This week’s guest is Chris Hughes, cofounder of Facebook and the Economic Security Project, and author of the recently released book Fair Shot: Rethinking Inequality and How We Earn. Chris discusses how he came to recognize the power of cash transfers, and his experience going from growing up in a low-income family to becoming very wealthy through Facebook. He also lays out his plan to provide financial security to every working American.
How would universal basic income impact the economy? The Roosevelt Institute has done numerous analyses on how unconditional cash transfers could affect the economy at various levels and program designs. Rakeen Mabud, Program Director of the Roosevelt Institute, joins the podcast to discuss these analyses and what they mean for the wider basic income conversation.
Two weeks ago at the annual California Democratic Convention, the party adopted a new platform that includes universal basic income as a policy it supports. Rocky Fernandez, Region 5 Director for the CA Democratic Party, joins the Basic Income Podcast to discuss how this happened and what it means for basic income in California.
Basic income made headlines last week with a proposal by the Royal Society of Arts (RSA) to create a United Kingdom Opportunity Fund, which would pay unconditional cash to all British residents under 55. Anthony Painter, Director of the RSA Action and Research Center, joined Jim and Owen to discuss the proposal and the state of politics around basic income in the UK.
Jim interviews Sandra Haynes, winner of “Into the Black”, a speculative fiction contest on basic income, held by the Economic Security Project. Sandra’s story imagines an Artificial Intelligence created to study emotions of people using bank ATMs, which becomes conscious while trying to determine why it keeps seeing people cry. We hear about what inspired this story, Sandra’s thoughts on basic income, and a little bit of the story itself.
Basic income advocates often talk about what a transformative impact universal basic income could have on society — but what issues and challenges will it actually solve? Jim and Owen share their thoughts on whether basic income is the solution to poverty, automation, wealth inequality, and more.
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Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh. We are here with you today with a discussion episode.
Owen: So, we’re going to be going through a number of different high-level issues and asking ourselves and each other “does basic income solve that issue?”
Jim: I think this is something that we touch on often in conversations on basic income, covering what areas basic income might make a big difference in peoples lives, but Owen and I were talking and really thinking that there hasn’t been a clear discussion on, for specific areas: Is basic income actually the answer to this problem? Is it not the answer? Is it part of the answer? And so, we thought it could be good to just really talk that through in a number of different directions.
Owen: So, let’s jump in. First one. Jim, would you say basic income solves poverty?
Jim: I would say partially. What about you?
Owen: I said yes. Alright, you go ahead. [laughing]
Jim: The reason I would say partially is that I, when talking to people, I typically say, basic income solves absolute poverty. This idea that, I mean there are people out there who are in destitution, who can’t afford their basic needs, and that if they were getting unconditional cash every month, they could. And so, in that respect, yes.
The reason I said partially is because if you’re talking about actually eradicating poverty, I do think there’s more to it than just making sure that people can cover their needs on an ongoing basis. If you look at social work and what it means to have a pathway out of poverty, there are more steps to that. There’s understanding the language of the middle class. A great book that was recommended to me recently is “Bridges out of Poverty,” and it actually talks about some of the barriers that we don’t even realize are there a lot of the time.
And so, I think that I see basic income providing that floor, which is a necessary step to get out of poverty and to keep people from falling into destitution. But I actually think we will need more than that if we want to have everyone fully included in the economy.
Owen: Yeah, I guess I was thinking partly just on a strict definitional level. If you can get above the poverty line, you are technically out of poverty. But, going a little bit further than that, the sorts of effects you see with cash transfer programs are the resolving of the symptoms of poverty. People have better educational outcomes, better healthcare outcomes. So that starts to convince me that the problem is lack of cash and when you provide cash then, maybe not all your problems are solved, but the damage done by poverty itself starts to heal up.
Jim: Yeah, I think that’s a good point, and an important thing to note is, if we’re talking about multi-generational effects, then maybe basic income does solve it. Because if you know the children are growing up with enough money to cover basic needs, maybe that could be enough to break the cycle of intergenerational poverty on its own.
Owen: Yeah. And you do see some positive effects on long-term earnings just with some cash transfers, some cash stipends.
Jim: Alright. So next up on the list is wealth inequality. Owen, what say you?
Owen: I said it takes a little of the edge off, but no.
Jim: I also said no.
Owen: Yeah. What I mean by that is basically it helps deal with the lowest ends of poverty but unless you’re just doing a truly aggressive Robin Hood-style taxation system, the rich are still going to be super rich. The poor are still going to be pretty poor.
Jim: I think something that gets missed sometimes, both among basic advocates thinking that suddenly all that will somehow go away, and I think it’s also a big concern that people who are skeptical of the policy have, is that if the proponents are adopting that more utopian perspective on what it will accomplish, that we may miss what else we need to do in order to deal with the other issues in society.
But, yeah, if you look at the situation we’re in, it is what? Eight people in the world have as much as the bottom half together? Giving everyone basic income in no way, shape, or form is actually going to have mostly equal amounts.
But, I said no, but I do think it’s worth pointing out that the more we can provide people a pathway to inclusion in society, the more opportunities that we can be granted. And so, even if we’re not directly addressing wealth inequality, maybe we can be increasing economic mobility, which means that more people have a chance to accumulate wealth over time.
Owen: Yeah, and if you start to think about, “ok, well, why is wealth inequality bad?” And, I’m not going to jump down that rabbit hole, but yeah, some of that starts to get a little better. And we usually don’t talk about the more utopian dreams of basic income where it’s not just $12,000, but $25,000, $30,000, something like that, $30,000 a year per person, which feels far enough down the future that its not even worth talking about, but that’s maybe where you would start to say “ok, this is starting to solve wealth inequality.” But we’re focused on 12 or even less right now.
Alright, Jim, how about automation?
Jim: I’m going to say “partially.” I honestly debated between “no” and “partially,” because I think, we’ve talked about this before, but if we actually end up in a situation where most jobs have been automated, and there really isn’t enough work for everyone, just giving people enough cash to survive is not, nowhere near a sufficient solution.
That, again, it makes sure that people don’t starve, but work has been so central to giving meaning to peoples’ lives that we actually need to think about what are some other changes to the way we approach our lives. And this doesn’t necessarily have to come from the policy world but, if we’re in that world, there’s a lot of rethinking we’re going to have to do, and basic income, I think, is necessary, but it won’t be sufficient.
Owen: Yeah. I’m in the same place. And even beyond just finding meaning in your life, if your making whatever — $60,000 a year — maybe driving a truck, to use the classic example, and your job gets automated away, and you have trouble finding work, but you’ve got $12,000 a year, you’re not living the same life. And especially, let’s say you’re in your fifties and your job goes away and you’re having a hard time finding a new job, now we’re talking about living on a basic income indefinitely, and the amounts we talk about just aren’t sufficient to solve the problem.
I think it’s something. It’s better than nothing. That’s why I said partial. Right now, you get six months of unemployment and then your kind of on your own. So, it’s better than that, but it’s certainly not everything.
Jim: Next up on the list, we had “problems with the social safety net”.
Owen: So, I said partial, and that’ll require some more explanation, but what were you thinking?
Jim: I said, it depends, but you go first.
Owen: Yeah. This might be similar answers here. So, first of all, what problems are we referring to with the social safety net? There are the issues surrounding bureaucracy where maybe some people who qualify for various means-tested benefits don’t end up receiving them because they don’t know that they qualify or maybe they chose not to fill out the paperwork, or they’re made uncomfortable by the paperwork. And, then the paperwork itself creates a ton of bureaucracy that is not particularly helpful to society beyond creating this filter where some people get benefits and some people don’t.
And, then there’s the issue that whenever your means testing, you’re probably leaving out some people who are needy in the same way but aren’t receiving those benefits. And also, for some, there’s a work disincentive. As you earn more money, the benefits phase out and so there’s an effective tax on your earnings, at least for a while.
