78% of Swiss voters are rejecting a minimum basic income proposal that they are currently voting on. I would have voted against it too, as it has some major flaws, particularly in its vague wording and its coverage of everyone legally residing in Switzerland and not just Swiss citizens—a problem given Switzerland’s agreement to open its borders to residents of other European countries.
I think, however, that a better designed minimum basic income policy without those flaws would be a great idea for any country, including the United States. This doesn’t have to be an unrealistic utopian scheme with support only from the far left. Switzerland’s proposal was just from its far left (which is part of why it failed), but Finland and the Netherlands are set to pilot smaller-scale basic minimum income programs with support from coalitions that include right-wing and centrist as well as leftist parties. There have also been basic minimum income experiments in Canada, India, and Brazil that show it could work. We would need to start with pilot projects and experiments in particular localities, and do a lot of research to come up with the best approaches and demonstrate proof of concept, but I think it could be a realistic policy that could enjoy support from across the political spectrum within a few decades.
It will eventually be necessary to have basic minimum income to prevent widespread homelessness and starvation as automation, crowdsourcing, and the “sharing economy” reduce employment opportunities. However, it should be limited to adult citizens, to avoid motivating too much immigration and high fertility. A minimum basic income could replace unemployment insurance, disability insurance, food stamps, welfare, Earned Income Tax Credits, much of Social Security, and other ways the government currently supports the unemployed, the retired, and the working poor (and save a lot of money by eliminating the costly bureaucracy associated with those programs). However, it should not replace programs specifically for children, such as Head Start, public schools, free school breakfasts and lunches, afterschool programs—the key is to provide what children need to thrive without giving money to parents that could motivate them to have more children. Also it should not replace Medicare, Medicaid, Obamacare, or whatever better universal healthcare policy we come up with in the future, as people should still have access to healthcare even if they choose to squander their minimum basic income on things that are less important than healthcare.
If the political climate does not allow for increased taxes that would allow for a minimum basic income high enough to alleviate poverty, the minimum basic income could pay for itself just by replacing most of the social welfare programs we currently have (other than healthcare and education)—it would mean that poor people would get about the same as what they currently get from the government (which is admitted not enough to alleviate poverty), but without the stigma, extra bureaucracy, lack of freedom and options, and political unpopularity that means-tested welfare entails. If the political climate does allow for increased taxes (which may be more likely once the stigma and perceived “unfairness” of means-tested government support are removed), the minimum basic income could gradually grow even higher, allowing for even more of the above benefits and the alleviation of poverty.
A basic minimum income should cover the minimum amount needed for enough food to avoid malnutrition and the renting of one small room in a house or apartment in a city with average housing prices. It should be the same for every adult citizen, to increase the sense that it is fair; that means that people in areas with extremely low housing prices would have quite a lot left over for luxury and savings, while people in areas with extremely high housing prices would have to live at poverty level with many roommates. This would actually be good because it would give people an incentive to move to areas that have lower housing prices due to being less crowded or more depressed areas, and move away from areas that have higher housing prices due to overcrowding. People can’t do that now because they have to stay in overcrowded areas to get or keep jobs, but with minimum basic income, some people could just live in remote rural areas that few others want to live in, and not have jobs but just do subsistence farming/gardening and volunteer work for their families, and small local communities or online communities. And most would want to do some kind of work— no one really likes to do nothing for long, unless they are severely disabled. Able-bodied people would also have more support and incentive to take in their disabled friends, neighbors, and family members who can’t work but can contribute to household living expenses, instead of letting them be institutionalized or live homeless on the streets. An entire extended family and its close friends living in San Francisco or New York City could pool their minimum basic incomes to buy land in a cheap rural area and set up their own community there, and live with better quality of life.
Ideally, if the electorate is progressive enough to want to have a better social safety net than we currently have, the basic minimum income would be funded by taxes set at a level that would result in most middle class people paying a proportion of their overall income (including the basic minimum income plus income from work) that is similar to what they paid before the basic minimum income was instituted, while the tiny minority of citizens who have much more income and wealth than average would see their overall incomes decline, and the larger minority who have far less income and wealth than average would see their overall incomes increase. The increased spending that would occur would also increase the incomes of business owners, which would lead to increased tax revenues that will pay for the minimum basic income for people who are not currently getting means-tested government support. So society would get a lot more bang for its buck than if it just tried to reduce poverty by increasing funding for current means-based social welfare programs.
