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Episode Date: November 1, 2018

What if the government just gave everyone money? No strings attached. Crazier things have happened. Nixon even tried to implement such a program once. The Atlantic's Annie Lowrey explains how universal basic income could work. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Before we start the show, a note about another show. It's called Unerased. It's a new podcast about the history of conversion therapy in America. We're talking about trying to turn gay people straight. The show is from the boss, the don, the godfather of good podcasts, Jad Abumrad. He's the creator of Radiolab. The first episode features Garrett Conley, who you might know from his memoir, Boy Erased, which is a movie you can see soon. Unerased comes out tomorrow, but the trailer is out now. So look for it in your podcast app or on your machine. Subscribe and get ready for the show tomorrow.

Unerased. UBI. It's not an infection, it's free money. Universal basic income, giving money to every citizen, guaranteed income from the government. Something so nice sounding that it must be Scandinavian. There couldn't be anything more generous, right? Anything more welfare state. But this election season, we've seen UBI discussed in mainstream American politics. People like Cory Booker and Kamala Harris are seriously talking about this. What this would do is it would provide a kind of social insurance that we don't have. Annie Lowry writes for The Atlantic, and she's now written a book about universal basic income. It's called Give People Money. Right now, we have a social welfare system that sort of identifies people by circumstance and provides them with aid, depending on whether you qualify. Whereas

this is just a universal policy. How universal is it? Is it like the super rich get it? Is it like a two-year-old gets it? Where are the limits to a universal basic income or are there none? So people debate that. Some people say literally everybody should get it, including non-citizens. Some people say the only circumstance that would qualify you for it would be poverty and it would be somewhat smaller. So Richard Nixon was really into that idea of all people. How into it was Nixon? Super into it. So, you know, Nixon was coming after not just the New Deal and the Great Society,

but the War on Poverty. Okay. And so in his 1971 State of the Union address, he said, Let us place a floor under the income of every family with children in America. And without those demeaning, soul-stifling affronts to human dignity that so blight the lives of welfare children today. So they ran these trials. And in this kind of amazing historical wrinkle, two of the guys who were involved in running the trials were Donald Rumsfeld and Dick Cheney. Wow. Rumsfeld, Nixon, and Cheney.

Yeah, exactly. These guaranteed income trials, the two biggest of which were in Seattle and Denver. So those experiments are then called Simon-Dyme, the Seattle Income Maintenance Experiment, the Denver Income Maintenance Experiment. And they basically said through the tax code, you know, if you showed up and you either didn't file a tax return or your tax return showed that you made like $300 in a year or something like that, that the government would just boost you up so that you got above the poverty line. And Nixon was really into this. It was on its path to becoming policy and a few things derailed it. One of which was the concern that if you provided this income maintenance that it would increase divorce rates because women would be more financially capable of leaving their partners. Damn. So it wasn't that progressive back then. Yeah, there were other issues.

Okay, fair. What's the poverty line now? For one person, it's about $11,000 a year. Okay. And you propose a very specific amount of money as like a thought experiment, right? Yeah, as a thought experiment. So everyone gets $1,000 a month, $12,000 a year. Yep. Does that mean that we no longer have what the government qualifies as poverty anymore? So pretty much, yeah.

You can end poverty really, really effectively with cash grants. Huh. So $1,000 a month sticking with the experiment, how much would that cost the federal government to give everyone, be it, I mean, I know there are variables. Yeah. Absent any other changes, just the back of the envelope math is like $3.5 trillion. Okay.

A lot. So a ton of money. Tons of money. That's almost as much as the government spends right now. So think about it. So Social Security is a super expensive program. It costs like $800 or $900 billion a year. Okay. So not even a trillion. Yeah. And this is three and a half-ish trillion.

So much money. So much money. So much money. And does that make this like not but a pipe dream or is that just the reality that would have to be considered? Is that something that Nixon considered? Yeah. So Nixon, because he was aiming it as a guarantee, right? So if you made above a certain level, you didn't get anything. That made that policy a lot cheaper.