So, does basic income solve those? It could, but if you are just eliminating all those other programs and replacing them with a basic income, you’re probably creating a lot more problems and probably hurting a lot of the people who do benefit from those programs. Because for all the issues with things like the Earned Income Tax Credit and anything else you could think of, unemployment insurance, they do keep a lot of people out of poverty. They do a lot of the things that basic income is good for. And those are the people who are most in need.
So, yes, on one level basic income doesn’t have those issues, but it is not targeted, and so it’s maybe creating other issues that those programs address.
Jim: The reason I said depends, and I think, yeah, we share a lot of perspectives on this. I think very much the type of basic income you enact is going to matter a great deal on this front. We’ve talked about this before, but if you actually were pursuing a basic income that got rid of all the programs that we had today and just gave people cash, then no, that definitely does not solve it and perhaps makes it even worse just because some people you may leave far worse off than they are today.
If instead you had a basic income in addition or as a supplement to what we have now, providing that universal floor that really acts as a backbone, and again, it won’t solve absolutely every problem, but that could make a world of difference as far as actually ensuring that people are getting the support they need beyond what exists today.
Owen: I’m totally with you on that. I do think there are programs we might eventually think about cashing out down the road if they’re proven to be pretty much redundant with the basic income. But, I would want to see the evidence for that in reality as opposed to just what we think.
Jim: Let’s not start a discussion on getting rid of the social safety net until we actually have something clearly better.
Owen: Yeah. Right. Ok. So, Jim, does basic income solve healthcare?
Jim: Big fat no for me on this.
Owen: Yeah. Same.
Jim: Yeah, I don’t see too many proposals for it out there, but there are some people who have talked about basic income as a replacement, not only for a lot of the general means-tested programs that we have today, but also for all government assistance on healthcare. And I think that would be pretty disastrous. Why don’t you share your thoughts?
Owen: I’m pretty much in the same spot there. If healthcare was something where it was like your rent or something, where you just needed to pay a little bit on a regular basis, and it was predictable, and then you were good, healthcare was solved. Then ok, that’s kind of what we’re talking about here. But obviously healthcare’s nothing like that. It’s something where maybe you have your annual check-up, but it comes in big, giant spurts when you actually need it, and its unexpected, and you can’t really plan for it beyond having insurance.
Jim: Yeah. My perspective is that we really should be aiming for a single-payer system. We see with Medicare today, that’s actually an incredibly efficient government program. The overhead costs on that are very, very low, far lower than private insurance, and it’s actually providing people with quality healthcare. So, we already know something that works well here. And we see examples in other countries of how effective that can be, so rather than trying to fit a square peg into a round hole with using unconditional cash for this, let’s actually go with what works.
Owen: Right. And part of the reason that it works as well as it does, Medicare-For-All type systems, or Medicare itself, is that you have more bargaining power if you are the government. If your negotiating prescription drug prices say, and you represent millions and millions of patients, that’s excellent bargaining power. Whereas the more segmented it is, the higher those prices go.
The last one we have on the list: “does basic income solve housing affordability?
Jim: So I said, in some places.
Owen: I didn’t write down a simple answer to this. I said, probably more than it gets credit for but, I guess partial would be my one-word answer.
Jim: I think my perspective on this ties back to what we were talking about last week or two weeks ago around the dangers of inflation on basic income. I think if you could enact a basic income and knew that housing costs are the same, then it doesn’t solve it completely, but it makes a big difference.
I think the trick with housing is that you end up with such odd geographical effects. We see this first-hand here in the Bay Area because the housing supply is so much more limited than the demand is for it, and so you end up with these exorbitant rents. And you could imagine, basically it’s distorting the market, and so with a distorted market, it’s hard to know exactly what will happen.
And so maybe we would have some weird effects where prices could go up significantly if people were getting a basic income, but based on the evidence from the study that was run in Mexico that we talked about previously, when you do have a market for goods, it seems like providing people with extra cash doesn’t cause inflation. So, anywhere where you actually had enough supply and demand on both sides, probably that extra cash is going to really make a difference for people.
Owen: Right. I think some people assume if everyone gets $1,000, landlords just like en masse raise the rent $1,000, and they just soak it all up. And, yeah, you could imagine situations where that could happen. But I think, it’s not like there’s a big, I don’t know of a landlord secret society where they can all collude like that.
And so, yeah, if you’ve got a good market, I think you’re ok. In a crazy distorted market like the one we’re in, in the Bay Area, I think the forces that are causing that distortion are a lot bigger, in some cases, than the basic income would be, and so in some markets around here, I don’t think you’d really see it.
I think you’d really have to watch for it in limited-supply, low-income housing, where the people providing those have a sense of how much money their tenants are taking in on a regular basis and would be able to adjust based on that. So, I think you would need kind of some parallel laws around protecting those renters.
Jim: Alright. That was everything that we decided to cover for this episode. One thing that came to mind as we were talking through this is a quote from my colleague Sandhya Anantharaman, the other Co-Director at the Universal Income Project. She had said at a conference recently that “basic income doesn’t solve every problem, but it makes every problem easier to solve.”
I think there’s a lot of truth to that. I think that so much of what we’re struggling with in society, you can trace back at least aspects of it that stem from people being in absolute poverty. And basic income really does make a difference there.
Owen: Yeah, and that’s what I find most heartening about the research that we’ve seen from various basic income studies. It isn’t just, you’re out of abject poverty, but everything else is the same. You do see a lot of improvement in a lot of other fields. And you also see it in our answers which were partial to almost everything. “No” on healthcare. I said “yes” to poverty, but it’s sort of a modulated “yes”. So yeah, having a little more money makes a lot of life a lot easier. But you still have your life. You still have your problems.
Alright, thank you for listening to the Basic Income Podcast! Please subscribe on Apple Podcast or the service of your choice. Also, if you could take the time to leave us a rating or a review that helps other people find the podcast as well.
Thank you to our producer, Erick Davidson, and we’ll see you next week.
What’s the latest with the basic income study piloted by Y Combinator Research? Jim and Owen sat down with Research Director Elizabeth Rhodes to find out. Rhodes shares insights from the initial pilot in Oakland and the much larger upcoming experiment. Rhodes details the goals and methods of these exciting, important studies.
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Owen: Hello, and welcome to the Basic Income Podcast! I’m Owen Poindexter.
Jim: And I’m Jim Pugh. One of the biggest developments in the last few years in the basic income space was the announcement by Y Combinator Research that they were going to run a pilot on the topic of basic income, to actually better understand what it looks like for people to receive unconditional cash. This happened just about two years ago now, and it really helped to kick off the conversation around basic income in the United States.
Owen: So, today, we’re very fortunate to have the person leading that effort at Y Combinator Research. So, welcome to the podcast, Elizabeth Rhodes.
Elizabeth: Thanks. It’s great to be here.
Owen: So, why don’t you start off by just telling us a little bit about your background as a researcher and how you came to Y Combinator Research?
Elizabeth: When I first heard about the job posting I was finishing up my dissertation at the University of Michigan. My background is in social work and political science, and I have been involved in poverty research both as a social worker and in terms of policy on the political science side.
I have worked a lot with the existing social safety net, both domestically and abroad, and pretty early in my graduate school time I did an independent study with a Professor and a colleague and we were sort of thinking outside the box on poverty, anti-poverty strategies, and we read, even it was actually Milton Friedman’s first discussion of the negative income tax. And, we sort of reconsidered what that might look like now. And that was my introduction to the topic.
I had definitely not heard of the movement for universal basic income. It was more just a guaranteed minimum income in more of the negative income tax model. So, we had written a paper on that and calculated what it would cost to implement a negative income tax now at different levels and different marginal tax rates.
So, I was really interested in the topic and then when I heard, someone forwarded around the political science department in Michigan, actually Sam Altman’s announcement that YC Research was looking to do a study and I jumped at the chance. It was no one else. And people would talk about the idea but no one else was really willing to take the risk and invest in this idea that is pushing the envelope I guess in a lot of ways.