But the electorate doesn’t have to be more progressive for basic minimum income to work. If the electorate is the same as it is now, it could be very stingy to poor people and very generous to rich people like it currently is, and very little would change in how much people pay in taxes or get in social welfare payments, except that basic minimum income would be perceived as more fair (and thus more likely to be expanded instead of shrunk) than current means-tested welfare programs, and that poor adult citizens would get more dignity, freedom from dealing with means-testing bureaucracy, freedom to move to less economically developed areas, demand better workplace conditions knowing that they won’t starve if they are fired as a result, take risks on starting businesses that might start out unprofitable, and incentives to work more (without fear of losing means-tested welfare, which currently drives many to not work or just do illegal off-the-books work), have fewer children, take in elderly disabled friends and relatives who can’t work. If everyone gets the same amount of minimum basic income, then the electorate will be more resistant to cutting it and open to paying more taxes to expand it. It would also be a simpler, more centralized system that would be more able to respond quickly to economic crises and massive unemployment with quick, economy-stimulating massive expansions. I think these advantages are worth the switch from our current system to a basic minimum income program.
The basic minimum income should be set at a level similar to the income level of someone who wouldn’t pay income tax under our current system anyway. In 2015 for example, that was $10,300 for a single person. The government wouldn’t lose any tax revenue from someone who earns that much even if she quits her job. If she stays at her job and earns $9,225 on top of the $10,300 she would get as basic miminum income, she would be taxed at 10% of that $9,225, so the government would get $922.5 from her in income tax, while her income would almost double. She probably would want to keep her job, since it would be double what she would get if she quits her job. With her income doubling, she would be spending more and therefore paying an addition 5-20% of her income in sales tax and property tax (or rent, part of which goes to pay her landlord’s property tax), and her spending will increase profits for the businesses she buys from, which will also pay more taxes on those profits. In addition, she will be saving government bureaucracies the cost of administering need-based aid to her. All those taxes and savings would make it possible to have basic minimum income for everyone without increasing anyone’s tax burden (if the electorate isn’t willing to redistribute from the rich to the poor more than it does currently). So someone currently making $40,000 a year would pay $10,300 more in taxes but get $10,300 back in basic income, and the poor woman currently making $9,225 would only get $10,300 no matter how many kids she has, which means she will have an incentive to avoid having a lot of kids. If she really wants a lot of kids, she will have to live with a lot of roommates and/or family members, or move to an area with an unusually low cost of living, in rural middle America or even in Asia, Africa, or South or Central America, if she wants to have a lot of kids (an option not currently available to poor Americans). If she stays in an expensive area, school breakfasts and lunches and meals at afterschool programs should keep her kids from starving, and Obamacare and/or medicaid should keep them healthy. If the electorate is willing to be more generous to poor people and less generous to rich people, more money could be redistributed from the rich to the poor, so she would have more options and she and any kids she has would live more comfortably.
A minimum basic income should eventually replace Social Security completely, but only about 80 years after minimum basic income starts, after the deaths of everyone who paid into Social Security before they started getting minimum basic income, since people currently paying into social security are doing so under the assumption that they will get more if they paid more and less if they paid less. That assumption is actually regressive and not sustainable at current levels without constant population growth; a different assumption will have to replace it within 80 years anyway. Basic minimum income would replace that assumption with the assumption that every adult citizen is guaranteed a basic minimum income regardless of how rich or poor, old or young, healthy or disabled they are, and that the amount of this income will depend on how much the electorate is willing to pay in taxes (while knowing that they and others they care about will get whatever increases there are in basic minimum income that they vote for). I think it would enjoy the same political popularity as social security as a result of the fact that everyone would get the same amount, instead of having the current system, in which means-tested programs are politically unpopular because a lot of people think (wrongly) that people who are lazier or of a different color than themselves are getting more than themselves. People currently receiving Social Security, and everyone who paid into Social Security before the assumption changes due to the start of basic minimum income, will gets what they were promised under Social Security. Younger generations will know that they will get the same basic minimum income as everyone else every year, instead of getting more if they paid more as Social Security assumes, so they should do their retirement planning accordingly (but even if they don’t, they will be kept from starving in their old age by their basic minimum income).
I think even most middle class people, and even some high-income people with little savings whose high income comes from jobs that could disappear due to changes in their industry, would actually appreciate the thought that they, too, would have a safety net if they were to lose their jobs, and that their poorer friends and family members can have the dignity of a universal safety net instead of needing to ask them for loans and gifts. The key is to make the amount high enough for an individual to have basic level food and housing, but not so high that a lot of people with the ability and opportunity to work at jobs they would not find too unpleasant would stop working.
What do you think? Would you support a minimum basic income policy like this? If not, are there tweaks that might get you to support it?