Alex Howlett: Making Basic Income Dynamic and Responsive
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The amount that everyone would receive under a basic income is generally stated as $1000 per month, give or take, with any nod to how this amount would change contained in the occasional “chained to inflation” at the end. Our guest this week, Alex Howlett, argues for a different framework: making the basic income dynamic and dependent on several economic factors. Jim discusses this concept with Alex, and how it might work in practice.
Should Government Programs be Universal or Targeted?
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One of the most common questions we get about basic income is, “why should it be universal?” Or put another way, “what’s the point of giving Bill Gates $1000 a month?” In this episode, Jim and Owen dive into the debate and break down the benefits and drawbacks of universal and targeted programs, and whether a hybrid approach would be possible.
Since LBJ’s Great Society programs revamped America’s social safety net, the average American has steadily taken on more and more risk, both through increasing costs of healthcare and education, and the growing precarity of employment, due to globalization, automation and contract work, among other factors. Jacob Hacker, professor of Political Science at Yale, has detailed this growing burden in his book The Great Risk Shift, the second volume of which was just released. Hacker joined the podcast to discuss this major trend in the economy and how a basic income could change the equation.
The second edition of the Great Risk Shift may be purchased here: https://global.oup.com/academic/product/the-great-risk-shift-9780190844141?cc=us&lang=en&
Running for President on Basic Income, feat. Andrew Yang
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The basic income movement is gaining national exposure through the presidential campaign of Andrew Yang. Yang has now been interviewed by many major TV networks, magazines and podcasts, and he has qualified for the first two Democratic debates. Owen spoke to Andrew Yang as he was on his way to a campaign stop in New Hampshire about running for president, how basic income resonates in places like Iowa and New Hampshire, and how the politics of this might proceed if he were elected president but faced a skeptical Congress.
Preliminary Results from the Finland Basic Income Trial, feat. Ylikännö Minna
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Finland recently concluded a nationally funded basic income experiment, focused on people receiving unemployment benefits. We got the first wave of findings from the data, and dove into the results with Ylikanno Minna, Senior Researcher at Kela. We discuss the data, what it means, what we can learn from this experiment (so far) and what we can’t.
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. This episode originally aired in September 2017.
Basic Income and the Disabled Community, feat. Annie Harper (rebroadcast)
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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. This episode was originally broadcast in November 2017.
We often talk about what effect a universal basic income would have on financial stability, but what about our mental state? Jim and Owen delve into the research around poverty and cognition, and explore the differences between an abundance mindset and a scarcity mindset. This episode was originally broadcast in June, 2017.
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. This episode was originally broadcast in July, 2017.
Examining Iran's Cash Transfer Program, feat. Dr. Djavad Salehi-Isfahani
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In 2010, Iran replaced their energy subsidies with a cash transfer program, which was originally intended only for poor Iranians, but was expanded to go to everyone. We now have ample data to examine the effects on labor supply and a handful of other social metrics. Much of our knowledge of Iran’s program comes from a study co-authored by our guest this week, Djavad Salehi-Isfahani, a professor of Economics at Virginia Tech, and a Non-resident Senior Fellow at the Brookings Institution. Dr. Salehi Isfahani explains both the economic impact of the program and the public reaction to it.
Automation and its Role in the Basic Income Movement
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For so many people, including both hosts of the podcast, the entry point to basic income was concerns about automation and how it could create an economy that requires many fewer employees. In this discussion episode, Owen and Jim delve into the pluses and minuses of automation’s primacy in the basic income discussion, and what a more rounded rationale for basic income looks like.
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Episode Transcript
Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh. Something that comes up very, very often in basic income conversations and media coverage is a strong connection between basic income and automation. The idea that basic income is a solution for or at least is very closely, innately tied together with this idea that automation will drastically change our workspace in the relatively near future.
Owen: Yes, and I think this is how we both initially came to the idea of basic income. We wanted to take this episode to discuss the pros and cons of tying these two things together and why it’s happened so much so far.
We imagine most of our listeners are pretty familiar with automation and a lot of the discussion around that. There are a lot of really good resources that you can dig up pretty easily if you are not. We’ll give a quick overview of what we are talking about when we talk about automation and basic income, but spend most of this episode talking about more of the discussion in how these two have been linked.
In terms of what we’re talking about when we say that many jobs could be a threat, there’s, for instance, a study that came out of Oxford that 47% of jobs are at risk of being automated. There are other similar studies that produce results in that catastrophic range.
Jim: Right, and the idea that not only could automation replace a lot of the types of jobs that you more traditionally think about being automated, these more mechanical rote jobs, but as artificial intelligence gets more sophisticated and smarter, there may actually be a lot of mental work that becomes at risk of being replaced as well. Work done by doctors, lawyers, professions that in the past it really didn’t seem like there was any reason to be concerned around.
All this together creates this pretty terrifying specter of what the future might look like. That if most of the work that gets done today through paid jobs can be automated and will be automated, suddenly we are looking at the scenario where most jobs are gone, most people don’t have a path to paid employment, and therefore we need to do something radically different than what we have today, perhaps basic income.
Owen: Right, and a lot of the most prominent, most public advocates for basic income are people who come at it from an automation angle; Elon Musk, Mark Zuckerberg, Richard Branson, and the presidential candidate Andrew Yang.
