What is universal basic income?

Brut America

Many believe a universal basic income could bring economic security for everyone amid the coronavirus pandemic — and beyond. How exactly does it work?

Transcript

00:00We need to provide a direct emergency $2,000 cash payment

00:06to every household in America every month

00:08for the duration of the crisis.

00:10Now is the time for action to provide direct assistance

00:14and emergency relief to every single American

00:17through a universal basic payment of $1,000 a month

00:21to every American for the duration of this crisis.

00:24A large share of Americans wouldn't be able to pay

00:27for $400 or $500 in an emergency.

00:30So now they are out of a job or on forced reduced hours.

00:34This is a major, major shock for many low-income people

00:38and with a sizable universal basic income,

00:41they wouldn't have to worry about their everyday needs.

00:45You know, just being able to shop for groceries

00:48and satisfy their everyday needs.

00:51A universal basic income is an amount of cash

00:54given to everybody within a geographic area

00:56like a country or a city or a state.

00:59And there are no conditions to receiving this cash.

01:02So you don't have to do anything.

01:04Everybody qualifies.

01:05The purpose of a universal basic income

01:07is to provide a direct relief to every single American

01:10for the duration of this crisis.

01:12And this is a major, major shock for many low-income people.

01:16You know, just being able to shop for groceries

01:19and satisfy their everyday needs.

01:21And the purpose of a universal basic income

01:23is to ensure economic security for all.

01:27Everybody receives it.

01:28So nobody's gonna fall through the cracks.

01:30And because it is cash, everybody can spend it

01:34however they see fit in whichever way best serves them.

01:38Today with the coronavirus,

01:39this is another example of a shock

01:41that where people are deprived of income all of a sudden

01:45and the U.S. social safety net being so limited,

01:49it's something like a basic income

01:50that legislators decided to give people

01:53in the short run in the U.S.

01:55You know, I'm standing for this very

01:57dramatic seeming proposal

01:59that every American gets $1,000 a month

02:01starting at age 18 until the day you die.

02:03And yes, it does stack on top of social security.

02:06♪♪

02:14The more you put all sorts of conditions

02:16to receipt of cash assistance

02:18and people have to jump through hoops,

02:20they have to fill all sorts of forms.

02:22And that means that even people who on paper might qualify

02:25may not receive the cash that they qualify for.

02:29So in terms of universality,

02:30really the UBI makes sure you're not missing anybody.

02:32You're really making sure that everybody

02:34has an income to count on.

02:36So a universal basic income is not designed

02:39to replace work or replace anything for that matter.

02:42The key with the basic income is the freedom aspect.

02:45So because everybody receives it,

02:47no matter what, that means people can choose

02:50to work or not to work.

02:53They can choose different activities,

02:54whatever they see fit.

02:55So it's not designed to replace work.

02:57There are many different schemes,

03:00but the commonality is that

03:01there are different kinds of taxes.

03:03So, you know, Andrew Yang,

03:05one of his main things was to have a sales tax

03:08or value added tax.

03:09So that's one way you could expand the income tax.

03:12You could, like Elizabeth Warren proposed,

03:14put a wealth tax and that could also contribute

03:16to finance it.

03:18You could use a carbon tax or a broader tax

03:21on environmental damages to finance it.

03:24So there's many avenues,

03:25but the commonality is that it's a tax.

03:27And all of the taxes I mentioned to various degrees

03:30will disproportionately fall on richer people.

03:33What is the future of the UBI?

03:39It can be dated in its more modern form

03:41to at least the 18th century with Thomas Paine.

03:44And ever since there's been many different versions

03:48that have been supported by various people,

03:50including Martin Luther King,

03:52including libertarian economists like Milton Friedman.

03:56So there are many, very many different kinds of backers

04:01of the basic income.

04:02So the universal basic income has become much more popular,

04:06especially in the U.S. recently,

04:08in the past 10 years or so,

04:10because there is a growing concern

04:14that the U.S. social safety net is not strong enough.

04:17So this would allow, for example,

04:19but just among many other things,

04:21to address potential job loss

04:24that could occur under a bunch of circumstances,

04:27including technology.

04:29So if robots advances in robotics

04:32and artificial intelligence were to destroy many jobs,

04:36then this basic income could serve potentially

04:39to smooth the transition

04:41and make sure that everybody has money to live on.

04:53A guaranteed income for people,

04:55is that worthy of attention now?

04:57Perhaps so.

05:11Welfare, there's like requirements, like for example,

05:15and my mom was on welfare for the first five,

05:17six years of my life.

05:18And you'll get food stamps, but that's not cash.

05:22And maybe food's not the biggest need,

05:24because you could go over a family member's house seat

05:26or a friend's house seat, et cetera, et cetera.

05:28But maybe paying the car notice,

05:29or maybe paying gas, et cetera, et cetera.

05:31So there's a lot of things that you can do

05:33to make sure that people have a guaranteed income.

05:36So I think that's a big part of it.

05:39But maybe paying the car notice,

05:40or maybe paying gases, or maybe paying this or that is.

05:43So this gives people more agency

05:45to kind of make the best decision

05:47as to which needs should be prioritized for the family.

05:50What the research has shown is that

05:53this kind of additional spending for poor families

05:56makes a huge difference.

05:58And what the research shows is that this cash transfers,

06:01when people receive a UBI,

06:04it really improves health as well as education.

06:09And that's really concentrated

06:10on the most disadvantaged children.

06:13So these kinds of transfers really help the next generation

06:17to be lifted out of poverty

06:19by improving what we economists call human capital.

06:22So higher education, better health.

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