Give People Money

How a Universal Basic Income Would End Poverty, Revolutionize Work, and Remake the World by Annie Lowrey

Thoughts

What if every month the government deposited $1,000 into your bank account, no strings attached, as long as you're alive? For some it would mean a savings account, paying of debt, buying a home... for others it would change their life by lifting them out of poverty. This book is the most thorough case for a Universal Basic Income that I've come across to date. Annie Lowrey handles knee-jerk concerns with stories, data, and research, and shows convincingly how making sure that all people have their most basic needs met (food, water, shelter) benefits us all. By guaranteeing every person a small, yet consistent amount of income, it would allow people to pursue work they wanted to do, and free up time for family, art, an education, volunteering, and planning ahead. It would provide dignity, equality, and empowerment to those who are marginalized, and allow those impacted by automation (soon that will be a lot of us) the opportunity to seek new paths while staying afloat. UBI is one of the most profound ideas in modern times, and this book is well worth a read.

If you'd like to buy:

Introduction: Wages For Breathing

pg 4

South Korea and North Korea demonstrated, so powerfully demonstrated, that what we often think of as economic circumstance is largely a product of policy. The way things are is really the way we choose for them to be.


pg 5-6

Perhaps the most prominent argument for a UBI has to do with technological unemployment—the prospect that robots will soon take all of our jobs. Economists at Oxford University estimate that about half of American jobs, including millions and millions of white-collar ones, are susceptible to imminent elimination due to technological advances. Analysts are warning that Armageddon is coming for truck drivers, warehouse box packers, pharmacists, accountatns, legal assistants, cashiers, translators, medical diagnosticians, stockbrokers, home appraisers—I could go on. 


pg 7

A UBI would end poverty not just effectively, but also efficiently, some of its libertarian-leaning boosters argue. Replacing the current American welfare state with a UBI would eliminate huge swaths of the government’s bureaucracy, and reduce state’s interference in its citizens’ lives: Hello UBI, good-bye to the Departments of Health and Human Services and Housing and Urban Development, the Social Security Administration, a whole lot of state and local offices, and much of the department of Agriculture. 


Chapter One: Ghost Trucks

pg 15

Yet to many, the driverless car boom does not seem like a stimulus, or the arrival of a long-awaited future. It seems like an extinction-level threat. Consider the fate of worker on industrial sites already using driverless and autonomous vehicles, watching as robots start to replan their colleagues. “Trucks don’t get pensions, they don’t take vacations. It’s purely dollars and cents,” Ken Smith, the president of a local union chapter representing works on the Canadian oil sands, said in an interview with the Canadian Broadcasting Corporation. This “wave of layoffs due to technology will be crippling.”


pg 16

It goes as far back as the spear, the net, the plow. Man invents machine to make life easier; machine reduces the need for man’s toil. Man invents car; car puts buggy driver and farrier out of work. Man invents robot; robot helps make car; robot puts man out of work. Man invents self-driving car; self-driving car puts truck driver out of work. The fancy economic term of ratios is “technological unemployment,” and it is a constant and a given.


pg 22-23

A Facebook chatbot started off doing simple, formulaic negotiations, asking for two of a given item and agreeing to settle for one, for instance. Then it began analyzing reams of date and trying to refine and improve its own ability to come to a good resolution—teaching itself, in other words. It started to fake interest in a low-value item, conceding it later in negotiation. “This behavior was not programmed by the researchers but was discovered by the bot as a method for trying to achieve its goals.” The Facebook researchers noted. The AI also started writing its own responses to bids, moving past the formulaic ones its engineers had given it. 


The AI got so good so fast that it began passing a kind of Turing test. “Most people did not realize they were talking to a bot rather than another person—showing that the bots had learned to hold fluent conversations in English,” the Facebook researchers wrote in a blog post. The performance of the best bot negotiation agent matched the performance of the human negotiator. “It achieved better deals about as often as worse deals, deomnstatrating the FAIR’s bots not only can speak English but also think intelligently about what to say.”


Perhaps the most striking outcome of the experiment: The bots, coded to communicate in English, eventually developed their own language to perform negotiations among themselves:


BOB: I can I everything else……………

ALICE: balls have zero to me to me to me to me to me to me to me to me to

BOB: you I everything else……………..