Jim: Now, Y Combinator Research and the basic income project in particular, is a pretty new thing for Y Combinator, which is a start-up accelerator. So, can you tell us a bit more? What was the motivation here? What were the intended outcomes? What were the goals of this effort?
Elizabeth: So, Sam Altman who is the President of Y Combinator had, YC was established to promote innovation and a lot of that can happen in for-profit through start-ups, but there’s a lot of questions and societal level problems that shouldn’t be addressed. Either they shouldn’t, because no one company should develop this certain particular idea or have control of it, or they’re too long, they’re not suited for profit, and so that’s what gave him the original idea for YC Research.
And, the first group within that was Open AI which is seeking to develop generalized artificial intelligence in an open source, not for profit environment. And I think he began to then think about what other types of questions like that do we want to tackle and with Open AI and with what automation might lead to got him thinking about basic income.
He also talked about the YC model in some ways as a basic income for founders at the beginning of launching their start-up. So that’s where this particular idea came up. Right now, there’s a group of independent projects, working under the banner of YC Research.
Owen: So, given this general interest in basic income, how did you go about designing the project that you’re now working on to achieve those goals?
Elizabeth: So, it’s been a difficult and a long journey in a lot of ways because there’s so many questions that we have, and there is so much interest in basic income. And so I think we started at the most general questions, these really broad, like what would universal basic income look like? How will it affect people? And then we pulled together large groups of academics and policymakers and had these day long workshops and conferences talking about “well if we’re going to operationalize this into a study, like a very concrete study where we can ask very specific questions.”
You know there were a lot of decisions that had to be made at the onset. Things like, do we saturate an entire community, do a more geographically dispersed randomized controlled trial. And we just met with a lot of different people and talked about, you know, there’s not only financial concerns with the cost of such a project, there is the ethical concerns about, you know, you’re giving people a lot of money and you’re potentially changing not only individuals’ lives but the social context within communities and there were just a lot of things. You know, how does it work with the existing safety net and existing policy?
There’s been so much to think about and so I think it was really kind of a, I think people expected us to launch really fast, but there’s just been this process of figuring out what can we do? What other questions we can answer and refining slowly into coming up with a study design that we feel like we’ve landed on.
We believe that its definitely a foundational study. It’s not gonna answer all the questions we have about basic income, but it is going to provide a foundation about how this affects individuals moving forward and we hope that there’ll be a lot of exploratory outcomes thinking about helping identify areas for future research and hope to continue pushing the research agenda forward.
Jim: So, speaking of doing upfront legwork to make sure you’re properly prepared, you’ve actually approached this in multiple phases, and you’ve already been running a pilot program in Oakland where you are giving people cash in advance of a larger experiment. So, can you tell us a bit more what that pilot program was? Who was involved? What was happening with them? And what that experience was like?
Elizabeth: Sure. So, before we even started anything we actually talked with some of the people that ran the negative income tax experiments, which is the most recent version of something similar to this. This was back in the sixties and seventies, and they were really criticized for a lot of reasons.
So, we actually talked with them and said “ok, how do we not repeat the mistakes of the past?” And one of them was to make sure to run pilots, to test these things out. There was a big push then to just get started and you’re not able to think through all of the consequences, everybody makes mistakes. So, we decided to do several phases of a pilot actually because we realized we could iterate and learn as we go.
So, I guess it was a year ago in August, we launched a small feasibility study. It ran for one year. It had only six people, which gave us a chance to work very closely, and it was just, at this point, when I started, it was just me and one colleague. So, we were kind of working on everything ourselves.
Half of them received $1500 a month for the full year, and the other half received a smaller sum, a nominal amount of $50 to thank them for participating, and it was really interesting to watch. Obviously, we randomly selected these people from Oakland. They were all lower income residents and spent a lot of time with them. We didn’t know in a lot of ways what all the potential pitfalls were and so we were able to learn, they were really great and willing to share their data, so I think we learned a couple things from that. I’ll talk a little bit more about some of their experiences, but I think we learned a couple things.
We learned that it’s possible to do this. That people were willing to provide their data and share their stories. We can only learn if people are willing to share that information and they were eager and willing. If we didn’t send out a survey, they would contact us and be like “hey can we do this?” So, they were willing to share a lot about their lives.
We also learned that even with a really small number of people, it was interesting to see what transpired over the course of the year. It’s certainly not a basic income. It’s very short-term defined cash. But just that security that it provided, did. It allowed someone who was kind of couch surfing between friends and family, working a part-time seasonal job to actually move out to Antioch, where she was able to get an apartment with a group of people and started working a full-time, like much more steady job. There was a student who was able to work fewer hours at like fewer part-time jobs and focus more on school and giving balance in their life and figuring out what they wanted to do next.
So, there’s just so many different ways that it can influence people, but I think we will just, in those six we’ve learned so much, and I’m really excited to see what happens with 3000 people. So those indivduals are actually still participating and receiving smaller amounts of money.
So, we’re launching now, this is our second phase of the pilot, where up to 100 people still in the Oakland area, they’ll be receiving smaller amounts of money. It’s less about what does a basic income do, but more about operationally, the process of distributing payments of collecting data of recruiting. So, we’re refining those. We’ve learned a lot with six and now we’re learning more. We’re working with a national survey research firm that’s helping us implement the entire study and so they’re getting involved now too.
So that’s our last pilot phase. That’ll probably run for another six months to a year. But hopefully we’re planning on later this year launching a larger 3,000-person randomized control trial across two states.
Owen: So, we want to get into that in a moment. I’m curious if there’s any pitfalls or things you learn not to do either from talking to the people who are studying this in the sixties and seventies or from your pilot studies in Oakland?
Elizabeth: From the sixties, I think one of the things that came up there was they were really looking at a macro level — they wanted to see if you give people money do they work less. That was the real concern, was the labor market response at that time.
But the study that they designed wasn’t really actually able to measure that because it could only look at a demand side response – do these people work less? But it’s not if everyone gets this and everyone has a floor, this injects money into the economy of people who are likely to spend it. Does it create more demand for jobs? Are people able to say, “well, I don’t wanna take that job because I have this floor” and wait till they find a different job and what does that do to wages. Also, it was a very short-term study, and, in some ways, it was like an opportunity for leisure as some have talked about.
So, one thing that we wanted to do first is say “ok, we wanna make sure that the questions we’re asking we can actually answer with our study.” And that’s why we really are focusing on what are the effects of this unconditional cash monthly over a three- or five-year period on individuals and their families and those in their network. We’re not going to be able to identify what happens to the entire community or what happens to prices or what happens to rent levels and things like that. But we are able to say “ok, how does this affect individuals?” “How does it affect the decisions they make? The opportunities they have? Their spending patterns? Their well-being?” All kinds of different things like that.
Jim: So, you mentioned that hopefully this year you’ll be launching this much larger experiment. Can you tell us more about that? Who is involved? What is the process going to look like? How will you actually run this?
Elizabeth: So, we have developed a proposed design that’s actually available on the website. We’ve shared it with, we’ve gotten feedback from probably hundreds of academics and policymakers. We’re still modifying as we continue to learn from the pilot, but we’ve partnered with universities. We have another group of academics, David Broockman from Stanford, Sarah Miller from the University of Michigan, and Eva Vivalt from Australian National University are working very closely with me. We’re the four PIs and we have a growing group of eight or nine senior academics who are advising and overseeing the project.
As I said, we have partnered with the Center on Poverty and Equality at Stanford. We’re partnering with Poverty Solutions at the University of Michigan. It’s not something we’re doing in isolation obviously. And we are working with a large national survey research firm that works on these kinds of experiments they’ve done, Moving to Opportunity 8 years ago and things like that. So definitely helping with the implementation.
So right now, we are actively fundraising and applying for grants and things like that and continuing with the pilot in preparation for, as I said, hopefully later this year, and we have a design that includes 3000 individuals, 1000 of whom will receive $1,000 a month. Most of them for three years and a smaller group for five years.
