A case for a basic income

Social inequality in the United States is rooted in a number of factors, but class is a key one. Without access to funds, people find it difficult to go to college, achieve life goals, confront poverty, and prevent the buildup of debt. People without financial freedom get backed into corners and the results are bad not just for them, but for everyone — the social safety net that we fund and support, such as it is, bears the expense when people can’t afford health care or need assistance with buying food. The US has a sketchy, rough social safety net that isn’t run efficiently and needs considerable repair — in one example, health care could be streamlined in a universal system from presidents on down to the rest of us, and yet we have a hodgepodge of federal programmes, funded insurance, private insurance, and private pay patients.

One way to address our problem of poverty is a guaranteed minimum income, or, perhaps better yet, a basic income. The two concepts are closely related, but they work differently — and the guaranteed minimum income is likely to be a better sell for those who disagree with the idea that all people should be provided with equal opportunities to engage in society, so it’s the one that advocates are pursuing.

The logic behind a guaranteed minimum income is essentially an income floor: Everyone must make at least that much money, and if they don’t, they need to be provided with financial assistance to meet the income gap. If that floor was set at, for example, $20,000 annually and someone made $15,000, that person would be entitled to a $5,000 disbursement to make up the difference. Guaranteeing a minimum income wouldn’t address huge gaps in financial equality, but it would ensure that everyone would have at least the bare minimum they needed to survive; enough to pay rent, to eat, to cover basic living expenses, to hopefully put money aside for retirement and other needs.

To develop a rubric for a guaranteed minimum income, we definitely need to raise the minimum wage and rethink what we socially consider to be a livable annual income. The system we have now is clearly woefully out of date, because people making minimum wage can still be homeless, unable to meet living expenses, and struggling, even when they’re working well in excess of 40 hours a week. Anyone working 40 hours a week should be making enough money to live on at minimum wage, and when that’s not the case, you have a considerable problem that you need to address.

Such an approach to income and survival in the United States would make it clear that we value all citizens and want to promote a basic quality of life. It would also do a great deal to lift people out of poverty and create more financial and social opportunities. People who aren’t living hand to mouth have more room to contribute to society in whatever way appeals to them, whether that’s developing creative work, attending institutions of higher education, pursuing different job training, volunteering with community organisations, or something else entirely. Having the safety net of always knowing that you will make enough money to survive also means that you don’t have to turn to government benefits to survive — especially if it’s paired with nationalised health care to remove a substantial portion of living expenses.

The guaranteed basic income, by contrast, provides a set amount of money to everyone annually, regardless as to income. Alaska is one of the few regions in the United States that does this, paying out an annual dividend to qualifying residents based on oil and gas exploration. Alaskans don’t receive enough to live on, but they do receive a small benefit, though it is taxable. Providing basic income across the table eliminates the need to spend time establishing and monitoring income thresholds, and smooths the way by just handing out money to everyone rather than forcing people through means testing and an application process. On the flip side, however, it also means that people who don’t really need funds from the government get them anyway. For people who need that basic income, for whom it can make a huge and life-changing difference, getting large payments from the government is important — but for others, it can be largely meaningless.

The notion of some form of social dividend has been advanced by a variety of economists and theorists, including socialists, perhaps not surprisingly. There’s also a conservative case for it, however, illustrating that this is not just an issue of raging commies wanting to see social equality achieved through stealing money from the rich and giving it to the poor (though strictly speaking, if you refer to ‘actually paying your taxes’ as ‘stealing’ and ‘receiving social benefits to end poverty and promote high quality of life’ as ‘giving,’ I’m all for stealing from the rich and giving to the poor). This is fundamentally a social problem and addressing it is to everyone’s benefit, from low-income people getting a chance at building better lives for themselves to wealthier people benefiting from a stronger, more educated, healthier, happier society because everyone makes at least enough to survive through a combination of government supports and wages.

The United States is quite naturally highly resistant to any social measures that might be considered ‘socialist,’ as evidenced by the horrified and aggressive reaction to Obamacare, which is not socialist at all. Yet, someday we’re going to need to be addressing these issues, and the longer we wait, the worse it will be. The US is facing staggering income inequality, and it’s not going to be solved by ignoring it.

Image: We’re saving all our money to buy a new Death Star, Kristina Alexanderson, Flickr