Jim: Yes, I think you see, if you are just looking at media coverage, so often it is about these very high profile people who have spoken out in favor of basic income. At least with the view that they think we need basic income with this assumption that we’re moving towards that future that looks like that.
Because of that, because there has been so much coverage of it, because you do have these high profile folks who are talking about it or running for president on it, I think very often that just becomes this internalized idea that those have that these two things go together and that they are tied to one another. If you look at the online conversation, this is very, very common. What people post about on Twitter or wherever else, it’s saying, “Automation is coming soon, therefore, basic income.”
Owen: Right, and I find this anecdotally, I get the reverse a lot of the time where I start talking about basic income and someone assumes it’s because of automation. These two things are very intertwined right now, and there are good things and bad things about that. One good thing is it’s bringing a lot of urgency to the conversation. It would be a little strange if there wasn’t anything driving basic income to suddenly try to introduce this very radical kind of out of nowhere policy, but automation makes people think of it kind of naturally.
Jim: For me, the metaphor that I feel like fits really well here is the boiling frog one. You’ll often hear this in the context of climate change, but the premise is essentially that if you take a frog and you put it in a pool of water, it will sit there. If you gradually crank up the heat on that water, the frog just sits there. Because it’s a gradual increase, it’s always just like, “Okay, I’m just chilling here,” and you can keep doing that up until you cook the frog.
In contrast, if you suddenly increase the temperature a lot, that’s a shock and a jolt, and it causes the frog to hop out. With the challenges that we’re seeing in our economy, there’s so much that’s already not working for people that I think many of us in the basic income space feel that regardless of what happens with automation, we should have basic income today.
But because those things have gradually gotten worse and worse over time, there has never been that big push, certainly at least in DC, to pursue a policy of the magnitude of basic income. Automation suddenly creates this image of change so drastic, so incredibly different than what we see right now that it kind of knocks people into this headspace of, “Oh, wait, we do need to rethink so much stuff.” So it has that effect of creating that temperature spike that jolts people into a different headspace here.
Owen: Yes, and I think that is one of the hopes of the automation conversation is that people get the jolt and then you can maybe then take a step back and say, “Well, we can also look at how much economic insecurity there’s right now.” There’s that widely-cited stat of about half of American families can’t afford an unexpected $400 expense. Once you start talking about that and you see the research on cash transfers, then maybe we can bring some of these people along into the wider, “Let’s just do this regardless of what happens with automation discussion.”
One more thing I will add on the pro side of the specter of automation is that I don’t see it as having a partisan lens right now. I think people of all stripes can see this as an issue that’s coming. We’re talking about this as a rhetorical thing, but it is true that automation may– it already is, probably, and certainly could have drastic effects on our economy going forward and that affects Democrats as well as Republicans. I don’t think there’s one side saying, “This is going to happen,” and another side saying, “No, it isn’t.”
Jim: On a related note, I think that the advantage of these two being seen as tied together is if there’s suddenly a big incident of automation causing massive job loss all of a sudden, then if those are tied together, maybe there will be a natural response by elected officials to say, “Oh, okay, maybe we should pass the basic income now.” If that can be teeing up basic income as a response there, then maybe there’s a lot of value in that.
Owen: Yes, and I think the challenge for us right now is to get basic income into the zeitgeist enough that that is the response as opposed to something else I guess.
Jim: Besides the reasons that we should be tying this together, we wanted to talk a bit more about the reasons why tying this together could potentially have some downsides and could be dangerous when thinking about the long-term trajectory of basic income.
One is that if we are explicitly saying that when we have this massive job loss we need basic income, it’s setting basic income up as a response to a future threat rather than the response to challenges today. In that scenario, even though you could say, “Oh, we should do basic income now so we are ready for that point,” generally, that’s not the way a policy-making in this country works.
People pass things when they feel like they are necessary. So it could mean that we run up against some pretty challenging obstacles when thinking about how do we actually move policy to provide people with basic income forward if we’re saying, “We just need to be ready for this,” as opposed to, “We need this right now.”
Owen: Right, and I feel like that can be especially dangerous here because I think automation happens more slowly than people tend to think it does because it’s happening at different speeds in different ways across all different industries. It’s hard to have one moment where it’s like, before, automation wasn’t a threat and now it is, and it’s a headline in the news and everyone is talking about it. I feel like it’s much more at a local level.
I spoke to a candidate for governor in Michigan, who is no longer a candidate, but he was talking about how after the recession when a lot of car manufacturers lost their jobs, a lot of those jobs didn’t come back because of automation. So you have these kind of mini-moments, but I don’t think we have a broad national moment to point to. I think framing it as a future threat, you might not ever know the moment when that threat arrives.
Jim: I think another thing is, if your entire framing is that basic income is a response to automation, you risk occluding the other really, really important and good reasons why we should have basic income. A lot of the things we talked about in the past: the way that basic income would address racial inequities in our current system; the way that basic income could empower women in a way that’s not currently possible; the way that basically income could encourage more people to pursue the paths of lives they wouldn’t have otherwise had an opportunity to.
If the way that you talk about basic income is solely in that automation frame, it would be very dangerous that people just wouldn’t even appreciate those other things. Not only does it mean that you potentially lose those strong arguments, that may then affect the specifics of whatever policy ends up being proposed.