This looks silly to human eyes and sounds silly to human ears, granted. But I was struck by what a beautiful and remarkable technological feature it was, and how human, creative, and adaptive those bots could be. The bots determined that it was more efficient and effective to speak in their own shorthand, so they did. They expanded their own capacities, learning and teaching themselves to do not just simple negotiations but complex, almost human negotiations. “Agents will draft off understandable language and invent codewords for themselves,” one engineer told Fast Company. “Like if I say ;the; five times, you interpret that to mean I want five copies of this item. This isn’t so different from the way communities of humans create shorthands.” (After the bots developed their own language and stopped speaking in English, I would note, Facebook shut them down.)


pgs 25-26

Of course, some jobs could never be outsourced to a computer or a machine. Preschools would still need caretakers for help with toddlers. Reiki healing, serving a community as an elected representative, acting as the executive of a corporation, performing archival research, writing poetry, teaching weight lifting, making art, performing talk therapy—it seems impossible for robots to take this jobs over. But imagine a world with vastly fewer shop clerks, delivery drivers, and white-collar bureaucrats. Imagine a world where ever recession came with a  jobless recovery, businesses getting leaner and lighter. Imagine a world where nearly all degrees became useless, the wage premium that today comes with a fancy diploma eroded. Imagine millions and millions of jobs, forever gone. 


Sure some people would survive and even thrive int his world. A business that replaces a worker with a robot is often a business becoming more competitive and profitable. The stock market might boom, with shareholders, entrepreneurs, and the holders of patents, and so on seeing their earnings and wealth soar. Wealth and income might become more and more concentrated in the hands of fewer and fewer. Inequality, already at obscene levels, might become far worse.


pg 34

Gutenberg’s printing press is inarguably one of the greatest technologies ever dreamed up by man, revolutionizing the way that information spread and that records are kept. But it did little to speed up growth or improve productivity in the fifteenth and sixteenth centuries, economists have found. Or talk electrification. In the 1890s and early 19000s, American businesses and families started hooking into the power grid, brightening buildings at night and paving the way for an astonishing array of consumer and industrial goods, from door buzzers to space shuttles. Yet, as the economist Chad Syverson has noted, for roughly a quarter century following its introduction, productivity growth was relatively slow. The same is true for the first information technology era, when computers started to become ubiquitous in businesses and homes. As the economist Robert Solow—hence the Solow residual—quipped in 1987, “You can see the computer age everywhere but in the productivity statistics.” In most cases, productivity did speed up once innovators invented complementary technologies and businesses had long a while to adjust—suggesting that innovation gains and job losses of our new machine age might be just around the corner. If so, mass unemployment might be a result—and a UBI might be a necessary salve.


Chapter 2: Crummy Jobs

pg 39

We no longer have a jobs crisis, with the economy recovering to something like full employment a decade after the start of the Great Recession. But we do have a good-jobs crisis, a more permanent, festering problem that started more than a generation ago. Work simply is not paying like it used to, leaving more and more families struggling to get by, relying on the government to lift them out of and away from poverty, feeling like the American Dream is unachievable—even before the robots come for our jobs.


pg 41

The loss of manufacturing jobs has contributed to the broad decay in the unionization rate among private-sector workers—another major factor leading to stagnant wages and crummier jobs. (Those factories in Detroit and Pittsburg tended to be heavily unionized.) In the 1950s, one in there workers belonged to a union that could help them bargain for higher wagers, better benefits, more family and sick leave, improved working conditions, and so on. Now, just one in twenty has a union card. Had private-sector union density been in 2013 what it was in 1979, works would have earned an average of $2,704 more per ear, according to one estimate. 


pg 52

Fifty years ago, these workers might have been part of a union that would represent their collective wishes and ensure good pay and good benefits. But most Uber drivers are not part of a union, and the Ortiz family has been harassed and threatened for its relationship with labor organizers. Worker advocacy organization like Erin Kramer’s do what they can, but cannot negotiate contracts or raise union dues, not can Fight for $15 ensure that Burger King treats its workers with respect. “All these jobs might go away,” Kramer told me. “And they were never goo dpaying jobs to begin with, and the company is not treating its workers like it values them.”


