Josh Davis, writing for Grassroots Economic Organizing, shares his alternative to UBI:
I was fortunate enough to get to attend the 2016 Worker Cooperative National Conference held in Austin, TX at the end of July. A few issues came up over the course of the weekend that piqued my interest, largely because I hadn’t heard them discussed before in the context of worker cooperatives. Specifically, I was (pleasantly) surprised to hear a nuanced discussion of Universal Basic Income (UBI) during Sunday’s panel discussion with Ed Whitfield, Douglas Rushkoff, and Esteban Kelly. I was also intrigued to hear of the USFWC’s plans for creating a joint 401(k) retirement plan for worker co-ops. Since there was, unfortunately, very little time during the conference for conversations around these issues, I thought I’d share my thoughts in a couple of blog posts.
Universal Basic Income is an old idea, but one that’s been getting a good deal of renewed attention lately. The essence of UBI is that every citizen receives a monthly income from the state, regardless of work or income status. The justification for such a program is to ensure everyone a minimal standard of living without the bureaucratic hassle and social-shaming indicative of means-based welfare programs. Recently, UBI has been forwarded as a possible response to the increasing displacement of workers by robots and computers. Silicon Valley “disrupters” have been among the most vocal UBI proponents. Douglas Rushkoff brought up UBI during the Sunday panel discussion and presented the idea in a positive light. Ed Whitfield pushed back against that notion, however, by noting that providing a UBI is not in anyway transformative, so long as that income is being spent to buy things from traditional, capitalist businesses. A basic income could very well serve as an excuse to not address the underlying problems with our economy, such as absentee ownership, low wages and exploitative working conditions.
I have been a sometime advocate of UBI, on the basis that any policy or program that relieves some financial hardship for us low-income folks is to be supported. However, Ed’s critique is not one to be taken lightly. A remedy that merely alleviates the symptoms may serve to hide the underlying disease and make addressing the fundamental sickness more, not less, difficult. However, there is another policy proposal which, I think, has the potential to both improve the financial stability of the un- and under-employed, while also avoiding the pitfalls that Ed drew attention to in his critique. That policy is generally referred to as a Job Guarantee. My particular preference is for a Job Guarantee combined with a public budgeting process that would empower both individuals, by providing them with a guaranteed job, and communities, by letting them decide what work needs doing in their area.
Unlike a UBI, a Job Guarantee (JG) is not an untested policy in our country. The Civilian Conservation Corps (CCC), the Work Projects Administration (WPA), and similar programs put in place during the Great Depression had the intent of providing useful jobs for the many people who had been left unemployed by financial and ecological collapse, and for whom the capitalist economy proved unable to provide either employment or income. The idea of paying un- and under-employed people to do socially useful work at government expense would, therefore, likely be an easier sell for most people than a UBI.*
My particular version works like this: communities (or perhaps neighborhoods in large urban areas) would engage in a participatory budgeting process to determine what work needs to be done in the community. Unemployment offices (which would now be employment offices) would then have the task of matching people to the tasks that the community has agreed upon. Jobs could range from tutoring/mentoring young people or home visits and assistance for older folks, to building parks, playgrounds and other types of communal space. A JG policy along these lines would not only provide much needed income for the many people left out in the cold by the current economy, but also give communities a way to guide the program to avoid the inevitable problems of centralized, “from-on-high” decision making. And the psychological benefits of performing useful work for your neighbors and community should not be overlooked. Whereas a UBI might lead to a sense of dependence and helplessness among those who depend on it, a well-implemented JG would provide not only money but a sense of purpose and the pride that comes with knowing that you are a valuable member of your community.**
A JG program isn’t something that you’ll hear much about in political discussions nowadays, but I think it’s high time we try to change that. There’s plenty of work that needs doing in this country, and plenty of people with the time, skills and passion to do it. As cooperators, I think a Job Guarantee is a policy we can all get behind.
In my next post, I’ll dive into some of my thoughts around 401(k) retirement plans for worker co-ops, and how we might be able to do retirement better than the traditional economy (it would be hard to do it worse).
* The common argument against both UBI and JG programs is the need to fund them through taxes or borrowing. This is, however, a specious argument when the Federal Government is the one footing the bill. The Federal Reserve regularly creates new currency when it purchases securities from banks, as it did to the tune of $2+ Trillion during the financial crisis of 2008. The requirement to offset Federal spending through taxes and borrowing is a legal, not a technical, constraint. There is nothing apart from a lack of political will that keeps Federal programs from being directly funded, without regard to effects on the (misleadingly named) Federal budget deficit. For an in-depth explanation of the economics involved, see the University of Missouri-Kansas City econ department blog, New Economic Perspectives.
** A third benefit would be to create a de-facto minimum wage at whatever rate JG wages are set. We would expect that private employers would have to pay at least as much as JG jobs in order to attract workers. Whereas a UBI might allow employers to reduce wages (since they know their employees all have a minimal financial cushion), a JG would stop employers from offering lower wages and benefits to workers, since everyone would have, as it were, a standing job offer.