Assuming we do get to a point where people are ready to pass something here, if it’s being designed solely with the idea that, “Oh, automation is taking jobs from people who have them today, let’s figure out something to do about that,” as opposed to, “Let’s make sure that we design this program in a way that is achieving those other benefits that we think could be really transformative about basic income.”
Owen: Yes, along those lines, if you’re only solving for automation, then saying, “Okay, we have all these truck drivers who are making $70,000 a year plus benefits, and they just lost those jobs, but we’re just going to give them a $1,000 a month and not worry about them,” that doesn’t sound like much of a response. So you would probably have a good counter to say, “Well, we should do jobs training or something else instead.” I think only focusing on automation again leaves out all the good it can do, and it does seem like an insufficient response to widespread job loss.
Jim: If you are one of those truck drivers or anyone else that we talk about or think may be in a position where their job is at high risk of automation — admittedly, I think that doing more studies and getting more experience around what the specific response is — but it is very hard to accept some hypothetical idea that really puts your livelihood at risk.
That is something that– it just creates cognitive dissonance for most people when you say, “Oh, sure, you have a good job now, but five years from now, maybe a computer will be doing that, and you don’t have training, and you’re going to be in this terrible spot,” a lot of people won’t even listen to what you have to say after that. So you’re potentially setting up your rationale as one that immediately shuts down a lot of the potential reception that might exist out there for this idea.
Owen: Yes, and I guess another case where climate change is a good analogy and that it’s hard to have people understand a distant threat to themselves. Another way that this idea can make people kind of shut down or even get angry is that it feels like you’re surrendering to some inevitable future where the robots are coming and there’s nothing we can do about them. You hear people saying, “Well, couldn’t we just not build those robots? Couldn’t we design an economy that actually supports people?”
Those are worthy conversations as well, but I think again, it’s just leaving out all the reasons why a basic income would be completely transformative regardless or including the idea that automation could be coming for a lot of jobs. Where I’ve seen this most visibly for me is in the labor space, where people are saying, “You’re just going to let our jobs go away. You’ve already moved on from a world where we have these jobs.” And that gets people angry and makes people defensive.
Jim: I’ve heard a number of basic income advocates, when they’re presented with that argument that, “Oh, we can just choose not to automate,” they’ll say, “You’re saying you’re standing in the way of progress.” If you automate, it means you’re being more efficient. It means that overall you’re doing more with less, which should be a good thing.
They’ll say, “Look at history. Anytime you try to stand in the way of progress, it’s never actually worked out.” This is a bad approach to respond to automation, that they believe is very soon coming. I think that particularly now you’re actually starting to hear some proposals in how we might respond to that in a way that doesn’t actually respond against progress but does ensure that we are setting up workers and empowering people so that when there is potential for automation, it would only be done if it did leave people well off.
I think a great example of this is the recent proposal from Senator Elizabeth Warren where she says that corporations, publicly traded corporations should be required that 40 percent of their board seats are elected by workers of the company. It’s actually giving workers in this company a voice in how the company governance.
In that scenario, you can imagine it would be a lot harder for a company to suddenly say, “Oh, we’ve got this new tech that allows us to replace a million people. We’re going to go do it,” if those million people actually have chosen as some sort of leaders in company governance in a way where they have a strong say in the direction of the company. Maybe they figure out some sort of solution that moves towards that and also helps out the workers, but it’s a lot harder to then imagine this sudden shift where tons and tons of people are left with nothing.
Owen: Yes, and just continuing that example for a second: maybe the solution is, okay, we can’t stop technological progress as much as we’d like, but maybe those workers get an equity stake. I feel like that’s– a lot of what people just want is for the workers who are maybe getting screwed over in the future is to just give them a share of that pie because then it’s more okay if the money is not just getting siphoned up to just a handful of already very rich people who already own these companies.
Jim: The final reason why using automation as the rationale for basic income makes me nervous is that it sets up basic income as a policy that is against something. That this terrible thing that’s happening, therefore basic income, rather than basic income because this opens up this transformative world of possibilities for us.
The thing that comes to mind when I think about this is– let’s imagine a popular movement that could hopefully exist in the very near future, a big popular movement, millions of people involved advocating for basic income. What are the signs you’re going to see at those rallies? Is it going to be “Robots are coming, basic income now”? Or is it going to be “True freedom, racial justice, gender equality, therefore basic income”?
From my experience, I can’t think of a single movement that is really done in that oppositional way. I can think of a protest, but if we’re actually talking about this powerful grassroots movement that’s going to shepherd this policy into existence, it has to be about what basic income is for and not what it’s against.
Owen: I think automation works really well, it’s kind of the cherry on top of, “Here’s all the reasons why this would be wonderful and transformative and exciting for our society and also by the way it would help inoculate us against this potential future threat which is being discussed about a lot.” Just, “The robots are coming, and we need to rally against them,” I feel like that’s a difficult sell.
Jim: Right, maybe it’s a wake-up call, but I think as your raison d’être for basic income, I think there’s the challenges that we just laid out.
Owen: I feel like automation is such a part of this conversation, and we don’t need to shut that down or say that you’re wrong for talking about automation, especially because it is bringing a lot of people into the conversation. It’s just important to be conscious as an advocate for UBI or just someone who likes to talk about it or listen to podcasts about it that it is just one part of a real panoply of reasons to be talking about this.