A UBI would not just drive money and income to these people, I realized. It would act as a kind of twenty-first0century union, returning power to workers and radically redefining them as an investment for businesses, not just a cost to them. With a basic income, workers could refuse to take a job with low pay. With a basic income, workers could demand better benefits. With a basic income, companies would have to compete to win workers over. “It’s like making a permanent strike fund for people,” Andy Stern of the SEIU told me. “It makes a shift in the power dynamics. Imagine if you’re a young person calling in to see if you can get a shift at H&M or Nike for $8 an hour. Now, imagine if you did not need to do that.”


Chapter 3: Sense of Purpose

pgs 56-57

The economist Danny Yagan of the University of California, Berkley, has found that parts fo the country that had the worst unemployment shocks during the recession have still not recovered relative to regions that were sheltered from the blow. … The economist chalks it up to “general human capital decay and persistently low labor demand.”


pg 58

To paraphrase the essayist William Deresiewicz, every civilization has its virtue. For the Greeks, it was courage. For the Romans, duty. For us, it is industriousness.


It might be worth noting how historically anomalous this is, at least in the West. The Greeks and the Romans valorized a life of leisure and contemplation, with Aristotle seeing it as man’s highest calling.


pgs 61-62

Indeed, Americans see individuals as responsible for their own economic fortunes in a way that most people around the world do not. According to the World Values Survey, a significant majority of Americans believe the poor could become rich if they tried hard enough, whereas a significant proportion of Europeans disagree. In a 2014 Pew survey, a majority of Americans disagree that “success in life is pretty much determines by forces outside our control,” whereas a majority of Europeans concurred. “Americans believe poverty is due to bad choices or lack of effort; Europeans view poverty as a trap from which it is hard to escape,” argue the economists Alberto Alesina of Harvard and George-Marios Angeles of the Massachusetts Institute of Technology. “Americans perceive wealth and success as an outcome of individual talent, effort, and entrepreneurship; Europeans attribute a larger role to luck, corruption, and connections.”


pg 64

A major and visceral objection to a UBI is that it would allow or even encourage people to stop working. It seems like Economics 101: give people money, require nothing in return, and reduce their incentive to send long hours at a job. The concern about an economy that provided such benefit is a practical one: What would happen if fewer people were working? What would happen if everybody got something like a Social Security payment, and many people decided to retire? It is also a moral one. Americans abhor programs they see as letting people freeload, like food stamps, welfare, and even the Social Security disability program. Work is a virtue embedded in our tax code and woven through our safety net and inscribed in our culture. Work is valorized by the rich and poor alike. 


Yet the research we have on UBI-type programs suggests that even a large unconditional cash transfer might have less of a labor-market effect that Economics 101 analysis implies, and that the people who choose to work less might do for socially beneficial reasons, like raising a child or getting a better education. 


pg 65

One our best pies of evidence to this end comes form Iran, of all places. In 2010, the government decided to cut back on subsidies for goods like oil and food, and to start sending money directly to citizens instead. Bread and gas suddenly got more expensive, but households started to receive cash transfers equivalent to 29 percent of the median income to defray or offset the cost. 


Iranian politicians worried that the plan would “foster beggars” but two economists in a comprehensive study of tax records and other data found that the program reduced poverty, slashed inequality, and did not encourage Iranians to drop out of the labor market en masse. Indeed, some people actually worked more, probably because they used the cash infusion to expand their small businesses.


pg 67

Plus, in a variety of UBI and NIT experiments, much of the decline in hours worked came from women taking more time to care for children, young people attending school rather than take a low-paid gig, and unemployed people spending longer looking for a job. People with such benefits might also choose to spend more time taking care of an ailing parent, volunteering, making art, or spending time with their kids. That might lead to a small GDP and a lower employment-to-population ration, but would it really be such a bad thing? Ecnomix statistics only measure what they measure, and fail to capture the fullness of human life. 


pg 69

In Santen’s mind, a UBI is not a salve for a world of technological unemployment, r a powerful antipoverty measure, or a form of social dividend, or a way to boost the earnings of the working poor. Rather, it is all those things and more: a paradigmatic shift that would free people from having to do work that they did not want to do at all. A UBI would, in essence, lop off the bottom of the psychologist Abraham Maslow’s “hierarchy of needs,” where air, food, water, and shelter reside, with self-transcendence up at the other end. A UBI would give people the bandwidth to do what they wanted with their lives, he says. Let the robots do the dirty work.