And so we know to eliminate poverty through the tax code, it's actually really cheap. It's like $200 or $400 billion a year. It would be easy for the government to manage to find that money, either by reallocating it from other programs or raising taxes for it, or just, you know, charging it to our large deficit. You know, you can start subtracting things. In that world, I think it probably wouldn't make sense to have Social Security also, to have the food stamp program also. So you'd probably strip a lot of other programs out. Still be quite pricey, you know, even after doing that. And so then the question is, okay, do you want to make it so that you're providing more to lower income people and less to upper income people? And what taxes might you want to raise? With the cost being sort of so comically high, I'm guessing that makes it a tough sell.

What other arguments against it are out there? So the cost is a really big one. The second is that if you're giving everybody the same thing, that doesn't necessarily make sense, especially in a high inequality context. Other arguments, people worry that people stop working. Even on $12,000 a year or something like that? Yeah, we do know that even pretty big cash payments don't really cause people to necessarily drop out of the labor force. They do reduce work effort. And, you know, that tends to happen among parents with kids and other caretakers, students who choose to stay in school for longer, young people who stay in school for longer,

and older people who kind of step back or retire earlier, which is why you see so much retirement right around that Social Security retirement age. But if people stop working as much for socially beneficial reasons, and if they have more insurance that they don't have to work at these terrible, miserably compensated, dangerous, degrading jobs, I'm just not sure that that's such a bad thing. But it is an argument that people bring up when it comes to UBI. Who are the biggest supporters of UBI, of universal basic income? Does it have advocates right now?

Absolutely. You know, I think you see the strongest support from Silicon Valley where they're really worried about AI automating away all the jobs and there just being huge amounts of unemployment and restlessness and violence. There's these really frightening studies. And they basically say that even if you have like a pretty schmancy white collar job, if there are tasks in your job that can be automated, AI is coming for them. And what will we do if this prosperity isn't shared? Because I always think it's worth noting, like, in the event that AI and automation, like, radically changes how we work and how businesses work, in some sense, that would be awesome, right? You have all this wealth generated, lives change, lives get better. But I think that there's this fear that at the same time, it will make a lot of people's lives worse. Yeah. I mean, can $12,000 a year really make up for the fact that, let's say, there won't be any manufacturing jobs or there won't be any accounting jobs, something like that?

No. You know, if you took like a truck driver or an accountant or a legal assistant who was making $60,000 a year and told them that instead they would get $12,000 a year in a check from the government and there's no job for them, like that's a really dystopic world. But, you know, say in our imaginary sort of Jetsons world in which Elon Musk has like found the singularity and there's no more jobs. What if, you know, you qualified as a carer and your job was to take care of your parents? And then like there was somebody else who, you know, was paid to stay in school for a long time and was doing really avant-garde scientific research., again, there's going to be stuff to do. It's just maybe it won't be the kind of standard retail,

food service, healthcare, big drivers of employment right now. If this universal basic income stuff sounds like pie in the sky to you, great news. A bunch of places have actually tried this. That's next. Guys, it's November 1st, which means we're just one day away from Viper Club being nationwide in theaters. It's still in New York and Los Angeles as of right now.

And if you're close to those cities or are willing to travel, you can see Viper Club. If you are not, tomorrow is your first real opportunity. Viper Club, it stars Susan Sarandon. She's a mother trying to get back her journalist son who has been kidnapped by terrorists. The government's not really helping, so she turns to other clandestine sources for help. Journalists, philanthropists, they help her with money, resources. Viper Club. Tomorrow.