Jim: Well, that’ll do it for this episode. Thank you to our producer, Erick Davison. If you liked what you hear, please do rate and review the Basic Income Podcast on Apple Podcast or the podcast service of your choice, and please do tell your friends about this. We are always looking for new listeners. We’ll talk to you next time.
The Alaska Permanent Fund, feat. Sen. Bill Wielechowski
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It’s easy to forget that one U.S. state administers a universal cash dividend and has for over thirty years. Alaska came into a windfall from leasing its oil lands in the late seventies and early eighties, and made the bold decision to invest the revenue in a sovereign wealth fund, which provides cash dividends to every Alaskan on an annual basis. Alaska State Sen. Bill Wielechowski joins the podcast to discuss the past, present and future of the Alaska Permanent Fund, and if it could be a model for the entire country.
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Episode Transcript
Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh. We have many, many times on this podcast brought up the Alaska Permanent Fund as really the only existing example of government-run universal income that exists today, certainly in the US and it seems to a large degree around the world, where people there, everyone in the state is getting this check every year that came from the oil money there.
But we haven’t ever really dived in deeply on what are all the dynamics that actually come into play with that? How does that work, and how did it come to be?
Owen: To delve into that, I got to speak with Alaska State Senator Bill Wielechowski, who is a big proponent of the fund and gave us an on-the-ground book on what’s going on in Alaska.
Jim: Here’s Owen’s interview with Senator Bill Wielechowski.
Owen: Senator Wielechowski, thank you for joining us on the podcast.
Senator Wielechowski: Thank you for having me.
Owen: Many of our listeners are familiar with the Alaska Permanent Fund, but just to ground us, would you describe the fund and how it works?
Senator Wielechowski: Yes, the Alaska Permanent Fund was set up in 1982. What had happened was, several years before that, we had discovered oil in Alaska in Prudhoe Bay. The state of Alaska got $900 million for the royalties from leasing that out. This was at a time when our annual state budget was around $125 million. They had spent all that $900 million within about six years.
The people of Alaska were frustrated, and they wanted to be able to put some away, and they wanted to be able to make sure that some of it went to everyday ordinary Alaskans because a lot of that money went to big special interests. It went to people who were politically connected. They created the Alaska Permanent Fund, and they put in 25% of all the royalty money that we get for our oil and gas. We have a tremendous amount of oil and gas in Alaska.
This is something that’s unique about Alaska compared to every other state in the country. We’re the only state in the country where the state actually owns subsurface rights. We actually own the oil and gas as opposed to a private landowner in say Texas, North Dakota, or California where if you happen to own a land, you’re a farmer, rancher, and you shoot and hit the ground and oil shoots up, you actually, the private landowner, own that oil. In Alaska, that belongs to the state, and it belongs collectively to everyone.
What better way to share that resource wealth than to pay it out in a dividend to every single Alaskan? That’s exactly what we do. Every man, woman, and child who is a resident of the state of Alaska — you have to be a resident for one full calendar year — you’re eligible for a Permanent Fund Dividend. It’s been as high as about $3,200 several years ago. This year, it’s projected to be about $1,600 per person. For a family of four, it’s a significant amount of income.
It’s done some really tremendous things in Alaska. We have the lowest income inequality in the United States, in large part because of the Permanent Fund Dividend program. It’s something that comes out in October once a year, and it just provides a huge, huge economic boost to our state. It provides a huge boost to people. Kids are going back to school. People use it for school supplies, for clothes, for food. Certainly, people go out and use it for big screen TVs and trips to Hawaii, but the studies and research shows the vast majority of it just goes to ordinary bills. Paying your bills and putting money towards college and education, food and fuel, which is very expensive in Alaska.
Owen: Yes, and that pretty much answers my next question, which was just what it means to Alaskans to have this money coming in every year. Because it’s not an income replacement by any means, but $1,000 to $3,000, it’s pretty significant.
Senator Wielechowski: It is significant. When you think about it, a family of four in Alaska makes around, an average family makes around $50,000 per year. If you’re getting $1,600 apiece, you’re looking at a pretty significant amount of money. That’s over $6,000. That’s like 12% of your annual earnings for the average family. Now, I represent a little bit lower income district. Probably the average wage in my district and in some of the nearby districts is maybe around $25,000 or $30,000.
For a family of four, and some of those families have much larger families, it’s a significant portion of their income. Obviously, it impacts people on the lower end of the income scale much more than people on the higher end of the income scale. To make a million dollars, you get another 6,000 bucks, it’s kind of peanuts. If you’re making $25,000 and you’ve got eight people in your family, which is not unusual for some of our families, including extended families, it’s a huge, huge income boost.
It really has helped elevate people, uplift people. We’ve heard stories about people, they save up, they wait till the Permanent Fund Dividend check comes around, and they’ll buy a car so that they can go out and get a job, and get work.
There’s district that I used to represent, 50% of the people don’t have cars. We don’t have the greatest public transportation system here in Alaska. It provides a huge amount of economic freedom for people. Some people save it up and put it in their kids’ college education fund. We’ve got programs that are set up for a local university here. You talk to many, many Alaskans, and they’ll tell you they paid for their college through their Permanent Fund Dividend.