Chapter 4: The Poverty Hack

pg 76-77

GiveDirectly’s interest in UBI had nothing to do with work, and certainly nothing to do with robots or unions or the battle between labor and capital. It was about how to do the most good. Hungry people need food, so give them food, right? Wrong. Give them money. People in need of income need work, so give them job training, yes? No, give them moeny. Children in impoverished areas need education, so provide them with preschools and scholarships? Sure, but even better, give their parents money. The argument was about the effectiveness of giving people cash rather than giving them stuff or providing them with services, and burdening them with paternalistic requirements in exchange.


The idea was that a UBI would empower the poor—that cash could empower the poor. 


pg 77

Passing out cash to the poor raises a few obvious questions…


First, wouldn’t it make people easy, in effect paying them to stop working. Wouldn’t a safety net fast become a hammock, as Republicans are so fond of claiming?


A prominent group of of economists recently looked at randomized control trials of government cash-transfer programs from Honduras, Indonesia, Morocco, Mexico, Nicaragua, and the Philippines. They found that receiving cash had no effect on the number of hours worked or the propensity to work, for both men and women. Indeed, cash-transfer programs seemed to boost the amount that men worked, in some cases. 


pgs 77-78

But wouldn’t people waste the money? What if they squandered it all on alcohol, drugs, cigarettes, thus reducing its antipoverty effect? 



Again, there turns out to be plenty of evidence to the contrary. Two researchers at the World Bank recently looked at nineteen studies of cash-transfer programs from around the world. There was no evidence that people who received cash consumed more vice products, 


pgs 78-79

The evidence here is also strong and reassuring. The Overseas Development Institute conducted a sweeping review of the literature on cash transfers, aggregating data from millions of recipients around the world. The results were clear. Improved school attendance. Greater ownership of productive assets, like cows and farming equipment. A drop in malnutrition. An increase in savings. Less cold labor. Expanded use of fertilizer and seeds. … Perhaps, the most important finding, if a tautological one: cash is highly effective at slashing the poverty rate.


pg 83

Before launching its UBI pilot, GiveDirectly provided large lump-sum payments to the poorest people in a given village rather than distributing small payments for a long time to everybody. A randomized control trial, the gold standard for research in academic economics as well as a number of other disciplines, demonstrated that these cash transfers had powerful effects. After receiving payment of $404 or $1,525, household assets increased by 58 percent. Business and agriculture income increased by 38 percent, with an implied annual rate of return of 28 percent. Children were 42 percent less likely to go a whole day without eating. Domestic violence declined. The transfers even reduced the amount of the stress hormone cortisol in recipients’ bodies.


pg 84

Frederick Omondi Auma had been in rough shape when GiveDirectly knocked on his door: impoverished, drinking, living in a mud hit with a hatchet roof. His wife had left him. But with the manna-from-heaven money, he had patched up his life and, as an economist might put it, made the jump from labor to capital. He had been woking giving taxi rides on another man’s motorbike, and used the GveDirectly money to buy his own. He has also started a small business selling soap, salt, and paraffin in a local town center; bought two cows, one of whom had given birth; and opened a barbershop in the coastal city of Mombasa. 


His income had grown from 600 shillings a week to 2,500. His wife came back. He had even stopped drinking so much. 


pg 85

Economic research shows this effect is common, with poverty acting as a kind of tax on mental bandwidth… “The poor must manage sporadic income, juggle expenses, and make difficult trade-offs,” argues one seminal study… “Even when not actually making a financial decision, these preoccupations can be present and distracting. The human cognitive system has limited capacity.


pg 90

But cash is a proven aid intervention, whereas many of the goods and services provided by charities are not. At times, charity aid can even be counterproductive, hurting those it means to help. Take Toms, the popular shoes. Buy a pair and a person living in poverty gets a pair too, a feel-good practice the company calls “buy one, give one.” But a glut of Toms shoes disrupts the businesses of local shoe manufacturers and shoe retailers, much as donated clothing from the United States has damaged the local retail trade n many African markets. Toms are also not appropriate in many situations and climates, but Toms shoes are what Toms gives out. And as I saw in Kenya, they to make their way into the hand of people who already have shoes, but might now have, say, electricity or clean water.


pg 91

Groups that aid refugees have also started providing money, in lieu of trying to guess exactly what displaced people might need. The International Rescue Committee, which works everywhere from Myanmar to Syria, describes cash as one of the most efficient forms of aid. “People escaping from conflict or disaster carry few personal belonging and little money. Cash relief allows them to purchase basic necessities and regain control of their lives. With 60 percent of refugees worldwide living in cities rather than camps, cash has proven to be an effective way to reach them faster and at lower cost,” it argues. “The power of choice allows refugee families to decide for themselves what they need most. It also allows them to become active contributors to the local economy.” 


