If New York actually elects Andrew Yang mayor, it will rival Trump as the all-time politics as lulz from voters who WANT SOMETHING DIFFERENT! One can argue this is the fault of the established political parties but on the other hand, voters are mostly idiots who don’t pay the first bit of attention until the end of the race and they want something fun and entertaining. Thus, Yang.
The thing though is that Yang is a complete clown, a guy who knows nothing about anything but because he comes out of the tech world, thinks he knows everything and even worse because he comes out of the tech world other people think he knows everything too!
Yang’s signature policy of Universal Basic Income is one that appeals very strongly to a few different groups of people–centrist types who want politics without politics, leftists who hate the idea of work and work culture in America, and some libertarians who want to use as a way to gut social programs that fund the poor. But it doesn’t make a damn bit of sense on the face of it. As Krugman points out here, the problem is two fold. First, UBI is tremendously expensive. Second, even high-end UBI proposals wouldn’t give people nearly enough money to live on.
But even if we don’t think Yang is right about the problem, what about his solution? Is his universal basic income proposal a good idea?
No, it isn’t. It’s both too expensive to be sustainable without a very large tax increase and inadequate for Americans who really need help. I’ve done the math.
First, we really would be talking about a lot of money. The recently enacted American Rescue Plan gave most adults a one-time $1,400 payment, at a cost of $411 billion. These payments make some sense given the lingering economic effects of the pandemic, although other components of the plan, especially enhanced unemployment benefits, are playing a more crucial role in limiting financial misery.
But the Yang proposal to pay $12,000 a year would cost more than eight times as much every year — well over $3 trillion a year, in perpetuity. Even if you aren’t much worried about either debt or inflationary overheating right now (which I’m not), you have to think that sustained spending at that rate would both cause problems and conflict with other priorities, from infrastructure to child care.
Yet these payments would also be grossly inadequate for Americans who actually did lose their jobs, whether to automation or something else. The median full-time worker in the United States currently earns about $1,000 per week.
The point is that for now, at least, the best way to provide an adequate safety net is to make aid conditional. We can and should provide generous aid to the unemployed; we can and should provide aid to families with children. But sending checks to everyone, every month, is just too poorly focused on the real problems.
Now, one can imagine a world in which Yangism would be right. If robots actually were taking all the good jobs and inducing a huge shift of income from labor to capital, it might make sense to offer big universal payments, financed with big new taxes on wealth and capital income. But we’re not currently in that world.
Unlike Krugman, I do think that automation is a serious issue on the horizon, though perhaps less so than I thought a few years ago as the self-driving vehicle mania hasn’t really gone anywhere. But there are people whose jobs it is to figure out ways to eliminate jobs entirely. Regardless however of whether automation is a serious problem in creating unemployment in the future or not, I support the federal job guarantee over UBI for a few reasons, including the math that Krugman discusses here.
We’ve seen in the pandemic that just giving people money can be a good thing. At this time, it was absolutely necessary and it saved a lot of people from destitute. That’s great. It’s also not exactly a long-term sustainable policy to be expanded upon. There’s actually a lot of ways to give people money and occasional checks can be part of that. But your program does actually have to have a way for people to live and Yang’s does not.