- In a world where governments, central banks and politicians are throwing around money, the idea of a guaranteed basic income isn’t as crazy as it once sounded.
- As the values of capitalism are changing with serious economic uncertainty over the next three years, our view of a basic income is also shifting collectively.
At the Last Futurist, we’ve been writing about UBI for a few years, with dozens of articles. In Canada, people have been having the Canadian Emergency Response Benefit over the past months. The CERB is set to expire in October. But for many August will be their last month.
For months, lawmakers have been paying attention to and pushing for some form of a universal basic income as the coronavirus pandemic roiled the economy and forced millions of Americans out of a job. With a 32.9% drop in GDP in the second quarter, it’s time to think about UBI in new ways.
Silicon Valley tycoons are pushing UBI. For their own wealth gaps to be maintained, it’s a good idea for the ultra elite to implement this basic income that could reduce mass riots and social unrest. It is the main pillar that former presidential candidate Andrew Yang took up in his campaign, centered around the premise that a UBI could alleviate or resolve many American issues.
But would a UBI really be a freedom dividend? Or would it become a bit like an economic prison for the less fortunate, those who aren’t even in the labor market anymore? After the pandemic, that’s guaranteed to be a lot more people.
The Basic Income Lab at the University of Stanford has published a useful overview report, What we know about Universal Basic Income: A cross-synthesis of reviews. Jack Dorsey of Twitter and Square is also interested in UBI, Bitcoin and pushing for a new world.
Most American live on debt and credit cards with limited to no savings. A UBI is basically what has been protecting the majority of North American consumers during the first five months of the pandemic. But what happens when that stimulus and those handouts stop?
The gravity with which a UBI is now regarded is a complete reversal of the reaction Yang first got when unveiling his platform. The pandemic has ushered in a new normal. Massive stimulus is seen as somehow good fiscal policy at a time of unprecedented job losses and economic uncertainty. Even the American stock market was propped up by the Fed with massive liquidity boosts.
This resulted in a new generation of day traders joining the stock market in numbers not seen since the tech bubble. In the attention economy, powerful companies like TikTok are offering “creators” huge monetary gains to stay active on its app instead of YouTube, Instagram and others that are less lucrative. The content basic income lives for some young people in 2020.
There’s no time like a pandemic to test out universal basic income in Canada. And it seems other parts of the world feel the same. While a UBI is good in some ways, it will also create new challenges to combat wealth gaps and to stimulate consumer activity.
On CNBC, you can hear how Government aid incentivizes people to stay home and not return to work. Capitalism is at a crossroads, with millions of young people who no longer trust greed-is-good and winner-takes-all capitalism.
These shifts in values and currents of economic uncertainty are changing the future of how a Universal Basic Income might come about. The grim economic outlook for the balance of this year and into 2021 means UBI trials should take place in 2021.
In the last ten years, Universal Basic Income has moved up the policy agenda in a world of increasing wealth inequality and unfavorable conditions for equality and social mobility for an eroding middle class in countries like the United States, Japan and Europe. A UBI becomes the natural solution to the growing hardships of the bottom 50% of the population.
The massive stimulus and bailing out we’ve seen in the United States is really a ominous sign for its debt driven consumer based economy. Yet somewhat ironically, just as the pandemic was taking full shape in the United States, progressives who’ve long criticized Yang’s UBI stance urged in March for direct payments to workers around the country.
As companies like Amazon, Apple, Microsoft, Google, Facebook and their Chinese counterparts become even more powerful, holding an artificially stimulated stock market up, the illusion of a great recovery holds consumer confidence up, at least artificially, for a few more months.
Canadian advocates of UBI are among the most persistent that this would solve many of our problems. Canada is in some respects pretty far left as a welfare state. Turning the CERB into a universal basic income is the logical progression for the program, according to many such advocates.
For most Americans, the $1,200 payment is not enough to cover all their expenses. Still a huge majority of Americans (around 74%) supported federal relief payments to help Americans cope with the economic disaster brought on by the pandemic.
So how is that so different from a UBI? When wealth inequality keeps accelerating, the erosion of the middle class eventually becomes a national emergency for countries like the United States, Japan, France and England.
The CERB has been a success in Canada, a country that models itself on strong banks and robust social services, albeit with high taxes. To the extent that we need special income support during this employment crisis, this is an opportunity to pilot basic income, perhaps at a provincial level. Canada could be among the leaders in a UBI, and likely already is.
CERB “gives financial support to employed and self-employed Canadians who are directly affected by COVID-19″. However for many North Americans, the pandemic is the event where they fell out of the middle class, and many are unlikely to recover their former position in their lifetime.
Just as the 2008 recession had millions of younger GenX and Millennials seeing their future warped, irrevocably changing their career trajectory, so too will 2020’s impacts linger for a lifetime.
In a world where consumers become “too poor to retire”, one wonders if a UBI is not somehow inevitable. There’s more and more pressure on the government, I would say, to extend the CERB. And if tit was transformed it into a UBI trial for Canada, it could change the future of universal basic income globally.
There will be a crunch time for millions of Americans, sooner rather than later. Unemployment benefits are set to fall 65% for the average person after July 31, when a $600-a-week boost expires. An enhanced federal unemployment benefit is expiring, even as initial jobless claims increased over the last two consecutive weeks. It’s bringing debate about UBI back to the fore in the summer of 2020.