Chapter 6: The Ragged Edge

pg 117

In many states, able bodied adults without dependent children are ineligible for any kind of benefit. If trapped in extremes poverty due to homelessness, theft, addiction, a local economic calamity, an abusive partner, or simple bad luck, there is often scant or no support to aid them. In Kenya and India, such poverty seems a regrettable, but perhaps unavoidable, function of a lack of development. But in the Untied Staes, it is not. It is a policy choice, given the capacity of the government, the wealth of the citizenry, and the example of other high-income countries that have ended deprivation within their borders. The issue is not the United States cannot pull its people above the poverty line, but that it does not want to.


pg 124

Work requirements do little to aid individuals who would have found a job anyway, and nothing to aid individuals unfit for the workforce, said LaDonna Pavetti of the Center on Budget and Policy Priorities, a think tank based in Washington. “Too many disadvantaged individuals want to work but can’t find jobs for reasons that work requirements don’t solve: they lack the skills or work experience that employers want, they lack the child care assistance, they lack the social connections that would help them identify job openings and get hired, or they have criminal records or have other personal challenges that keep employers from hiring them,” she wrote. “In addition, when parents can’t meet work requirements, their children can end up in highly stressful, unstable situations that can negatively affect their health and their prospects of upward mobility and long-term success.”


pg 127

But providing the poor with those steps might mean seeing them as deserving for no other reason than their poverty—something that is not and has never been part of this country’s social contract. We believe that there is a moral difference between taking a home mortgage interest deduction and receiving a Section 8 voucher. We judge, marginalize, and shame the poor for their poverty—to the point that we make them provide urine samples, and want to force them to volunteer for health benefits. As such, we tolerate levels of poverty that are grotesque and entirely unique among developed nations.


This poverty comes at an extraordinary cost—not just to the people experiencing it, but to us all. In 2007, Harry Holzer, a labor economist at Georgetown University, calculated that child poverty alone costs the United States about 4 percent of GDP a year, every year, by reducing productivity and work output, increasing the incidence of crime, and pushing public health expenditures of children when they become adults. That adds up to roughly $700 billion a year, a little more than the United States spends on the military and a lisle less than it spends on Social Security. Even that is probably an underestimate, he has said.

Providing everyone with the dignity of a stable life away from the poverty line need not be just an act of charity, in other words. It would also be a simple investment in the lives of people with creativity, ingenuity, and work to give to the greater good. 


Chapter 7: The Same Bad Treatment

pg 136

Europe has a safety net that eliminates poverty for nearly all of its native-born citizens, doing far more to blunt the effects of income equality as well. To accomplish this, the governments of the European Union tax and spend an amount equivalent to half of their economic output each and every year, versus about a third here in the Untied States. 


pg 138

Polities build political systems, political systems build redistributive mechanisms, homogeneity affects how much countries spend on social welfare programs. Countries with greater racial diversity tend to put only a small fraction of their GDP to social spending, while nations with a more uniform population spend much more: Belgium, Luxembourg, Sweden, the Netherlands, and France—all fairly to highly homogenous in terms of race and language—spend close to or more than 20 percent, Alesina, Glaeser, and Sacredote found. The United States, on the other hand, spends half that amount. 


pg 144

The most pernicious of all these disparities and the one most clearly constructed by American economic policy is the racial wealth gap. Data compiled by the Economic Policy Institute finds that the median net worth of white families is twelve times higher than median net worth of black families. A quarter of black families have no or negative net worth, versus just on in ten white families. This holds true even when taking things like age, income, and occupation into account. Blacks and Latinos make up nearly a third of the American population, yet own just 5 percent of its wealth. In terms of liquid assets, “blacks and Latinos are virtually penniless,’ the economist Darrick Hamilton of the New School writes. Ecluding retirement savings, typical black families have just $25 in the bank.”


pg 149

Such programs would afford middle-class white Americans living in the exurbs the same benefits as single black moms living in the rural south, or Latino families living in Las Vegas. That universality might insulate them from the stigma that has attached to programs like food stamps, section 8 housing, and welfare, and protect them from budget cuts from the right, the theory goes. Nobody complains about the unfairness of their neighbors getting Medicare or Social Security, because they know they will benefit from it themselves. 