Owen: And can you speak to the specific data that you’ll collect?
Elizabeth: We are collecting a fairly wide-range of data, and there’s a couple different sources. One is administrative data which is data that the government collects on things like IRS earnings and that kind of reports. There’s some health data. There’s some use of existing benefits. For kids, there’s school attendance and all that kind of thing. So, with permission we’re actually, the project is overseen by the Institutional Review Board at Stanford, but with individuals’ consent we’re able to collect that data so that is sort of passively, they don’t have to stay in touch with us, we’ll be able to collect outcome long-term on some of these measures.
We also, we’re doing in-person surveys at enrollment and then midline and then end line. We’re also doing shorter web-based mobile surveys, maybe monthly, to collect data on some things that we need repeated measures or if there’s a lot of problems with recall.
And then a large group of people, probably about 200 of the recipients, will be followed much more closely for qualitative interviews. So, I’ll sit down with them open ended, really trying to understand their experiences. I’m trying actually not only like what are the effects of the cash but then why? What are the pathways? And what are the constraints people still face or how could the design be better or be more helpful.
And the outcomes themselves range, it’s a fairly holistic study. I think a lot of people as I said, in the past it’s been very much focused on “do people work or not work?” And that’s something we’re collecting data on, but it’s much more broad. I think, how do people spend their time in general? There are so many other productive uses of time just besides the paid labor or that they’re caring for a child or elderly relative, or they’re starting other businesses, or how do people spend their time?
We’re looking at financial health and measures of resilience. So not only, yes, they have a steady stream of income, but then if they face an unexpected expense would they be able to cope without filing for bankruptcy and things like that. We’re looking at lots of measures, health related measures. Not only outcomes but also service utilization and mental health outcomes which a lot of other studies, like lottery studies and the Earned Income Tax Credit, have all had very positive effects.
We’re looking at subjective well-being and measures of self-efficacy and locus of control and how does this affect well-being more broadly. Because I think those types of outcomes really have a long-term effect on all these other outcomes we’re looking at, and how does this minimal level of security, in what ways does this affect well-being and outlook?
Jim: I know that in some of the studies that have been done in developing nations around cash transfers, one of the aspects that’s been explored is context setting around giving people cash, and if it’s presented, it can be the same money and there could literally be no conditions, but if it’s described in a different way to people, and there’s been exploration as to how that description actually then has an impact in what ultimately happens to people. Is that something that will be either actively included in the experiment, or will there be some ways to do analysis around that?
Elizabeth: There will. So, in order to have, I don’t wanna go down the rabbit hole of statistical power, but in order to be able to really detect effects, we can’t have too many treatment arms. So, if we give people lots of different amounts of money or change the way it’s framed a lot of different ways, it’s a lot harder.
We want to focus on really more of what we call heterogenous affect. So, looking at how it affects people across different income levels and gender and things like that. So, we’re having a uniform across everyone framing. But, having said that and partly because we aren’t the government, we can’t, we’re a non-profit organization and researchers and there’s only so much that we can do. I mean we don’t want to deceive anyone in that way, but we want to understand how people view the money.
And, so, certainly part of the analysis is figuring out and there’s a lot of questions related to government, like really trying to dive into that because I think it does make a huge difference even in, I mean, as we talk about if this is viewed as a stigma, like just a welfare program versus this universal human right, it can have a very different effects. And so that’s something we want to explore through the analysis.
Owen: What are you personally curious about in terms of how this plays out?
Elizabeth: I think a lot of things. I think for me that level of security, having worked a lot in the existing system and knowing, like people just week to week, or even month to month, it’s a constant struggle and it’s inability to plan for the future or think about the future, because it’s just constantly “well, how am I going to pay my bills this week or this month?” And that stress just completely wears people down.
And so I think this would apply a lot across the income level, but I think specifically I’m really interested in seeing how that $1,000 a month is not, you know, a ton of money, but it does provide this level of security and how does that change peoples’ lives and their relationships? And I’m just very eager to learn, just to hear their stories and to, not just the data but just really on a very basis level, how does this affect so many different aspects of their lives?
Jim: So, you mentioned that the plan is to launch this experiment this year. I know at Universal Income Project we often have people curious, first curious about what’s going on but also curious about being involved in some way. Is there a way for members of the public to somehow be involved in this effort?
Elizabeth: Yes, so I mean one of the things, it’s taken us a while I think, the study was announced and then we kind of went underground, and it’s been a, you know, people are like “oh, it’s being secret” and I think that was never the goal. I think, we just wanted to figure out what we were doing before we start talking about it.
There are certain aspects of this. We’re gonna be extremely transparent with exactly what we’re measuring. How we’re measuring it. Every detail of the plan. You know, how we’re gonna do the analysis is all gonna be available except things like locations and protecting the privacy of participants is like our absolute first priority and so people cannot say you know “can I interview someone?” You know, protecting that privacy. But beyond that, you know, we’re gonna be very transparent.
So, in terms of following, we’re still trying to figure out framework. We have a website, whether it’s blogging or how we’re gonna be sharing that and sharing updates up on the research. Certainly, we are actively fundraising, so anyone who you know wants to contribute to the effort can do so through our website. This money is going, one to one, like 100% directly to individuals. Giving people $1,000 a month for three and five years is pretty expensive so it’s something we continue to raise money for. But we want people to be involved and share the information as much as we can.
Jim: Is there a website URL you can share for folks?
Elizabeth: Sure. It’s YCR.org/basicincome.
Owen: Thank you, Elizabeth Rhodes, for joining us on the podcast.
Elizabeth: Thanks so much for having me.
Owen: That was Elizabeth Rhodes on the basic income podcast. I’m very excited to see where this data goes. I think it becomes a lot more tangible to people, what cash transfers can do when you see things like kids stay in school longer, there’s some positive outcomes with health, and that’s a lot easier for people to grasp than they had more money, and it made their lives better.
Jim: Definitely. And I find it really encouraging to see them taking time to develop such a thoughtful approach to the experiment. They’re really thinking about what is the right way to execute this, taking the time to do the pilot in advance in order to assess logistics and really thinking through what it is they’re actually measuring here, what are the outcomes their going to be looking at.
That’s some pretty sharp contrast to the negative income tax experiments that were run in the sixties and seventies. Granted, these were amongst the first controlled experiments around policy that were done, but it was pretty muddled as far as what they actually were looking to assess through those, and I think as a result you saw people didn’t have clear takeaways. And we have our interpretations now, but it really wasn’t clear conclusions that could come out of that in a way that, to your point, could be really valuable to understanding how and if we move forward with the policy.
Owen: Yeah, and with the sixties and seventies ones there were at least some, it seems like some people had an agenda in how they wanted to interpret the findings. And it was easy enough to project an agenda.
Jim: I’m sure we’ll still have people with agendas now. Hopefully if it’s more clear from the start, it’ll be more difficult to derail that.
Owen: Right. And there’s a lot of quantitative data that they’re gonna collect which I’m excited to see. And I’m excited to see the qualitative data. I lean toward the quantitative because its immutable in some ways, but a lot of the real benefits come from reduced stress and just people knowing a little more about their future financially.
Jim: Alright. That’ll do it for this episode of the Basic Income Podcast. Thank you to our producer, Erick Davidson, and if you like what you hear, please do make sure to rate and review us on Apple Podcast or the podcast service of your choice and let your friends know about this. We’re always looking for new listeners. We’ll talk to you next time.
Jim and Owen take listener questions on some of the most common topics that come up around basic income. Will inflation eat away many of the benefits? Will we need to regulate predatory lending? How will labor rights change? And what does basic income mean for the future of labor and the identity we place in our work? Keep the questions coming by sending them to the Universal Income Project on Facebook, or to Jim (@dr_pugh) and Owen (@owenpoindexter) on Twitter.