I’m quite persuaded by the arguments here but believe such a programme will take years to implement simply because the systems, processes and business model are still not in place to make such an investment possible. Nor is the evidence there either.
Having said that, the new and emerging forms of community currency (think locally issued IOUs) would be an alternative way to build community and unlock the stored value that is untapped within communities of place.
I’d support this idea but I’m curious how those incapable of work would be provided for within such a system? Whether their incapacity was temporary or permanent would also complicate things.
I’d personally prefer a Universal Basic Income, because I’m an artist and have been for 35 years. It is difficult at best to make a living in the arts, mainly because so much time is wasted working a 2nd job to pay the bills. This proposal simply transfers the work to the public sector rather than private. I’d be more than happy to decorate public spaces, libraries, schools, parks etc. if possible. Getting rich certainly is not the issue. Creating art is.
Thanks for the responses, everyone. I’m aware of the gap in any JG proposal for people who are unable to work. The short answer is we need to keep our other safety net programs in place (and strengthen them) for people who just can not work. The longer answer is that we need to re-think what valuable work actually is. I know a lot of people on disability who would love to do what they can to help others, especially if it paid the bills as well.
As for the untested nature of the proposal, I disagree. The federal works programs of the 30s and 40s are proof that we can, and have, provided employment for millions and created real value for everyone. And the WPA included jobs for artists and writers as well. Again, I think most of the issues could be addressed with a little creativity.
Thanks again for reading, and thanks to Stacco for cross-posting.
Thanks Josh, and please ping us when you publish the follow-up so we can republish.
Here’s my next blog entry. It might not have as wide an appeal, as it’s specifically about American 401(k) retirement plans:
http://www.geo.coop/blog/some-401k-caveats
…and here’s my suggestion for a truly cooperative retirement plan:
http://www.geo.coop/blog/envisioning-cooperative-retirement
Do UBI and JG have to be mutually exclusive? As can be seen even from the few comments above, both have different supporters, and I would say both camps have good reasons to support the one they do. Maybe we can have both, maybe like this…
Everyone has a UBI. It’s relatively low, but enough to survive, and to make crime unnecessary for survival. Then, for all who want a job, there is also a guaranteed job. It doesn’t have to be paid much, because it just has to bridge the gap between UBI and what people now talk about as a “living wage”. I can imagine many advantages for having both together, rather than just one or just the other.
Indeed, UBI is a double-edged sword.
On one hand, it can indeed alleviate numerous problems regarding sustenance and insecurity in current capitalist society and provide the people a means to fund themselves while pursuing their passions, innovating, researching, even organizing to change the society…
On the other hand it can easily neutralize the momentum that exists against the existing capitalist system which could bring meaningful change by satisfying basic necessities.
So its complicated…
People today have to think about their survival, how to pay bills next month, their children, their future, overworked, tired, without means. This hampers social movements, community organization, political initiatives to no end:
Protest all you want, do sit-ins, engage in activism – the establishment is aware that you cannot carry the momentum a few months, because citizens who took time off of their work or traveled far from their home cannot keep going for long. Eventually, responsibilities and financial reality will force them to go back to their home, their jobs and assume the routine again. Only ones who would be able to sustain any kind of initiative longer would be people who have means to do so, or students – and even then only to a certain degree. Moreover, people cannot even remain informed – there remains little incentive, even little energy to even read what’s happening in the world after 8-10~ hours of work in an office environment. Even being informed requires financial well being and security.
UBI would instantly fix these problems by securing sustenance and financing people.
But then, the initiative for people to engage in activism to change the economy and society into a more democratic, participatory one diminishes greatly.
Why should a young person who wants to be a famous professional gamer stop practicing and engage in activism or organization? Now that his/her financial situation is secure? Or, why should a musician who wants to make a big break engage in politics? Now he doesn’t even need to work a ~12 hour part time job to put food on his table…
In such an environment, the only people who are engaged in organizing, activism, politics could end up being people who are philosophically, ideologically or humanely motivated…
………
Then again it complicates even more – with UBI, now hundreds of millions of people become instant capital-holders. These people instantly become investors who can fund initiatives and projects. Especially coupled with ascendant concepts like Crowdfunding, this opens up countless possibilities.
Now hundreds of thousands of people would be able to fund research projects by forking our $5-10 monthly by funding researchers who don’t want to be beholden to private interests, financiers or government. Ambitious projects like Mars project could be funded not by luckily having people like Elon Musk, ready to risk their entire wealth to try for something far-fetched, but instead by millions of people who would not need to take existential risks with their life of their finances.
………
UBI could work if people who want to change the world are prepared when it comes. Ie, people like us. If we develop methodology to counter its ills and make use of its benefits, and if we are prepared to raise precise and sufficient awareness to encourage and empower people to act with their newly found freedom instead of falling into passivity, UBI can enable popular change in a way that was not possible before.