Chapter 8: The $10 Trillion Gift

pg 153

It is not just that a UBI would help to improve wages for care workers, or make child care affordable, or compensate women for all the unpaid labor they do—though it would do all those things. It is that it would cement every person’s place in society as having value, and ensure that every person had some minimal level of capital and, thus, some minimal level of choice. It would reinforce the idea that labor and work are not and never have been the same thing, and it would challenge the notion that gross domestic product, jobs growth, and earnings are the most important measures of an economy.


pg 156

This is hardly an American phenomenon. In every country represented in a recent World Economic Forum report, men accumulated more hours of paid work than women. A much higher share of them were participating in the paid labor force, a gap that grows during the peak earnings years of the forties. In every country, their earnings are higher, with men making an average of $20,000 a year around the globe and women making $11,000. In every country, their pay rates are higher too, and they make more per hour spent in paid labor. Yet, erasing the distinction between paid and unpaid labor, it was women who did the lion’s share of work. The average man’s workday lasts for seven hours and forty-seven minutes. The average women’s workday lasts for eight hours and thirty-nine minutes.


pg 156

In the United States, there is a related crisis to contend with: the exorbitant cost of child care. Washington does not require businesses to offer paid time off for people having children, just twelve weeks of unpaid leave for certain qualified workers. In that, the o=country is unusual. According to the Organization for Economic Cooperation and Development, it is the only advanced economy that does not have a government program to pay new mothers or require companies to do so. (Finland, the Slovak Republic, and Hungary all provide three years of paid leave, and the across the thirty-four higher-income nations studies is just over a year.) Just 12 percent of American private-sector workers keep their paychecks when they are home with an infant.



The United States is the only country where a not-insignificant number of mothers return to work within days or weeks of giving birth.


pg 159

The vast majority of families in poverty with children do not receive any help for child care. That again makes the Untied States a rarity: its public Chile care spending as a share of GDP is one-quarter of that of sixteen other OECD countries. For that reason, parents earning less than $30,000 a year are more likely than not to seek family members to care for their children, where they can. And lower-income mothers are becoming more and more likely to drop out of the labor force all together. About one in three stay-at-home moms falls below the poverty line today, compared with just 14 percent in 1970.


Chapter 9: In It Together

pg 170

A UBI, I thought, was not so much about welfare as inclusion. Universal cash programs were a way of providing the poor with an opportunity to participate in the economy. Universal cash programs we a way of ensuing that all members of a society had a foundation to build on. Universal cash programs posted the power of workers. Universal cash programs provided women with choices when it came to raising their children and starting their careers. Universal cash programs were a powerful tool for racial injustice, ensuring that the minority would get what the majority got. Universal cash programs squeezed racial prejudice and paternalism out of the safety net, trusting people to use what they had in the best way for them. Universal cash programs were a way of helping overlooked rural communities. Universal cash programs were a way of aiding children, regardless of the competencies of their parents.


At a time of much polarization and inequality, Universal cash programs offered empowerment, inclusion, and togetherness—something for everyone, it seemed. They were not a safety net. They were a foundation.


pg 174

Retuning to the question that started the book: What would happen if a $1,000 check showed up in each and every American’s bank account each and every month for the rest of their lives? For the rich, not much would change. But for the poor, it would be transformative, with America’s impoverished families starting to look far more middle class. Bills would get paid, houses would get fixed up, more and better food would be eaten. Those families deep in poverty, without any cash income, would disappear. 


pg 175

With a UBI, child poverty would finally be eliminated, with long-range benefits countable in terms of years of life and billions and billions of dollars in earnings. For adults, the effects would also be profound. Studies of the Mincome experiment in Sauphin shows that there were fewer hospitalizations and mental-health diagnosis month those with guaranteed income. In the United States’ NIT studies, primary earners spent more time with their children and their rates of homeownership increased. 


