The universal living wage can help make this sad scene a thing of the past.
An idea is bubbling to the surface, at least among certain circles. It’s not a new idea, but it’s new for this generation, and it couldn’t be more timely. It’s the universal living wage. Also called the “basic income.” Sometimes referred to as “universal social security.” Here’s the concept: just give people money.
Who has tried a Universal Living Wage?
The proposal is simply that a government spend some of its largess just writing a check to each one of its citizens on a regular basis. This concept has been around a while, and, according to this article in De Correspondent, the ULW was very close being signed into law by Richard Nixon, at one point. Switzerland will vote on giving all of their citizens a regular paycheck just for being there sometime this year. The ULW has been tried experimentally, by governments and charities (see the linked article for details). Alaska currently writes a check to all of its citizens to share the revenue from its oil wealth.
Why have a Universal Living Wage?
There are two prongs here: practical reasons and philosophical reasons.
Practical reasons include lower crime rate (because people don’t need crime as a last resort), reduced homelessness, reduced medical costs (because people are better able to take care of themselves, and this alone would pay for a good chunk of the ULW), massive bottom-up economic stimulus, and, of course, the near elimination of poverty.
Philosophically, we have the wealth to do this, we just have an economic paradigm in which people are only given resources unless they work for (or luck into) them. This paradigm has stayed in place while machines replaced jobs, globalization multiplied the labor market several times over, and as our politics and banking systems have allowed the very rich to grow astronomically wealthier than the poor, middle class, and even the upper middle class.
Time for math!
Aww yeah. Math time. There are currently 314 million people in the United States. Let’s say that we decided to give all of them $500/month. That might not cover all of one’s basic expenses, but in most parts of the country, that gets you a cheap room and some groceries, if nothing else. The monthly cost would be $157 billion. The yearly cost would be $1,884 billion.
Yikes. That’s a lot. The U.S. budget is roughly twice that number, but of course, the budget does a lot more than just give people money.
HOWEVER, a lot of the budget does simply just give people money. That’s what social security is (mostly): giving old people money. Same with unemployment benefits and a host of other subsidies. In 2013, the U.S. spent $816 billion on Social Security for 58 million people. On average, those people are getting over twice our ULW handout, so we can remove them from the ULW calculation.
That brings us down to 256 million people, $128 billion/month, $1,536 billion a year. Still pricy, but better.
Now, at some point in here, you probably thought: does Bill Gates really need $500/month? No he doesn’t, and neither does your investment banker neighbor or your uncle who buys cars for fun. Here’s how we deal with that: everyone making under $50,000 gets the full $500. From there, the amount tapers at a perfectly even rate (exactly 1 percent of income) until it hits $0 when you make $100,000.
It’s hard to find exact data on this in terms of individuals, but in 2010, 22.8 million households were making over $100,000 and another 34.4 million were between $50-100,000.
This is going to get a little hand-wavy, because there will be some crossover with the social security numbers, and we want to avoid double counting. For the sake of expediency, let’s say that our income rules, plus other redundancies with social programs brings our annual ULW cost down to $1,300 billion. That’s probably high, but let’s go with it for now.
That would put our cost at twice that of the U.S. defense department, but, again, it would save billions in other areas, like healthcare and law enforcement, and the Universal Living Wage would be, bar none, the most powerful social program in the history of the United States.
In fact, a massive economic stimulus plus giant healthcare savings plus reduced crime plus the virtual end of poverty…$1.3 trillion is a bargain.
The U.S. is arguably the wealthiest nation in the history of the world, and millions of its citizens are starving. It’s time to start giving people money.