribute less than of what they are capable to the economy. Welfare programs — and though
UBI is much more than mere welfare, it’s still undeniably a form of welfare — are called social
safety nets for a reason: they preserve the safety of a society by preventing income inequality
from reaching potentially dangerous levels. If capitalism is to continue to bring growth and
prosperity, we have to adjust for changing times; with economic disparity on the rise in the US,
we must combat with Universal Basic Income the costly and deleterious effects of extreme
inequality.
Unfortunately, welfare as we know it in the United States will not suffice to contend with
automation disruption and rising income disparities. Bureaucracy, the mode by which the
government functions, is neither efficient nor cost-effective. In the US, social aid is distributed in
a wide array of forms: unemployment benefits, loan subsidies, industry subsidies, Medicare,
Medicaid, disability benefits, the SNAP program. Employees must be paid to process claims,
offices must be rented for the employees, judges must take court time to process appeals; the
business of distributing social payouts on a wide scale is inherently beleaguered and expensive.
Universal Basic Income eliminates the need for time- and energy-costly departments of
distribution; under a policy of UBI, the simplification of the social payout system allows free
market influences to determine how the income is spent. Persons with Medicare would pay out-
of-pocket for needed treatments; SNAP beneficiaries would have money for food and
necessities; and any administrative red tape would disappear. The government’s resources ought
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to be directed toward protecting and serving the citizenry, and UBI’s simplification of welfare
Of course, conservative sentiments in the USA largely oppose welfare distribution, and
they have a point: welfare, simply, costs taxpayer money. As we stand right now, with gross
federal welfare spending totalling over $729 billion in 2017, which accounts for 16.5% of the
2017 Federal Budget, we already spend large amounts of money on the types of social programs
from which fiscal conservatives recoil (“Welfare Budget”; Amadeo). UBI draws the definitive
line in the sand beyond which we may categorically rule out further social safety net policy and
government entitlement programs that some conservatives argue constitute the “nanny state.”
UBI implementation gives the socially conscious a tool by which the systematically
disadvantaged may be helped, but staunch conservatives’ concerns are too hereby addressed. By
eliminating the bureaucratic algae bloom of various welfare-distribution committees and their
evaluative red tape, UBI condenses the government’s social outreach arm — which has always
existed and, despite the hopes of more optimistic conservatives, will not disappear — into a
opportunity, which sentiment, crucially, differs from a desire to take from the rich and give to the
poor. If this UBI policy of inflation-adjusted, above-the-poverty-line minimum per year were
enacted, every citizen — from the poor Louisiana single mother to Bill Gates — would receive
the stipend from the government. The policy does not redistribute wealth so much as it shares the
opportunities afforded by wealth; in a highly advanced society wherein some people still struggle
to make ends meet, much less escape their problem-ridden situations, we are compelled to help
them in the spirit of FDR’s Four Freedoms. Granted, we already help those in need, but not well
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or effectively. For example: the aforementioned Alabamians who go on disability even though
they do not necessarily meet government standards — in fact, many end up appealing, costing
the government more money — do so because the incentive structure works against them. In an
area where jobs are scarce and relatively low-paying, many consider it prudence to earn
marginally less on disability than work a dead-end and, more often than not, manual labor job;
once the disability is approved, however, not only do the beneficiaries seldom get off the
program, but they also disappear from workforce statistics (“Trends With Benefits”). UBI gives
people in poor areas with low-income jobs an incentive to keep working: a policy of UBI is non-
conditional. Guaranteed income translates to a security that enables in the course of wealth
redistribution.
The mere thought of the government distributing money with no questions asked does
indeed beg the questions of government overreach. Admittedly, UBI is a social payment and, as
such, places the government in a distributive position that some may consider to be luxurious
welfare expansion; however, the goal of UBI is not to allow citizens to kick back and relax —
the enactment of UBI promises agency to US citizens, an opportunity to invest in themselves and
society for the betterment of the United States. In classical economic models, people generally
do what is best for them; the poor, uneducated Rust Belt citizen might save for college with his
or her UBI check while he or she continues to work. The middle-class recent college grad could
start a business he or she might not have otherwise pursued. Competition encourages growth,
yes, but UBI creates an environment in which the competition’s odds are more palatable: people
tend to fear losing more than they anticipate gaining, and the slight reduction of risk for
college or start a business, but money distributed, inevitably, one day becomes money spent. The
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worst-case utilization of UBI — the population of people who decide to exist at the margins
without contributing — still at its crux has people spending money, which feeds the economy.
Universal Basic Income does not make people dependent upon the government, but rather uses
UBI also reduces or eliminates the paternalism that is typically a prominent feature of
welfare programs. It does this by ending government’s role as the arbiter of eligibility to
receive benefits. Under UBI, everyone is equally deserving. Then, once individuals
receive their income, it allows them freedom to decide what to do with it: no seafood
(Calder).