How would a basic income impact the disabled community? We delved into this question with social anthropologist Annie Harper of the Program for Recovery and Community Health, Yale School of Medicine. Harper, who works with mentally disabled people, describes the hopes and concerns a basic income offers.
We often talk about economic insecurity at the statistical level, but how does it impact people’s lives day to day and month to month? Rachel Schneider and Jonathan Morduch examined this question by getting to know families who struggle with financial security, and chronicled their findings in the eye opening book The Financial Diaries: How American Families Cope in a World of Insecurity. Schneider spoke with Jim and Owen about her findings and the sacrifices people make for financial stability.
How would a basic income within a city affect how that city operates? To delve into this question, Jim and Owen spoke to Mark MacKinnon, City Councillor in Guelph, Ontario. The conversation ranges from the effects a basic income could have on local businesses to how the political appetite might change for other city improvements. MacKinnon also touches on the basic income pilot that just began in three cities within Ontario.
Jim and Owen answer listener questions from how to pay for basic income, which country will implement a basic income first and how we will get there. You can send your questions to the Universal Income Project on Facebook or Twitter, or tweet at Owen (@owenpoindexter) or Jim (@dr_pugh).
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Owen: Hello and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh.
Owen: A while back we asked you for questions about the basic income, and a number of you responded. In this episode, we are just going to go through a few of those.
Jim: Unfortunately, we’re not going to be able to get to everyone’s question, but we did have a few that we thought would be good ones to start with. Here goes.
Owen: Alright. The first one is from Abigail Irwin, it came in through Facebook, “Here is the one big question I keep getting: how is it going to be funded?”
Jim: I would say for me as well, this is a question that people ask all the time. Since we’re talking about such a big program, people are naturally curious about, “Alright, where does the funding come from here?” One thing that I’ve mentioned before that I think is really important to remember is a lot of the conceptions we have right now about what the government “can or cannot afford” are really not based on reality.
That if you look at our economy and how much it’s grown over recent years, there’s actually so much money out there. Our Gross Domestic Product over the last 15 years has grown by four trillion dollars. Just taking a big picture snapshot, it’s important to know that there is money out there.
Owen: Yes and on top of that, I’ll say that while I think it’s important to talk about how are we going to pay for things, the government is very willing to drop billions of dollars on some programs without having this discussion. It’s only around new big programs where we do say, “Okay, well, where is that money going to come from because we haven’t already baked that in.”
Jim: We do see often around things like military spending, spending tens of billions of dollars ready at the drop of a hat is not uncommon, but as soon as we talk about billions or even hundreds of millions of dollars for social programs, people suddenly get very nervous about how we’re going to actually afford that.
Owen: And getting more into, “okay, how is it going to be funded?” — obviously, there are a number of ways you could do it. If you structure it as a negative income tax, you could just have a tax that runs backwards essentially. At a certain income level, you receive money instead of pay money in. That’s one way to do it where you don’t have to touch anything else.
Jim: Something I would add to that is, with negative income tax, one concern that I know people have is that if you’re actually not giving the same amount to different people, that could complicate the logistics figuring out, “alright, how do we actually assess someone’s income in the moment and decide alright, how big is the check we mail to them?” You can actually accomplish exactly the same thing using the tax code. You can structure it so that you give everyone the same amount of money every month regardless of how much they’re making but then make sure that you’re actually clawing back more of that money earlier on, based on how much they’re making when you’re actually assessing taxes. The same way you do now as far as withholding from paychecks.
Owen: Right, and just to offer a crude version of that, you could impose a flat tax and the revenue from that would just be turned into a dividend that would go equally to everyone. So everyone is paying the same percentage of their income into the basic income fund, but the way it works out is that at a certain point, you are paying and receiving about the same amount, and everyone above that ends up paying more, but they still get the dividend.
Jim: To give some more specific, since I want to actually make sure that we do give an answer to this question, there are actually a lot of different ideas for how we fund this out there. Depending on who you ask, you’re going to get different answers. Some of the most common ones that I hear proposed, one is the idea of — I think, particularly as the starting point — looking at the Carbon Dividend.
We’ve talked about that in the past. There was a proposal in California. There is currently, in fact, a campaign in Washington, DC around taxing carbon and paying out to revenue that comes in as a universal income, as universal dividends to people in the region. That could at the very least provide us with a powerful first step towards basic income by saying, “alright we’re setting up the system that gives everyone equally regular payments of money.”
Owen: I think that Carbon Dividend idea is my favorite in this whole space because it does start to address climate change as well. It takes this idea that we have shared resources, in this case, the air and the environment and that we are all invested in this whether we want to be or not. By taxing the use of the environment essentially which is a shared resource then we can all benefit from it.
Along the same lines, though very different, is the Financial Transactions Tax. That’s another one that gets thrown in periodically. We all benefit from the infrastructure of our financial system, and some businesses and people use that quite a lot to conduct business, trade stocks, whatever. By having just a very small fee on financial transactions, you could also do the same thing and fund the basic income.
Jim: Another one that often gets discussed is the idea that a Land Value Tax, where you’re assessing the value of any given piece of property that either a person or a corporation might own, and then saying, “we’re going to set some low level of taxation so that every month or every year, you are paying a certain amount based on the value of that piece of land.” Not just the land itself, but what’s actually on the land.
One thing that I think is really interesting about the Land Value Tax is it actually starts to get closer to the idea of a wealth tax. Something that is taxing not just how much money people are bringing in, but how much they actually own. Land isn’t a perfect measure of someone’s wealth, but it tends to be pretty close a lot of the time. That could help not only with providing the support that you get from basic income but also to share prosperity and share wealth across the country by really looking at that as the source of the funding.
Owen: Right. I think this is an important concept because while income is easy to track, or easy enough, a lot of the disparity that we see in the world is through wealth, and an actual wealth tax is very hard to administer because unless you have some way to track all forms of wealth, people are going to be able to move it around to not be taxed. But land is always there. You can’t pick it up and move it somewhere else. It does tend to be a good proxy for a holding place for wealth, especially in California, where we are.
Lastly, we can touch on general progressive taxation. We mentioned the income tax before but it doesn’t have to be a flat tax. It could be a progressive tax that increases as you go into higher income levels. There’s also a capital gains tax and perhaps others that you could mention.
Jim: Yes. Touching on the capital gains, right now we have the level of that set considerably lower than income. What that’s effectively doing is saying, sitting on wealth, you and the amount of money you get from that, you’re actually paying less in taxes and someone who’s working for the money.
Owen: You see those incentives pretty clearly in the market.
Jim: Right, exactly. That’s actually encouraging people to hoard rather than to spend. Also, again, if you look at the various campaigns that are going on around different policies, you’ll hear people talking about closing tax loopholes as well, particularly for corporations. There’s a lot of ways that companies are able to avoid what is the supposed tax rate that they might owe, due to how complex the tax code is in many places.
Owen: Hopefully, that gives you a sense of how we might fund the basic income. There are a lot of paths to do it, a lot of different sources you might look to. It should be said there’s no one answer to this. I’ve said this before the first step in creating a basic income is deciding that we want one. Once you have that destination, there are a bunch of paths to get there.
Jim: Right. I think it’s important to remember that oftentimes when we talk about these big bold policies, we know they’re going to cost a lot, but in most cases, we don’t necessarily have to go through all the math right upfront. It’s important to just know that yes, the funds exist out there. Let’s think about what this is going to do for people and then if this is actually something that’s going to help folks, let’s fight to make it happen.
Owen: Okay. Next question comes from Darcy Lengthier — hoping I’m pronouncing your name right, Darcy. “Which country will be next?” I have a couple guesses, and they’re pretty unoriginal.
