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How Covid-19 is Exposing the Need for Universal Basic Income

why Universal Basic Income (UBI) is rapidly growing in political support.


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Erik Uebelacker

3 years ago | 6 min read

Even as stores and restaurants begin to reopen, millions of Americans are still facing financial crises due to the Coronavirus pandemic. Over 30 million citizens are unemployed, and as many states continue to increase in new cases, it would appear that the pandemic is far from over.

The federal government has responded to this economic crisis with the expansion of unemployment benefits and a one-time stimulus check of $1,200 for every American adult with an income of under $75,000, both of which were part of the CARES Act passed back in late March. Unfortunately, the execution of both programs has been lackluster at best.

The expansion of unemployment benefits most notably included a $600 weekly bonus for those in the program. While economic stimulus is certainly required in a time like this, its attachment to state unemployment benefits disincentives returning to work for Americans who qualify.

The expanded benefits saw many hourly or part-time workers earning more from unemployment than they would from their jobs. Yet, for many full-time workers, the program is unable to suffice as a replacement for their salary.

On the other hand, the federal government spent millions on administrative work to determine who meets the threshold for the $1,200 stimulus check. The process was so laborious that even now, almost three whole months after the CARES Act was passed, many Americans are still waiting for their payment.

Furthermore, the stimulus check left out a massive group of economically insecure citizens: college students, as many of them file their tax returns as dependents.

Even if you are one of the lucky ones who both qualified for the $1,200 stimulus and received your payment, that sum of money is simply insufficient for many Americans who may have been furloughed or lost work hours.

An April survey from OnePoll showed that 82% of people think that the one-time $1,200 stimulus check is not enough to cover their expenses during this pandemic.

2020 Presidential Candidate Andrew Yang. Win McNamee / Getty Images

Given the current state of affairs, it’s no wonder why Universal Basic Income (UBI) is rapidly growing in political support. Once a fringe policy idea, the UBI conversation was rekindled during the 2020 Democratic presidential primary, where candidate Andrew Yang made a $1000-per-month basic income the centerpiece for his campaign.

Yang argued that a UBI of this caliber would be necessary in order to combat job loss due to automation.

In most states, Yang consistently polled in single digits, and suspended his campaign in February after the New Hampshire primaries.

However, support for UBI is still growing, especially during this global health crisis. An April poll from Data For Progress showed that 66% of Americans support a monthly cash relief program over a one-time stimulus check.

Even members of Congress have taken note at UBI’s growing popularity. Senators Bernie Sanders, Kamala Harris, and Ed Markey introduced a bill back in May that would deliver $2,000 per month to every American adult and child for the remainder of the pandemic.

Rep. Tim Ryan of Ohio proposed a similar bill the month prior, but as of right now, neither look on their way to becoming law.

For a growing number of Americans, a Universal Basic Income is looking like the best way to recover from the economic damage caused by Covid-19.

The U.S. has already hit record unemployment during this time, and up to 42% of the jobs lost during this crisis are set to possibly never return. A major economic stimulus is required so that businesses can survive once they reopen, and so those still unemployed will have a financial safety net for the remainder of this crisis.

“We have a once-in-a-generation event that will have a once-in-a-generation massive impact. Anyone who can think that long term is already thinking about the recession that comes after Covid,” says Aoife Hegarty, member of Basic Income Earth Network’s (BIEN’s) executive committee.

Hegarty and other UBI advocates argue that a basic income during the pandemic would greatly ease us into the recession that is bound to follow.

Families would have more money to spend on the things they need, directly benefiting the businesses that have been closed for so long due to Coronavirus.

Additionally, a basic income, by definition, is not tied to one’s employment status. Therefore, citizens would not be financially punished for returning to work once their place of business reopens.

This is not the case with our current system of unemployment benefits, which has seen many furloughed Americans refuse to return to work since they would, in many cases, earn less by working than by staying at home on unemployment.

Considering the health risks posed by Covid-19, who can blame them for this choice? Giving Americans a UBI would provide meaningful, reoccurring economic stimulus to every citizen, without penalizing them by retracting the benefit once they return to the workplace.

Not to mention, the universality of a UBI could save the United States government both time and money. The reason many Americans still have never received their $1,200 stimulus check is due to the lengthy administrative process the federal government had to go through in order to distribute them.

The distribution of a stimulus check could have been done far quicker and for far cheaper had the check gone to every citizen for the same amount of money.

While a UBI could certainly help America in its quest to “return to normalcy,” we need to stop pretending that this “normal” is perfect.

The economic fallout caused by Covid-19 could have been far less detrimental had the economy been working for most Americans in the first place. UBI could potentially help here, too, even after the pandemic is over.

The unfortunate reality is that work is becoming more and more insecure. Despite a consistently falling unemployment percentage in the last decade (until recently, of course), a majority of new jobs created in the past 10 years have been temporary gigs or part-time work.

According to Alan Krueger, economist at Princeton University, 94% of net job growth since 2005 has been in the “alternative work” category. This category includes freelancers, part-time workers, temp workers, and independent contractors.

“We’re seeing work get a lot more insecure,” Aoife Hegarty of BIEN explains. “So this gig economy that is growing up, in fact, pushes the uncertainty down onto the layer of society that can cope with it least.”

NORC / University of Chicago

Considering 78% of Americans live paycheck to paycheck, it’s safe to say that this economic uncertainty, as Hegarty puts it, affects many people. The unemployment rate does not accurately reflect those trapped in this growing American gig economy.

Universal Basic Income could be a valuable lifeline as work becomes more and more insecure. Workers could still have a safety net if they move from job to job, and would have more bargaining power to fight for better pay and working conditions. More Americans would be able to take the risk of opening a business, while existing businesses would benefit from citizens’ increased buying power.

In fact, data from Finland’s basic income trial indicated that entrepreneurial activity increased, as freelancers gained more economic opportunity. Other participants got more involved with their community, now able to do volunteer work or care for a loved one.

Perhaps most importantly, basic income has overwhelmingly positive effects on mental health. This might not be a surprise considering money is the №1 source of stress for Americans. Even so, data from Finland’s trial showed that those receiving basic income experienced less depression and mental strain, with healthier overall mental well-being than the control group.

Results from early UBI trials such as Finland’s certainly look promising. However, more data is critically needed in order to determine if such a system is truly the answer to economic inequality and our insecure job market.

With that being said, the severe damage that Covid-19 has caused to the U.S. economy cannot simply be fixed with a one-time $1,200 check for some Americans. Implementing a Universal Basic Income for the remainder of the crisis would be an asset to businesses and customers, alike. Not to mention it could provide economic security, a luxury enjoyed by very few at the moment, to millions of Americans.


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