A lot of people, it’s food and fuel. If you go out, particularly in rural Alaska, there are no roads to get there. It takes a plane from Anchorage, it can cost $700 to $1,000 round trip just to get to some of these villages. There is very little economic activity, if any. You have some villages where there’s 50, 60 people. There are no stores, there’s just no economy at all. A gallon of milk could cost you $11. A gallon of gasoline can cost you $7, $8, $10. Extremely expensive. It’s a matter of survival for a lot of people in rural Alaska to get the dividend check.
Owen: That’s fascinating. I have so many questions just about what those villages are like. I’ll try to stay focused here. You were getting into this, but it sounds like you’ve observed some ripple effects from the cash infusion. It’s not just a little extra money, it could mean maybe someone who’s able to then start earning more money because they’re able to, say, invest in a vehicle or something else or they’re able to go to school. It’s maybe the first domino of many in terms of changing people’s lives.
Senator Wielechowski: No doubt, it has a tremendous domino effect. There was a big debate when they started the program as to whether or not kids could get it. Ultimately, they decided that, well, parents could apply for their kids or guardians would apply for the children. Children do get it. Some parents will save up and use that for college. Other parents, they just can’t afford to do that. They’ll use that to go out and start small businesses.
I’ve heard stories about people who, they’ll pull up their entire family’s Permanent Fund Dividend check, and they’ll start a small business. They’ll start maybe a food truck, or they’ll go out and get a car and be able to have somebody go to work and earn money for the family. There are definitely domino effects that occur because of this. In rural Alaska, we have many people that live a subsistence lifestyle. There are no stores, there are no grocery stores, you can’t walk down the street or even drive your car and go to a grocery store.
A lot of people live a subsistence lifestyle. For them, it’s really important that they have maybe a snow machine which will enable them to get out and pick berries, or go hunting, or go fishing. Of course, you need gas to go and do that, to use your snow machine or your boat, for example. It really is just a matter of survival, because the prices are so high up there. You just can’t really comprehend the cost and how it is in some of these communities, some of these villages.
Owen: Just a logistical question: when children get the fund, does that go to their parents or does it– like a separate bank account or something?
Senator Wielechowski: If you’re under 18 in Alaska, then your parents go ahead and file for you. The parents ultimately decide where that money goes. This was a big, big debate when you go back and look at the historical minutes of creating the Permanent Fund. Some people thought kids shouldn’t get it and that it should just go to people over 18. Ultimately the decision was made. You know what? If you’re an Alaskan resident, if you were just born– in fact, we have a special provision, you have to live a full calendar year in the state of Alaska. If you are a child and you’re born on December 31, it says, then you’re treated as if you’ve lived in in the state for full year.
Part of that was just the recognition that kids are expensive and parents should be able to have access to that money. Like I said, some parents will use it for education savings. Others will use it for just basic food supplies, clothing, shelter, rent, to fuel, things like that.
Owen: The Permanent Fund is, as far as I know, the only program in the United States where the only requirement is to be a resident of the state. There’s no income requirement, there’s no disability or anything like that. Has there ever been a pushback from people saying this shouldn’t go to millionaires or some kind of requirement?
Senator Wielechowski: We have this debate every now and then. There definitely are some people that believe that, but it becomes fundamentally how do you look at what the Permanent Fund in Alaska is. I think if you were to ask most Alaskans, you may get a little bit different explanation or belief on what the purpose of it is. I think from my perspective, and I think the way many Alaskans will look at it, is it’s our ownership share.
We have these tremendous natural resources here in Alaska. The Permanent Fund is comprised of the royalties from mining from oil, from gas. You have these tremendous resources. It’s looked at like an ownership share. If you have a stock in AT&T, or Apple, or Google, for example, and you get a dividend, it doesn’t matter if you’re a millionaire, if you don’t have any money at all. It’s your ownership share.
I think that’s the way that most Alaskans look at it, is it’s my ownership share. I’m an Alaskan and I, through the Alaska constitution, own part of the resources. They belong to the to the state collectively, and I’m a resident of the state. It’s how we share in all our resources.
When you step back, and you say we’re going to start excluding millionaires, rich people, in which we don’t have a huge number in Alaska, then it changes the way the Permanent Fund is viewed in the state. It changes it more of from an ownership share to maybe what some people would perceive as an entitlement. I think in Alaska, we prefer to look at it, and I think it’s the better way to look at it certainly for us, as an ownership share.
Owen: It really does change the mentality around it when it’s not some people get it and some people don’t. Speaking of the politics around the Permanent Fund, just in the last year, the representatives in Alaska took some money out of the fund to pay for government. Can you just update us on the state of the fund? Is it under threat and just what’s going on with that right now?
Senator Wielechowski: The Permanent Fund is under threat. In fact, it’s been under threat since the very day that it passed back in 1982. There was a governor that ran– sort of the godfather of the Permanent Fund is our former Governor Jay Hammond, it was his vision. He termed out in 1982 and a new governor was elected, a guy named Bill Sheffield. One of his top priorities was actually to get rid of the Permanent Fund. He didn’t like the idea of paying out a dividend.
What we’ve seen over the years ever since we’ve had it is rich and powerful special interests have been chomping at the bit to get into the Permanent Fund. It’s this huge pool of money. Right now, every Alaskan gets, this year it’ll be $1,600 dollars every man, woman, and child. That doesn’t matter if you’re politically connected. It doesn’t matter who your mother or father is or your access to maybe some powerful political figure. If you were to change that and give all that money to government and allow the politicians to divvy it up, then who gets it?