pgs 178-179

There is a deep-held belief that refugees and immigrants are drawn to strong welfare states and are less deserving of aid because of it. Back in 1999, the economist George Borjas of Harvard posited the existence of “welfare magnets” in a widely discussed and highly influential paper, noting that immigrants clustered in states with more generous beneifts. Yet such immigrants seem to be attracted to places with more vibrant economies, job opportunities, and fellow immigrants—not a bigger dole. A more insidious barrier is the perception that refugees and immigrants drain the economy of wages and growth. … Yet contrary to popular opinion, immigrants and refugees tend to pay more in taxes than they receive in welfare benefits. One study of refugees who resettled in the United States, for instance, found they paid on average $21,000 more in taxes than they receive in benefits over their first two decades in the United States. A Congressional Budget Office study found that increasing legal immigration would boost government spending on Medicaid, tax credits, and insurance subsidies, but would also generate billions of dollars in new tax revenue—enough to reduce the deficit by $1 trillion over twenty years. And undocumented immigrants, barred from most safety-net programs but required to hand over part of they earnings to Uncle Sam, pay billions in federal, state, and local taxes each year.


pg 179

Most people do not let facts get in the ay of feelings, though, and evidence suggests that a more generous safety net might increase antipathy to immigrants and refugees—whit white Americans treating immigrants not dissimilarly to the way that they treat native-black and Latino Americans. A decade ago, Ann-Helén Bay and Axel West Pedersen polled Norwegian voters about the potential of instituting a basic income in the country. Most Norwegians liked the idea, unless they were told that immigrants would benefit. “A third of supporters switched to opposition when the proposal was modified to have non-Norwegians receive the benefit,” writer Dylan Matthews of Vox, summarizing the research. “This fits into the broader literature showing that increasing racial and ethnic diversity can prompt backlash by native white voters, who resent the newcomers and both for right-wing parties in response.


Chapter 10: $1,000 a Month

pg 187

Still, the knee-jerk reaction to some form of a UBI—crying that it is too expensive or unrealistic—feels over-wrought. Raising enough revenue for a $1,000-a-month UBI is more a matter of will than mathematics, and would bring the United States’ tax burden in line with that of the European social democracies. Maybe nothing in the history of this country suggests that we are ready to implement those kinds fo taxes, but nothing in the realm of public policy suggests we could not. Creating a top tax bracket at 55 percent, instituting a modest wealth tax, ending the mortgage interest deduction, implementing a value-added tax—proposals like this would get us there. Again, the United States does far less taxing and spending than other rich countries do. We are, by OECD standards, a low-tax country, even if it does not feel that way. A UBI would require us to turn into, and would turn us into, a social democracy, with all the taxes and benefits that come with it.


pgs 188-189

If robots were to start putting us all out of work at some point, it might make sense to tax them too—an idea that Bill Gates floated a few years ago. “Certainly there will be taxes that relate to automation. Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level,” he mused to the website Quartz. “What the world wants is to take this opportunity to make all the foods and services we have today, and free up labor, let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs. You know, all of those are things where human empathy and understanding are still very, very unique. And we still deal with an immense shortage of people to help out there. So if you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do these other things, then you’re net ahead.”


pg 195

Indeed, one of the lessons of a UBI is that our policy outcomes are not inevitable but choice. The United States would be significantly richer right now is it had passed more fiscal stimulus at the onset of the Great Recession. It would be richer if it invested in infrastructure. It would richer if it chose to ensure than no child grew up in poverty. Ir would be richer if it had worked to make black and white Americans, as well as men and women, true equals. Europe would be significantly richer if Germany had not insisted on austerity for its debt-laden periphery economies. Brazil would be in better shape if it rooted out corruption in government contracts. Japan would be larger if it allowed in more immigrants and figured out how to assimilate them. North Korea would be richer if it adopted policies of its neighbor to the South, as I saw.


Here, poverty in the United States is a choice. Stagnant middle-class incomes are a choice. Technology-fueled mass unemployment is a choice. Racism is a choice. The patriarchy I a choice. This is not to discount how deeply entrenched existing policies, interests, and tendencies are—but to recognize that while they might be entrenched, they are not immutable.