Nationwide. Thanks for listening. with money, resources, Viper Club, tomorrow, nationwide. Thanks for listening. If universal basic income sounds like the kind of thing you'd find in a place like, I don't know, Canada? Well, you're right. The province of Ontario is doing a test run right now. Jessie Gollum is getting that sweet free government cash. I honestly saw an article for it on CBC, which is our Canadian broadcasting news source. So they had an article up and they were encouraging people to sign up. I attended an information session, and then after that I signed up,

and it was very random. So of the people who signed up, people were put into two control groups. You would either receive basic income or you wouldn't receive basic income, but both control groups would be required to fill out surveys regarding their quality of life. No surprises. Jessie says her quality of life improved. She went from working four part-time jobs to focusing on her passion. Basic income bought me that time so I could drop down to two jobs and focus on developing my role at Photographers Without Borders.

Also, I was able to expand my capacity and develop my own business as a freelance photographer. It felt like a huge stress relief had just been lifted from my shoulders. And one of my first thoughts was, I can pay my rent now. My rent is covered. No matter what, I'll be able to afford my rent. This experiment of basic income in Ontario, Canada, was supposed to last for three years.

So, Jesse started making plans. But then there was an election. I was very nervous because the conservative government was gaining some popularity. And I thought that if anybody's going to cancel the pilot, it's going to be them. And sure enough, the conservatives won. And they almost immediately shut the whole thing down. Jesse's got a few months left of basic income and then she's on her own again.

But there are other places where basic income is still getting a shot. There's something called the Give Directly pilot that started out in Kenya. Yeah, it's actually really close to Barack Obama's ancestral home in Western Kenya. Once again, Annie Lowry. And now all over Kenya, also Uganda.

And everybody there has a cell phone. It's like totally saturated with kind of like cheap Nokias. And Kenyans and Ugandans do their banking through these little shacks, green M-Pesa, Safaricom shacks. And so what happens is they'll distribute the money on the cell phone. You just have to go to one of these little roadside stands to pick it up. Yeah. And then you can use it on whatever you want.

And that's $20. $20. Yeah. Roughly a month. You know, and there people are living in extreme poverty as defined by the World Bank. So less than $2 a day. Okay. And they use the money to, you know to get better food, to smooth their consumption. So

a lot of times an issue there is that maybe you'll have enough food one week, but you'll have nothing another. And so that helps to invest in things like upgrading their roofs. So a lot of them have thatched roofs and they really look forward to being able to purchase a tin roof, which is expensive, but means that you won't get wet. When it's raining, it's a much more sustainable thing. And buying really, really basic things, radios, shoes, more access to health care when they need it. And a lot of them also invest in income generating assets, which in the context of rural Kenya means like a goat. And that's really good for people. Really, really good for people. And, you know, climate change is an issue in the

place that we saw. And so providing any form of insurance and security for folks who are so very low income is really great. And so that's being studied to see how, you know, if there's other downwind changes, right? Does it increase school enrollment? Does it affect people's health? In what ways? So that's a really exciting pilot project that's going to be going on for a decade. So bringing it on home then. Yeah. Are there any American cities that are trying this? And how would it work here? There are. The city of Stockton, which is in California, kind of a couple hours from the Bay Area, very economically distressed, has had a lot of issues. It has a very young, very progressive, very policy aggressive mayor named Michael Tubbs who raised some financing to provide a randomized set of Stockton residents, $500, I think a month. And so then they're going to follow and see how people do.

And it's interesting, it's coming in a state, you know, California is pretty generous with programs like food stamps, cash welfare, TANF, Medicaid and Medicare coverage. But nevertheless, you know, there's a number of communities that have been distressed and haven't been able to turn around there. And so the idea here is to say, like, OK, like, what if we give people, you know, this this this freedom? How do they spend the money? And to sort of start making an argument for for this perhaps becoming a bigger policy in the U.S. So we know people like Kamala Harris and Cory Booker are open to free money. How about other more establishment Democrats? Has the Overton window not shifted quite that far yet? Yeah, it's going there fast. Barack Hussein Obama

