In a recent essay, I argued that instead of a jobs guarantee, a more progressive solution to the country’s economic woe is to decouple survival from wages.
That is, we should build an economy in which people can live comfortably outside the labor market if they so choose. The piece emphasized two policies for achieving this: a guaranteed income and national venture fund granting guaranteed capital investments. That is, every citizen would unconditionally receive a basic, livable income and would be eligible to receive venture seed funding from a publicly guaranteed, democratically mediated source. This would give people more leverage in negotiating better working conditions, allow more people to self-employ, and give more people access to capital and the means of economic production. I have seen three primary objections to this kind of policy: one is always cost. The other two are contrary but often come from the same groups: that wage labor is not forced and that only forced labor will ensure that enough people work to sustain economic dynamism.
If you apply a living wage—around $15/hour—to a 40-hour work week, 52 weeks a year, the income that this UBI would provide is about $31,000 per adult, per year. If you multiply that by the US population of people over 18, around 230 million, you get a number that’s about double the federal budget and about a third of GDP. A subsistence UBI would not have to cost this much. There are plenty of ways of reducing that cost, like programs in which people can forfeit that income if they make a certain amount in other work, or a proportional tax on UBI-derived incomes when one makes more than that in other work.
But considering that wages are currently account for about 42% of GDP, a subsistence UBI would entail a restructuring of the economy, not necessarily a higher economic cost. And with universal access to liquid capital, as a UGI (universally guaranteed investment) would provide, economic dynamism would certainly increase. But no matter how it’s split, this kind of program would entail a massive overhaul of the budget and economy. The budget is ripe for it. The country, government, and economy would be far better off with huge cuts in military spending, huge increases in taxes on the wealthy (people and corporations) with precedence in the mid-20th century when we had a big middle-class, and a restructuring of welfare programs.
Forced Wage Labor
Another objection is that wage labor in the US is not forced. This is self-evidently false and often made in bad faith. Try quitting your job and affording shelter, food, or healthcare, which are inarguable necessities for living. Most people are not able to live long and healthy lives from publicly-funded support provided in the US. If the economy only provides the option of labor or death, then labor is absolutely forced.
Not only are physical necessities contingent upon labor in the US, but social acceptance is connected with wage work. Unpaid domestic work is often not recognized as real labor and those not employed in wage work are widely maligned. The argument that if you don’t like your job you can just leave and get another is also often made in bad faith, and is weak. With most jobs either entailing underpay, overwork, precarity, and some form of exploitation, the job market simply doesn’t provide many decent, humane jobs.
Value of Work
The final objection is to suggest that if people are not forced to work, people will stop working and the economy will halt. No one can know whether this is true empirically because a UBI-UGI implemented at scale would be required to answer that question. Small UBI experiments cannot answer that question either given that none have provided representative samples in an entire economic context of universal incomes. But it doesn’t matter.
This is not an economic utility question, but a moral question. Nobody should be forced to work. Period. It doesn’t matter if a UBI-UGI economy causes a mass economic downturn. If that’s the cost of freedom, so be it. Human dignity, human autonomy and agency, and the freedom to control one’s own time is more important than the GDP, stock prices, or the wealth of private companies.