[laughter]
Jim: Yes, we’ll probably have similar answers here. I would say any country that’s currently doing a pilot for basic income is probably pretty high on the list for ones that have potential to enact one. We talked about this before, but Finland launched their pilots in the last year. Ontario in Canada just launched their pilot. We do have the pilot happening in Oakland through Y Combinator, but it’s a little bit of a different situation since it’s a private entity funding it. I wouldn’t read quite as much into that as these programs that are actually being initiated by national governments and what that signifies as far as intentions.
Owen: I think my first pick in the draft would be Canada because they’re doing a pilot, and it feels like this federal government that seems like it would be ready to try something like this at least in terms of a Carbon Dividend or even like an Alaska style, natural wealth kind of thing.
Jim: That said, I think that there certainly are other countries out there talking seriously about it. Particularly for some of the smaller countries, if the people in power decided alright, this is a priority for us, if it was a country that was in a situation that have a reasonable amount of wealth or a lower cost of living for their population, they could potentially move pretty quickly to enact something.
Owen: I wouldn’t put Switzerland at the top of the list right now, but they have already had the referendum. It’s a small country with a lot of wealth. The math is a little easier there.
Jim: I think the big answer is, we don’t know. I think as far as what country will do pilots next, we haven’t talked about it much, but Barcelona is in the process of getting a pilot going. I do know there’s a lot of others that are in these discussion phases if not quite ready to launch.
Owen: The one last thing I’ll throw in there is, if you were to say the five most likely countries or the field, I’m probably going to take the field. I could see this coming out of somewhere unexpected or somewhere we’re not figured out right now.
Jim: Absolutely. Our third question is, “what kind of timeline are we looking at for America as a whole to implement basic income?” That came from Tim Kelly on Twitter.
Owen: Maybe December, January?
[laughter]
Jim: They’re just about there.
Owen: More seriously, I think one step might be to have this become more mainstream within the Left / Democratic Party in the US. If and when the Democrats take back power, maybe we could see something like a Carbon Dividend. I could see that happening in the 2020s, to give a decade.
Jim: If we can have it in 2020, I would be very happy. That is probably a little sooner than I was–
Owen: It’s a bit aggressive.
Jim: I would say, I generally tell people that if those of us who support the policy approach this right, 15 years seems like a reasonable timeline. That said, I think this is a kind of policy where it’s going to be very, very far off until it’s not. I think that there’s going to be nothing linear about the progression of the basic income movement. It’s going to be those of us who are in the space talking about it, getting more people hearing about it. Really writing the playbook for how this might happen, and then it’s going to be a question of when is that moment.
When is that moment when suddenly people are like, “Oh, we need something really different. We actually need to guarantee fundamental economic security for people. How do we do that?” If at that point, we have really set the stage for basic income, it could happen really, really fast.
Owen: I agree. I used to think of self-driving cars and trucks as the moment when everything was going to flip. I have actually backed off that a little bit just because they’re already on the road. This is already happening, and it hasn’t really catalyzed a discussion in a way that means policy is going to happen very soon, but I think we might see something at some point where one day Amazon lays off thousands or tens of thousands of workers. It’s them, plus Google, plus others, and it creates some amount of desperation where people are looking for a policy fix.
Jim: I will say, I don’t think we haven’t seen any significant amount of layoffs around self-driving vehicles.
Owen: Right. That could still happen.
Jim: It’s something that I know at this point, a lot of people think could be coming relatively soon, but how that will actually proceed? I think we’ll have to see. I will say I think I’ve been struck by how much people’s perception about the fundamental characteristics of work have changed in the last couple of years. That two years back, I felt like most people believed that the way that we do work would stay — I think stay is actually the wrong word because it was already shifting at that point, but could remain similar to how we did that in the 20th century.
Now, I think more and more people recognized that that model for how our labor space operates just is — there isn’t a way to go back. We are in uncharted territories here. We do need to be thinking more outside the box as far as what are the right policies to provide people with security they need.
Owen: I think just to add a little bit onto that. The moments that might catalyze something might just be something where we realize that we are in uncharted territory, the collectively “we.” Because I think we’re already there. We are already into the woods, and we’ve lost our map. But you don’t necessarily know that until some day, you woke up, and you realize you’ve lost the path. Sort of a strange metaphor for us [laughs].
I think it’ll be as much a realization of where we already are than something where we get to a point and, yeah, we are there.
Jim: We’ve meandered a bit from the original question here. So if we had to name a timeline, I would say I’m going to stick with 15 years.
Owen: Okay, I’m going to go Price Is Right style and just take the under on that one.
Jim: [laughs] 14 years?
Owen: Aggressively optimistic there. On the Price Is Right, you say one year and then you get all the years below that, the below years. This is a very dated reference, I’m realizing. I don’t know think that show is even on the air anymore. Haven’t watched TV in a while. Okay, related question, also the final question, “how do we get there?” So, Jim, how do we get there?
Jim: Well, this is asked by StepUpBG on Twitter, and we covered a little bit of this in the last question. I truly believe that the right approach to move towards basic income is to say that right now, we are laying groundwork. We are doing the things that make basic income more familiar, more understood and so that once we get that moment, we can say, “Alright, we got this. We know what this is. We’re ready to go. Let’s make this happen.”
Owen: I think you find, at least in America, that often the first time people hear of this policy — maybe less so, I’m getting this reaction less and less — but the most common first reaction is some amount of shock towards the idea of just giving people money unconditionally. I think people do need to sit with the idea for a little bit, and it needs to penetrate into more circles and become something that people are less afraid of talking about.
Jim: Right, I think part of that is just talking to more people about basic income and what it might do, having it be a more familiar concept that people they know and trust actually think this could be a really good solution and I think part of that is looking at what are the stepping stone policies that, in practice, can actually show people more what this is about. I think what to makes sense to go back to here is looking at the Alaska model and how the fact that everyone there is getting an unconditional payment every year is actually something that makes this whole thing make more sense to people a lot of the time.
Owen: Yes, and along that, I’m very excited about the trials in Ontario that just started and the upcoming one’s run by Y Combinator because those will be real trials, real stories, real people who are benefiting, so then it’ll be that much less abstract and that much closer.
Jim: I think those stories are going to be important and then what I would really like to see is for some city or state in the US to enact some small universal dividend in the same style as the Alaska model because I think that it’s that combination of hearing the stories of people who are getting full basic income and then yourself receiving this smaller additional income. Suddenly the intellectual leap between everyone getting basic income is much, much less than it is today.
Owen: I’m of the mind that $100 a month, even though we usually talk in terms of around 1,000, something like a 100 could be transformative for a lot of people and, if not transformative, would make a big difference. You would feel it.
Jim: If you’re scraping by, 100 a month is a game changer.
Owen: Yes, and speaking from my own experience, I wouldn’t say I’m scraping by, but I’d love $100 a month. [laughs] That wouldn’t be nothing.
So, how do we get there? I think a lot of what we’re already doing, and hopefully more trials, more support, more talking about it, more and more podcast episodes.
Jim: I think this is one where all y’all listeners can actually play a big role here. Again, make sure you are talking to people about this, looking for ways that you can push the idea forward. That’s actually what’s going to help make this happen.
Owen: So thank you to everyone who sent in questions. Please keep those coming, you can send them to myself @owenpoindexter at Twitter or Jim, you’re @dr_pugh there.
Jim: Or just tweet out the Universal Income Project, @UIProj on Twitter. We’ll get them there too.
Owen: Or you can find the Universal Income Project on Facebook as well.
Thank you so much for listening to the Basic Income Podcast. Thank you to our producer, Erick Davidson. Again, please tell your friends, talk about basic income, talk about the podcast. This could be a good conversation starter for them. Subscribe if you have not already on Apple Podcast or the service of your choice. And while you’re there, please do leave us a rating or review. It’ll help more people find the podcast. See you next week.
We often hear about the economic and social motivations for universal basic income — but what about the moral and spiritual ones? Owen and Jim spoke to Dr. Malcolm Torry, author of Citizens Basic Income: A Christian Social Policy, about how providing a universal basic income is in line with the Christian faith.