has said that he likes the idea of a UBI as part of a changing economy as a kind of... Like he said it when he was president or he said it since? No, he said it when he was speaking at Nelson Mandela's 100th birthday. So we're going to have to consider new ways of thinking about these problems, like a universal income, review of our work week, how we retrain our young people, how we make everybody an entrepreneur at some level. But we're going to have to worry about economics if we want to get democracy back on track. You know, you've seen Hillary Clinton suggest that she thought the idea of, you know,

basically kind of creating a wealth fund and using it to fund cash transfers. And her book, What Happened?, she says that they looked at this. And so, you know, you've seen obviously this tremendous flourishing of social democratic, sort of further left policy among the 2020 contenders. And I would not be surprised if there wasn't at least an effort to pilot UBI or to provide a cash transfer program. It's funny how like the emotions of the American political ideology go because this started as something that Richard that richard nixon endorsed in the 70s and is now liberal hero richard and now in 2018 like the most left politicians on our federal stage are considering it yeah is it a ludicrous question to even ask is anyone on the right for it

yeah so not politicians really there are a lot of like kind of think tank type people on the right for it? Yeah. So not politicians, really. There are a lot of like kind of think tank type people on the right who are really into this idea. There are a lot of think tank people on the right who are really into making programs less paternalistic. That's like a big libertarian idea. The government shouldn't be telling you that you have to spend your food stamp money on this, but like, God forbid you buy a, you know, a bag of pretzels or something, right? Like they hate that nanny statism, but it's probably worth noting that Republicans right now are like going heavily in the opposite direction. They're remaking Medicaid and then they're taking our safety net and they're making it more contingent on work, more difficult to use.

And so the clearest way to see this is that, you know, we've never had work requirements in Medicaid before. But there's a number of states that the Trump administration is saying, like, go ahead and attach them. And I think that more states might follow. So this still sounds like a bit of a utopian fantasy for the United States of America. Yeah, I think the full fat version is a great thing to be thinking and talking about. But I think there's a lot of more marginal policies that could be excellent for working families and the poor that wouldn't frighten people. So expanding the earned income tax credit, creating a negative income tax to eliminate poverty, having a cash grant for kids, which most other OECD countries do and is really good for them, those kind of things.

I also would love to see an effort to just make programs easier to use, more automatic, simpler, right? Like you can use your food stamps on whatever you want. Like food stamps could just be cash. The same thing with TANF. It could just be a cash grant for poor moms. That would be a lot more effective and a lot less paternalistic. You know, UBI can't, it's not a silver bullet. It doesn't fix all problems. You still want a government that's investing in physical infrastructure and human capital, right?

But there's this way in which a primary problem for just millions of families is a lack of cash. And so, you know, doing that, whether it's through UBI or through the tax code or through any of a million different options, I think will become a lot more pressing. Annie Lowry writes about economic policy at the Atlantic. She's the author of Give People Money. It's a book about the things we just spoke about. And full disclosure, Annie Lowry is married to a guy named Ezra Klein, who works at a company called Vox.

I'm Sean Ramos for him. This is Today Explained. Dylan Matthews, the host of Vox's new podcast, Future Perfect. It's Day of the Dead today, and I'm hearing that on a future episode of Future Perfect, you kill a fish. We kill multiple fish, and it was hard for me since I'm a vegetarian and very squeamish about such things. Okay, but you did it for science, for podcasts? I did it for science, and I did it for content. So my producer, Bird Pinkerton, and I wanted to learn about something called Ikejime. It's a way to kill fish. It's the typical way that sushi fish are killed.

And instead of leaving a fish out on the deck of a boat where they slowly suffocate to death pretty painfully, Ikejime, you just stab them in the skull and they die instantly. And we should say the reason you're doing this is because the unifying theme of your show is something called effective altruism, which is using our knowledge and our data to make the world less crappy for people. And in this case, fish. And yeah, we killed a few fish on way to making a better fish world. Beautiful.

Future Perfect, wherever you find your podcasts.