If Americans wish to see growth and the efficient utilization of human capital in the years to
come, then UBI must be implemented to protect the mobility and agency of citizens in an era of
Certain arguments against Universal Basic Income point, and not without cause, to the
required to work or prepare for work as a condition of receiving aid... As noted, the UBI
abandons that principle. By removing work requirements from welfare, UBI would
decrease work among the poor and increase dependence on government (Rector and
Teixeira).
However, such an outlook implies that people have equal opportunities and incentives, whereas
(“Economic Mobility of the States”; Dilinger). Rector and Teixeira’s argument asserts a
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perfectly economically mobile system, when it is, in fact, lack of economic mobility that
contributes to poverty. Researchers in Finland who are testing UBI have a more favorable view
of economic incentive structures: “A key goal of the Finland experiment is to give unemployed
people incentive to work by providing them with financial assistance even once they're
employed” (Schulze). Incentive to work doesn't necessarily need to be predicated upon fear of
poverty; empowerment and upward advancement can work in tandem. After all, the proposed
policy of UBI is just a stipend, hardly capable of giving Americans luxury. Universal Basic
Income is a far cry from a moral hazard, in the polarized and shifting economic environment;
allowing for mobility and growth creates room for expansion rather than hazard.
Universal Basic Income will be expensive; there can be no doubt that such a policy
According to Michael Tanner’s calculations, if the government provided just $12,316 for
every individual in the United States, or enough to bring them to the non-elderly federal
poverty line, the cost of UBI in the U.S. would be nearly $4.4 trillion, more than the
entire U.S. federal budget. In his paper on the topic, he notes that “even if the guaranteed
national income replaced every existing anti-poverty program, we would still be some
$3.4 trillion short.” In order to make ends meet in this scenario, the tax liabilities of high-
A large, expensive policy like UBI requires large sacrifices. However, a high implementation
price is not necessarily negative; UBI’s disruptively large cost would force the federal
government to significantly curtail extraneous spending and bureaucratic bloat. With the large
budgetary cuts required, powers not exclusively given to the federal government will, as they are
cut in accomodation, return to the states just as the Constitution mandates. UBI invests directly
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in the citizens, not the government. Though higher taxes will be necessary, the promise of
security to Americans will temper the bad taste of a larger paycheck deduction, which deduction
UBI might seem like pie in the sky at first glance, and the prospect of wealth
redistribution can strike many as anti-capitalist. But in the rapidly changing United States of
today — a United States wherein economic inequality, manufacturing job loss, and increasing
behind — a policy of agency and equal opportunity permits growth and a stable future of the
capitalist system that made the US the superpower that it is today. We live in a rich country of
opportunity; if we want to continue to live in such a state, then we are compelled to implement a
policy of Universal Basic Income. Citizens want to live the American Dream of upward mobility
and security; UBI merely enables them to do so. The United States must help itself help its
citizens in order to stay the waves of disruption that already lap at our shores.
Works Cited
All Things Considered, Sarah Cweick, NPR, 27 Jan. 2014. Accessed 2 Apr. 2018.
Amadeo, Kimberly. "U.S. Federal Budget Breakdown." The Balance, 22 Mar. 2018. Accessed 2
Apr. 2018.
Birdsong, Nicholas. "The Consequences of Economic Inequality." Seven Pillars Institute, The
Seven Pillars Institute for Global Finance and Ethics, 5 Feb. 2015. Accessed 2 Apr. 2018.
Calder, Vanessa B. "Universal Basic Income — Disease or Cure?." The Cato Institute, Cayman
Carnevale, Anthony P., Nicole Smith, and Jeff Strohl. "Recovery: Job Growth and Education
"College Costs: FAQs." College Board, Big Future. Accessed 2 Apr. 2018.
Dilinger, Jessica. "US Poverty Level By State." World Atlas, 25 Apr. 2017. Accessed 3 Apr.
2018.
"Economic Mobility of the States." Pew Trusts, The Pew Charitable Trusts, 10 May 2012.
Apr. 2018.
Rector, Robert, and Mimi Teixeira. "Universal Basic Income Harms Recipients and Increases
Samuelson, Robert J. "The Myths of Post-Industrial America." The Washington Post, edited by
Martin Baron, The Washington Post, 7 Apr. 2013. Accessed 2 Apr. 2018.
Schulze, Elizabeth. "One Year On: Is Finland's Free Money Experiment Working?." CNBC,
Schittenhelm, Claus. "What Is Loss Aversion?." Scientific American, Scientific American, 1 July
"Trends With Benefits." Produced by Chana Joffe-Walt, This American Life, 22 Mar.
"Welfare Budget." Federal Safety Net, edited by Bob Pfeiffer, 11 Mar. 2018. Accessed 2 Apr.
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2018.