Well, people more likely to get it are those who are very well politically connected. Those who understand how to use the political process to their advantage. Those who are big campaign contributors. They often somehow tend to benefit from these things. What happens is someone who’s rich and powerful, they’re able to come in and get maybe 1000 times what they would ordinarily get or more, a million times. Look at what government dolls out to special interest in terms of tax breaks and tax credits and just flat out giving money away. The rich and powerful who know how to use the political process get more money that way.
This has been a constant struggle in Alaska ever since the very day that the Permanent Fund Dividend was created. The rich and powerful, big special interests, have always wanted to get rid of it because they want to get more for themselves. It’s been a constant fight because the rest of the people are not as organized. They tend not to be as organized and as politically active. There’s been that constant fight.
In 1999, we were in a similar situation. We very dependent on the price of oil. The price of oil was down in ’99. There was talk about, “Hey, we’re going to have to start using the Permanent Fund to pay for government,” and they decided to put it out to a vote of the people. The oil companies spend millions of dollars and the big special interests Chamber of Commerce came in and spent huge amounts of money trying to convince people that we really need to start using the Permanent Fund for government.
The supporters literally spent millions of dollars. The opponent’s was just this ragtag group of people. They spent about $5,000. The opposition got 83% of the vote. 83% of Alaskans said no, don’t touch the Permanent Fund. Don’t use it for government.
Now we have a governor who’s just been hell-bent on getting into the Permanent Fund and cutting the dividends, slashing dividends. For the first time in history, he unilaterally cut the dividend. He vetoed the dividend. I sued him. I went to the Supreme Court, unfortunately, Supreme Court found in his favor. Then since then, so in 2016, 2017, and now 2018, the dividend has been cut. It’s been at the push of large multinational corporations, very wealthy special interests who want to get into the Permanent Fund and want to use that for government. They want to be able to have access to that money.
That dividend this year is supposed to be about 2,700, instead it’s going to be about 1,600. It’s a big issue politically. It’s going to be a big issue in the upcoming elections, and we’ll see what happens with that.
Owen: It is a live issue that gets a lot of play in your elections? You talk about it, I’m sure, but has it come up in governor’s race as well?
Senator Wielechowski: Absolutely. This year will be the first year where it’s going to be just a huge issue. It is probably one of the focal issues in this upcoming election cycle, certainly for governor, because you have a governor who made it really, his top priority was to cut the dividend. There have been Facebook pages that have started up and groups that have started up. The one thing about social media is it’s allowed everyday ordinary Alaskans to mobilize.
We had this one Facebook group that started up, it’s got about 18,000 or 19,000 members, which is a lot for Alaska. They’re opposing the cutting of the Permanent Fund Dividend check. There are small groups that start up, but it’s not like you’re a big corporation and you can assign a few people make $100,000 to go out and have an astroturf social media program. This is a small group of people.
If you go and you talk to the people on the street, if you go door to door, if you go to the local grocery store, go talk to people at town hall meetings, they’re very interested in this issue. This is a huge issue to them. The majority of Alaskans don’t support what’s happening. We’ll see how it plays out in the upcoming election.
Owen: Is this something that those of us in the other 49 states can help out with in any way or is it more your fight?
Senator Wielechowski: Well, we’re always looking for help. Funding-wise, we have some strict laws on how much money candidates can get from outside of the state, which I think is a good thing. There’s probably ways that people can help, and we’ve worked with some organizations outside that are interested in basic income and look at the Permanent Fund as a type of basic income. They’ve been helpful. They’ve come to Alaska, met with them, have had good discussions with them, and they’ve offered some help.
We’re always looking for help. We’re a small state. It’s just special interests here have an unbelievable amount of power. We have yet to truly organize the people to be able to stand up to protect the dividend. We’re fighting now.
Owen: The last thing I want to ask you is about Alaska as a model for other states and maybe the country as a whole. Even Hillary Clinton in her book after the election wrote that she was considering a program that she was actually calling Alaska for America where we use the public resources, create a fund and distributed dividend. Do you think that basic model would work anywhere?
Senator Wielechowski: I do. I do. Absolutely. When you think about it, in the United States, in Alaska, why would it be any different? The oil and gas, it belongs to all the people. If you’ve got oil and gas in the ground, there are certainly federal lands where there’s a tremendous amount of oil and gas and mining resources and timber resources — that belongs to all the people. It doesn’t just belong to a select small group of special interests, it belongs to all the people. Why shouldn’t you be able to take a portion of that and give it back to the people?
I think it would have a tremendously positive impact on the lives of potentially every American. Scale-wise, you have to work out how the numbers work, but this country is just unbelievably blessed with incredible natural resources, and they belong to all the people. I think we can probably work out a way to figure out how to share that with every American. Absolutely.
Owen: Well, is there anything else you’d like to add?
Senator Wielechowski: I have read and I believe the Alaska Permanent Fund Dividend program is one of the most successful political programs in the history of the United States, if not the world. You look at the polling, and I’ve seen what it does to the lives of tens of thousands of Alaskans. There’s just tons of research on it lifting people out of poverty and providing education and food and fuel and just basic things that you need in life to move on and providing a tremendous economic activity. It is something that I think has been tremendously successful. I don’t think anyone would disagree with that.