Owen and Jim discuss Vice President Joe Biden’s recent objections to basic income, and the practical and philosophical points that come up around basic income and employment. They delve into why a basic income could be good for workers and how automation has both driven and skewed the basic income conversation. They also touch on the increasing precarity of today’s jobs and the highly valuable work that goes uncompensated.
How do we turn the excitement around basic income into political pressure and policy victories? Reetu Mody, Campaign Manager at Presente.org, joins Owen and Jim to discuss what a good organizing strategy around basic income would look like, and the groups that might form a coalition to advance basic income in the U.S.
How much would a basic income in the United States actually cost? What are the most common mistakes people make when calculating a basic income? To answer these questions, we spoke with Karl Widerquist, who has been studying and writing about basic income for three decades. Widerquist recently published a “back of the envelope” calculation on basic income which produced some surprising results.
As basic income becomes more of a topic in the media, it is finding its way into electoral politics as well. Owen and Jim speak with Detroit mayoral candidate Ingrid LaFleur, who included basic income as a key plank in her platform. LaFleur offers advice on how to approach a race as a basic income candidate, and shares some surprising reactions she got on the campaign trail.
Three years ago, few people had even heard of universal basic income. Now interest is growing across the country, and the idea is getting more exposure and support. What led to this shift? Owen and Jim delve into many of the factors at play, and discuss how we can take advantage of this moment.
When considering the impact of basic income, we usually think of it as a standalone policy — but there’s nothing stopping us from imagining UBI as one piece of a larger policy framework. In this episode, Marina Gorbis, Executive Director of Institute for the Future, shares her perspective on a comprehensive framework for the future: Universal Basic Assets.
We are watching the economy change before our eyes, and Zipcar Cofounder Robin Chase has been at the forefront of that change. She gives her observations on the platform economy, automation, self-driving cars, and how a basic income could be what smoothes the transition as we move to a different type of relationship between people and their work.
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Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh. When people think about basic income, they often tie it to some future scenario where automation has drastically affected the way that the people work. But just thinking about how technology affects work is not something limited to the future — it’s actually something that exists today.
Owen: I feel like automation and just the way that technology impacts employment and how people relate economically is something that comes on much more slowly than people tend to appreciate. And the self-driving cars may be a perfect example.
We think of them as this kind of futuristic thing that’s going to be a whole new product that looks pretty unlike what we have today. However, we’ve got automatic transmission, cruise control, a lot of cars have lane-keeping right now where it automatically stays in your lane, self-parking. The same kind of thing happens with the economy where recently more and more we have shared resources, the collaborative economy, the sharing economy. These are slowly chipping away at the legacy structures that have existed for decades.
Jim: There’s more and more companies out there that are adopting new approaches to the way that they employ people and the way that, really the conception of what a worker is. The people who are working in these companies really have a first-hand experience as to seeing what’s happening here and what impact it’s having on people’s lives and the economy at large.
Owen: This week, we are very lucky to have someone who’s at the forefront of the new economy. Robin Chase is co-founder and former CEO of Zipcar and author of Peers Inc. Welcome, Robin.
Robin: It’s a pleasure to be here.
Jim: To start with, Robin, can you tell us a bit about what first got you interested in universal basic income?
Robin: When I was writing this book Peers Inc, I was thinking a lot about, I would say, the platform economy. I was understanding from a trend basis and from economic basis that everything that can become a platform will become a platform. That the outsourcing of workers — and I say that in a kind of negative way — is incredibly economically compelling. That companies that think of themselves as platforms grow faster, they learn faster, they are hyper-adaptive and hyper-localized. They’re very hard to beat. So if your company can take that shape, you’re going to take that shape.
We’re seeing it today. I was looking at something that was the top 50 innovative companies in the world. I would say 98% of them are what I would consider to be Peers Inc companies. Companies that are based on a platform with this satellite of assets that are outside of them. Once you understand that trend and internalize that trend, it says, “Whoa, oh my god.” We have completely structured our economy on the idea that people work full-time and get benefits full-time.
The fact is, I don’t know if that was ever true, maybe it was true in 1940, but it is not the economy that we’re seeing today. Our social safety nets and workplace rules have been tied around this aging idea, outdated idea of what work looks like and that is not the future. I’ve realized we really need to have a universal basic income.
I would say the other place that has taken me down this path is I do a lot of work on the future of self-driving cars. Unlike previous transitions, I expect this one to happen quite quickly because it’s economically compelling to make the transition from both the supply side, if you’re a supplier of transit services, and from the demand side, if you’re a consumer of transit services.
It’s very compelling, economically compelling to make the switch. Which means we’re going to put a lot of drivers and their ecosystem out of work not in 60 years but in 5 to 10 years. Another reason why I am definitely supportive of doing pilots at a minimum around universal basic income because I see it’s something that we definitely are going to need to have. We need to have it today, and we’re going to need more of it, we are going to need it more profoundly in our future.
Owen: The changing economy is something we talk a lot about here. How would you describe what it’s like to be a worker in the platform economy?
Robin: If I think about, let’s just talk about the upsides first. I am 58, and when I got a job, my first job, my first job was boring as hell, and I hated it. My mom would say, “You can’t quit that job. You can’t quit that job for at least a year and a half because it’s giving you benefits. If you quit any earlier, you’re going to look like a shifty worker.” It took me years and many different jobs to figure out what it was that I was good at, what I loved to do. It was a kind of very slow iterative process sequential learning of what it was I was good at.
One of the beauties of working on these platform economies is that I can do many things at the same time. There’s this nice sentence I got from someone else that said, “My father had one job in his lifetime, I’ll do six jobs in my lifetime, and my children will do six jobs at the same time.” Those six jobs at same time — and so maybe it’s going to four, who knows? But when I do that, I can have a passion job. I can have a job where I’m learning. I can have a job that’s my money job. I can have these different types of parts of my life where I’m exploring different things that I might like to do or that I’m interested in while I’m making some income.
One of things that people really love about it is being in control of your time. Being flexible, having the flexibility. You are your own boss. Coming back to the contrast with the idea of full-time jobs as being the end-all: in a full-time job economy, you’re in a binary position. You’re either employed or unemployed. You either have income or you have no income. That choice about being employed or unemployed is out of your hands. It’s some boss that’s choosing to hire you or not hire you.
In this platform, Peers Inc economy, I am able to choose my own, I can make money with my own initiative. I can work the number of hours, I can earn the amount of money I need. All that said, those are all the positives. So, positives: flexibility, figure out what you’re good at, having economic agency. Those are really positive things.
On the flip side, it’s very precarious. It’s precarious while you figure out what you are good at. It’s precarious in that some of these things are– some of this work is seasonal. It’s precarious around health benefits and workplace rules. All of which now fall into the burden of the individual. If we were precarious before, when we work in this Peers Inc economy, this platform economy, we are more precarious than before. There’s both resilience and precarity built into this doing four jobs at the same time.
That’s kind of how I see the upside and downsides. I just want to say one more thing about this: when we talk about the collaborative economy, of which we are finding and discussing many negative aspects, I want to say the fact that there are negative aspects doesn’t mean it’s not a great thing because I just explained lots of great things.
If I go back to the foundation of industrialization, people worked seven days a week and we had child labor. We fixed those things. The fact that this new way of work has downsides, it does have downsides, and we have to correct and work on those downsides. Right now, we are seeing people increasingly having to work not in full-time jobs work at many things and we don’t have the– we haven’t corrected for the downsides that come with that way of work.
Jim: On that note, how do you see basic income connecting here? How does it serve to deal with some of the issues that you just described?
Robin: There’s that common– there’s that statistic that, I think it was Gallup that did, that was saying 40% of people couldn’t cover a $400 bill. I look at that and when you do sociological reading, you see that these outlier events are the things that take people into bankruptcy and take them into terrible jobs. I see universal basic income as being the minimum platform on which we can now arrange our life.
