So, raise your hand if you’ve heard of the basic income before. OK, so a couple of you. Well, the idea behind the basic income is that each citizen will receive enough no-strings-attached guaranteed money to cover basic living expenses. And it’s an idea that has led to some interesting political bedfellows, recently.
So both former Labor leader, Andy Stern, and conservative intellectual, Charles Murray, have written books on the topic. Both the Cato Institute and the movement for Black Lives have endorsed the basic income, though from very different perspectives. And just last week, President Obama suggested that the basic income would be a part of our national conversation for the next two decades.
Now, I know what you’re thinking: what are you doing on stage, and why aren’t any of those people here that you just mentioned? The short answer is that I said, “Yes,” and they didn’t. But the longer answer is that I’m both a student and a beneficiary of public policy. I believe that the public policy has the power to transform lives, and I think that the basic income is one path forward to a more just future. So this idea is a little different from the others you’ve heard at the conference, because it’s not a new idea at all.
In fact, Thomas Paine first suggested a basic income as an economic right for every citizen, in 1792. In the 1960s, both Milton Friedman and Martin Luther King suggested a basic income to fight poverty here in the United States. And it almost became law in this country, under… Richard Nixon, of all people, in 1971. So I can see that a couple of you in the audience are thinking: “Free money for everyone, that is un-American,” right? You know, these people don’t need a check. They need to get a job, they need to make better choices. And if we give everyone a handout, it’s going to lead to a culture of dependency, and it’s going to lead to laziness and vice.
But social science research over the last couple of decades have shown that many of the ideas we have about poverty and the poor are dead wrong. Poor choices don’t lead to poverty: in fact, poverty can limit choices and lead to poor outcomes in surprising ways. One study shows that the effect of poverty on your decisions about your finances and your health and your job is equivalent to 13 lost IQ points. And the conditions that are associated with poverty, like violence, malnutrition, abuse, and pollution, can stunt brain development, particularly for young brains.
And so poverty is the cause and not the effect of poor choices. Programs that try to fight poverty by changing behavior won’t work. In fact, it’s just the opposite: Cash transfers are one way that we can expand choices and lead to better outcomes for families. I’ll give you an example from my own family. My mother Denise was born here, in Washington DC. She was the youngest of seven kids. And my grandmother struggled to provide the basics on a postal worker salary. And it was a cash transfer, an unexpected cash transfer in the form of social security survivor benefits that allowed my mother to go to college.
And she was the first person in our family to get a degree, right here at the University of the District of Columbia. And without that no-strings-attached cash transfer, both her choices and my own would look a lot different today. And it’s not just my own family: There have been studies across decades, and in many countries, that show that the basic income does not discourage work. In fact it encourages entrepreneurship, and allows people to continue their schooling. Recipients report better health outcomes, and better nutrition. And a randomized controlled trial conducted in Kenya and Uganda shows that there is no statistically significant increase in alcohol or tobacco consumption from a basic income.
So if the success of cash transfers are one reason to support the basic income, another reason is that employment, you know, the idea that you just need to get a job, that no longer is a guarantee to keep you out of poverty. A cash transfer allowed my mother to enter the middle class, but it was her job as a public school teacher that kept us in the middle class. And the story of the last three decades has been the slow disappearance of those jobs. Jobs that provide retirement benefits, paid time off, raises, periodically. In 1960, the three largest employers were GM, AT&T, and Ford. Places that provided good union jobs.
Today, three of the largest employers are Walmart, McDonalds and Yum! brands, places where workers struggle to make it past the poverty line. In Lawrence, Massachusetts, is a former factory town where I taught elementary school. The median family is $6,300 poorer than they were in 1980, largely because the jobs that have replaced factory jobs don’t pay nearly as well or offer as many benefits.
Now, more optimistic policymakers will say we’ve heard this all before, that in every previous era, new technology has led to more opportunities than it has displaced or destroyed. And to a certain extent that’s true. So if you are a Stagecoach driver, you could get a job driving a truck. But what about the horses? In 1900, there were over 21 million horses in the United States. By 1960, that number had dwindled to just over three million. Today, one Ford Focus can do the work of 160 horses, and thanks to the computing revolution, we have machines that can do the mental work of hundreds of human beings. Already there are algorithms that can outperform radiologists in discovering cancerous tumors.