I think we need to figure out a way that we can take this, use this as a model and have it all around the country. Have it in the United States. I know it’s starting to pick up some steam, and we’ve seen other attempts and in the rest of the world. There’s some communities, now they’re talking about doing it in the United States. This is definitely an issue that’s worth moving forward on and worth fighting for. It’s been tremendously successful here. I don’t see why it could be tremendously successful throughout the country.
Jim: That was Owen speaking with Senator Bill Wielechowski of Alaska about the Alaska Permanent Fund.
Owen: I just found it was striking how much the dividend is incorporated into people’s lives. It’s just, say, $2,000 one time a year, but for some people in some families, it seems to be really deeply incorporated into their incomes and how they plan out the whole year.
Jim: I think that’s not necessarily unique to a universal income program. I think, oftentimes, any sort of social support program, at least one that’s visible to people, once it’s in place, it starts to feel natural, and it’s just something that’s there. I think given the conversation that often happens around universal income, and this idea that once we have this, “Oh my gosh, what’s going to happen? Will people stop working? Will they be buying all these terrible things?” These nightmare scenarios that people throw out there, even though they’re not based on evidence.
Actually seeing this immediate example of, “Oh, once you have this, it’s just there and life gets easier for people.” You have less inequality but it doesn’t actually look completely different or foreign in an ongoing way.
Owen: I also thought that Wielechowski really showed how versatile cash is. You’ve got these rural villages where you can’t even take a road to get there. You have to fly there, and they’re mostly hunter-gatherer type societies. They have very specific needs, and it’s not what you normally think of when you think of what cash can be used for. You think housing and food, but cash helps them in the same way that it helps a family of four in Anchorage, say. It helps you fill in whatever gaps who have, whether that’s milk and gasoline for the rural society or the school supplies maybe for Anchorage.
Jim: Right. Yet another example of how you can imagine if someone were to come in and at the state level be thinking about, “Okay, what are our support programs?” If they were to design some in-kind system, it’s very, very possible they might have overlooked some of these cases and come up with a solution that wasn’t actually the right one for a lot of people, whereas with cash, as you say, you have that versatility, and so everyone is able to figure out for themselves what they actually want to do with it.
The other thing that really struck me in the conversation was hearing more about the political dynamics that have happened over time with the Permanent Fund. The fact that there really has been, it seems like almost constant attempts to raid the fund by government over time, and it has actually, up until this most recent issue, has managed to defend itself against that because people did have that sense of ownership there. You can think of a few examples of other social programs that have managed to withstand outside attempts to disrupt them, but that seems pretty exceptional.
Owen: Yes, and it shows the popularity of the fund with the polls that have been done on it show that people are happy to have higher taxes to sustain the fund and that, yes, even when people in power want to take it down, usually the people rise up. Hopefully, that will happen again, because as Wielechowski said, it is under threat right now.
Jim: Right, and I am very curious to see what the results of this upcoming election will be and if that ends up being a referendum on this effort to raid it. If it does, I think that says even more. Letting us gain more insight into what something like this means there and extrapolate from that as to what the dynamics might be in other places.
Owen: Alright, that will do it for this episode of the Basic Income Podcast. Thank you to our producer Erick Davidson. Please subscribe on Apple Podcast or the service of your choice, and tell your friends about the show so we can bring in more people into this conversation. See you next week.
A New Basic Income Pilot in Mississippi, feat. Aisha Nyandoro
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Recently, we got a very exciting announcement from Springboard To Opportunities and the Economic Security Project: the two groups are collaborating to create the Magnolia Mother’s Trust. This program will provide an unconditional basic income to a small group of low-income African American mothers. Owen spoke to Aisha Nyandoro, who works with low-income women in Mississippi and will be leading the program.
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Episode Transcript
Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh. We had some big news come out recently in the basic income space. There’s a new pilot that’s being launched right now in the United States. This one is called the Magnolia Mother’s Trust. It’s going to provide $1,000 per month with no conditions to 15 low-income families headed by African-American women based in Jackson, Mississippi. They’ll be receiving those payments over the course of one year. The pilot’s being managed by Springboard To Opportunities, which is a direct service organization that’s also based in Mississippi.
Owen: To give us the lowdown on what this program is, how it got started, and what might come of it, I spoke with Aisha Nyandoro. She is the head of Springboard To Opportunities and is leading this project.
Jim: Here is Owen’s interview with Aisha.
Owen: Aisha, thank you for joining us on the podcast.
Aisha: Thank you so much for having me, Owen. I appreciate it.
Owen: To start, can you just tell us about Springboard To Opportunities? What its mission is and how it goes about achieving that?
Aisha: Yes. Thank you. Springboard To Opportunities is a non-profit based in Mississippi, but we do work in several states throughout the country. We are a resident service provider. We provide programs and services for individuals who live in federally subsidized affordable housing to help them achieve their dreams in life, school, and work. We take a holistic approach to service delivery. That’s anything from after-school programs, to workforce training, and job placement.
We really do pride ourselves on being radically resident-driven – that’s our tag – on being radically resident-driven and really listening to the families with whom we have a pleasure of serving and making sure that we are being responsive to the needs that they tell us that they have for their families.
Owen: That’s excellent. Very recently, Springboard To Opportunities made a very exciting announcement about the creation of the Magnolia Mother’s Trust. Could you tell us what that is?