It’s giving us a basic income security, and what is that number? I think about, one thing about universal basic income, I don’t know if it’s going to be $1,000 a month or if it’s going to be $400 a month. I don’t know. I know that at both of those points, it’s incredibly valuable to people. It takes away the precarity. Then I was interested at Mark Zuckerberg’s Harvard commencement speech and that he also pointed out this other upside which is rich, well-educated, privileged people have the opportunity to follow their passions and take risks.
Poorly educated people who don’t have rich parents, spouses, cousins, and relatives to support them can’t take any risks pursuing any sort of interesting things. Basic income will enable them to do that. It seems, it’s not– it’s an equity piece, but I think it’s also an uncovering of innovation, improved quality of life, just a better– we’re getting more out of people. We’re getting more of the best out of people, rather than tying people to a go safe, don’t take risks type of work.
Owen: You mentioned self-driving cars earlier. A very common response to the automation issue is that, “Well, we’ve had these concerns in the past, and new technology always brings about new opportunities.” How would you respond to that argument?
Robin: That argument is extremely frustrating to me. That I look at it, and I say, and I think, you venture capitalist, you businessman sitting in your chair can say that. But the person who is in Bloomington, Indiana, who has a high school education, who’s 50 years old, who’s been driving a taxi for the last 30 years — that opening up of the new ideas of jobs, that is not going to help him. That is specific people with specific education and specific geographies. The idea that this is going to open up new jobs is, it’s a kind of rainbow fantasy dream.
Sure, in the fullness of time over the entire economy, it could have new interesting things that happen, but starting Day One and Year One and Year Two for specific people and specific economies, we know profoundly that that is not the case. That we have people in cities that have lost their steel industry that are still terrifying. We have Detroit. If it were so straightforward, wouldn’t that have– we wouldn’t be seeing 30 years on the issues you have, the unemployment you have in Detroit. I think that’s a specious argument.
Jim: There’s been a lot of discussion and germination of ideas around basic income in the last two years in the US. What do you see as the most exciting recent developments there?
Robin: I have to tell you a funny story to tee up this. When I was writing Peers Inc and I got to this chapter about the fact and I saw, whoa, everything that can become a platform is going to become a platform. I’m seeing this huge push of work into these insecure part-time types of things. I thought, “You know what? What we really need is– people need an income that just comes in every month as a basic standard.” It was as if in my mind, I had come up with a really crazy idea that I invented. Kind of like my 11-year-old coming home and saying, “Mom, what if dogs pulled sleds? There could be something called dog sledding.” I thought, that’s been invented.
I want to say, with humility, with incredible amusement at myself, two-and-a-half years ago, I had never heard of universal basic income. When I was writing this book, I thought, “Oh my God, we need a universal basic income.” I think I called it, We Need a Basic Income. Then when I was– after I wrote this chapter, I sent it out to an economist and a person doing tech futures, a kind of tech futurist. I said, “I feel like I’ve really gone too far in this recommendation.” Their emails back to me were laughing. “Robin, what are you talking about? This has definitely got to be part of the future. This is something that has been tested and piloted in other places.”
I was very amused. If I think about the last two years, what really struck me is that this has become an increasingly mainstream conversation. What I thought two years ago, as a person who worked in tech, who works in innovation, who is very well-educated, I had never thought about it. I had never thought about it, never heard of it, never considered it, and now we see articles about it all the time. Not just on Medium, we see them in regular everyday newspapers, on televisions, and around the world.
That’s been what’s been amazing to me over the last few years, is to see the increasing beat of discussion. Whenever I’m going toe-to-toe with someone on the idea of universal basic income, and they want to say, “We can’t afford it,” or “People are going to stay home, play video games, and smoke weed.” My answer to that is, “Maybe.” We have to do some pilots, because until we do some pilots, we’re just going to continue have this circular discussion about its impossibility and its impacts.
That’s what’s been quite interesting to me is to see a larger– is start to see the rise of more and more pilots, so that we’re going to get more and more data, so we can put an end to this circular conversation that I think has been– is where we used to be, and we can start getting to a place of real data.
Owen: You’re both the proponent and a builder of the collaborative economy. A great example of that is the company you co-founded, Zipcar, in which people, in which there are cars that anyone can access and take for the day or for the hour. Do you see the collaborative economy as a piece of the same puzzle along with the basic income, or are they more parallel to you?
Robin: I see the collaborative economy as a restructuring of our current economy. That restructuring requires new rules, and that’s where UBI comes in. In the old industrial capitalism, you would build– the way you extracted the most value out of something was to put a very strong barrier around the company. You knew– and we would do that with patents and copyrights and certifications and trademarks. You knew very, very clearly who worked for the company and who didn’t work for the company. Who owned what assets and who the assets belong to. It was very clear, the ownership model.
In this future economy, this currently blossoming and growing economy, this collaborative economy, it is very ill-defined and very fuzzy. Who owns these assets? Are you an employee, or are you not an employee? Who are you partnering with? What assets are you using? Is this a personal asset, a commercial asset? Is this — I’m looking outside my window — is this a residential district, or is it a commercial district?
Who owns my data, who has access to my data? Whose access to my smartphones? All of this today is becoming very intertwined and multi-purposed. All of those old rules that went with that old economy no longer suit this new way of working and collaborating and sharing assets and ideas and data.
UBI is a very nice underpinning to this new economy, to allow this fluidity of work, fluidity of ideas, fluidity of innovation to happen with all of– I just feel like, I feel a swirl, if you go deep into the idea of shared assets and data and space and time. If you want to get the most out of that multi-purposing and most of that potential, you need to have a nice, a firm economic standing that gives you the opportunity to take advantage of how you extract this new value, how you find new potential, how you share these assets in a fluid way. You need to have a kind of bedrock economic standing underneath that.
Owen: That’s fantastic. My last question is, I’m just wondering if there’s anything you’d like to add on any of these topics.
Robin: We haven’t talked about it a lot yet, but when I think about the automation of self-driving cars, if I had my dream future, which I’m working hard to help achieve in cities, all cars would be shared. Which would mean we’d only need 10% of them, which means 90% of the cars, let’s go to say 50% of cars we’re building today, we don’t need them to be built. We don’t need the resources to be dug up out of the ground, transported long distances, assembled in factories, transported to new places, housed and warehoused on streets.
It completely– it takes this big piece of the economy out, in a way, and I see there’s a huge upside to that. That we can take back our cities and our curbs and our houses and parking lots, if we get this gigantic win from sharing cars and not having to store them. All of that, I want that transition to happen as quickly as possible because it has so many upsides. In order for that transition to happen as quickly as possible, we need to provide this support structure.
I look at that, and I think that’s just one sector of the economy. I feel like our entire economy, from my perspective, a sustainability and equity perspective, is quite broken. I would like us to be able to evolve much more quickly without having the incredible anxiety over what’s happening to individuals within that economy. It’s another argument for me to have free universal basic income.
If we don’t do that, two things unfold. One is, when we think about the automation of agriculture, we did that in a horrible way and a lot of people, millions and millions and millions of people worldwide, suffered through that 20-, 30-, 40-year transition. We should be doing much better today. I’d like us to do a much better job of that transition, and I’d like it to be much faster because of the incredible upside and the potential to unleash people best selves instead of their worst, “how can I get paid doing whatever it is required” self. I want us to do many more pilots on universal basic income. Ultimately, I want us to be a adopting it and paying for because I think it will unlock a dramatically better quality of life and dramatically more innovation than we see today.
Owen: That was Robin Chase, co-founder and former CEO of Zipcar and author of Peers Inc. Thank you so much for joining us.
Robin: You’re welcome. It’s my pleasure.
Jim: You’ve been listening to the Basic Income Podcast. Thank you to our producer, Erick Davidson. If you like what you hear, please make sure to rate and review us on iTunes, Stitcher, or the podcast platform of your choice. Also make sure to share with your friends. We’re always looking for new listeners who’d like to hear more about universal basic income. Talk to you next week.