Aisha: Owen, you have very few opportunities in life, I feel, to do something that you think is bold and big and take a risk where you really have a chance to just put everything you believe out there on the line. That’s what the Magnolia Mother’s Trust is for us. Just to give you a little backstory about how this came to be, for the last couple of years, I’ve really been torn with the reality that the work that we’re doing at Springboard, even though it’s awesome and amazing, it really was not helping us move the needle on poverty.
We really began to do some work in examining the policies and various things that are in place as it relates to our families and realized there was a disconnect between what they actually needed and the reality of what they were receiving. Over time and time again in conversations with our families, what it was that we kept learning is that they really just needed more access to cash. That there were very few opportunities for them to get cash without there being strings attached and for them to get cash that they could use for just whatever it was that they needed for their families. Not a voucher, not a subsidy, but cold hard cash.
About a year or so ago, I really started taking that idea and I’m like, “Okay. If we could give them cash, what would that look like?” That is from which the Magnolia Mother’s Trust was birthed. With that idea that if you just give individuals cash, for us primarily it will be women. That’s why it’s “Mother’s” because the majority of the individuals that we work with in our adult population are African-American women and their children. Really just saying what would it look like if we gave women money with no strings attached and really for us just focusing on that African-American population because that’s the majority of the individuals that we work with.
What innovations could come to light if individuals were not constantly kept in a sea of trying to just survive? If individuals really had what it is that they need to thrive, what could happen within these communities? What the Magnolia Mother’s Trust is going to do is going to give $1,000 per mother for 12 months to 15 individuals that live in federally subsidized affordable housing. For our population, that is a game-changer, because on average, individuals that we work with make less than the $11,000 annually. We’re talking about doubling someone’s income.
Owen: It sounds like– you probably have specific questions about what’s going to happen, but it also seems like part of the excitement is that it’s open-ended. You don’t entirely know what it’s going to mean.
Aisha: We have no idea what’s going to happen. That’s why it’s so exciting and also so scary. Because with this particular population, we have a lot of questions that we’re trying to answer simultaneously. We have the very basic questions of, what will they do with the money? What will the outcomes look like? Will this help individuals begin to free up their bandwidth and be more engaged in our local community and also engage within their own individual lives?
We have those very individual level questions at the very basic aspects of what we plan on evaluating. We also have some larger research questions as it relates to policy, really understanding what the infusion of cash would do for this population of individuals because, like I said, we’re dealing with individuals who are extremely low income, who live in a federally subsidized affordable housing.
They have vouchers. They have housing vouchers, they have SNAP, they have childcare vouchers in some instances. Really beginning to explore what cash does within those systems. That’s problematic because our social service system should not be set up so we’re so punitive where a very small influx of cash can really disrupt your lifestyle as you move towards economic self-sufficiency.
We have those questions as well, but then also on another aspect of it, we have questions as it looks, how will this redefine or define work? What individuals have an opportunity to look for jobs that are more fulfilling and look for opportunities that are more fulfilling rather than just feeling that they have to take a minimum wage job because they have that necessity to work? Really allowing folks to have more freedom and dignity to really look for opportunities that help satisfy their soul.
We have a lot of questions that we’ll be exploring over the course of the year with various partners. For us and for me, it’s really exciting that we have partners who are willing to go with us in uncharted waters and really explore what this means. That’s really exciting to have that level of trust with individuals that we partner with to do this work.
Owen: That uncertainty is why so many people are wary around the idea of basic income, that if you give people a housing voucher, you know what that’s going to be spent on. Whereas if you just give people money, then people’s imaginations can run wild, and that’s scary to the people who are maybe on the other end of that money.
Aisha: But why should it be? Why can’t we trust individuals to know what it is that they need for themselves and trust that if given the opportunity, they will do that? This idea of it being a scary notion, I get it, but in the very basics of it all, I really don’t understand what the rationale is in that fear.
These individuals that we work with, I can only ever speak for my population, the individuals that I work with are hardworking folks who are just trying to make it and who, unfortunately, they are constantly having to climb up a mountain just to live and exist. They know what it is that they need. I do not for one moment think that anyone is want to take this money irresponsibly with it.
If they do go get their nails done, their hair down, or whatever, to me, that’s a form of self-care, and that’s doing what you need to take care of yourself in that particular point in time.
Owen: Sure. It’s okay if people want to do that. Whenever anyone says, “Well people are just going to spend it on drugs and alcohol,” what I would like to say is, well, you’ve got some expendable income. Do you spend it on drugs and alcohol?”
Aisha: [laughs]
Owen: You’re working with African-American women. This is a small enough trial or experiment that you can be selective about– it’s not a randomized control exactly. You can take this separately or together: why African-Americans, and why women?
Aisha: Yes, a couple of reasons. For us, the African-American women aspect just really is a large part of the population that we already work with. The majority of the individuals within the communities that we serve, that’s our demography. That’s a very basic “why that population?”, but then also, for me, a much richer answer to why that population is one of the other pieces that I will love to see from this work is that we begin to change the narrative around women and social services within this country and really beginning to dispel that myth of the Welfare Queen. A lot of times when we talk about that nasty myth and that nasty ideology, it’s African-American women that we’re talking about.
For me, this really does provide an opportunity to really begin to rewrite how African-American women are viewed within this country and African-American women who live within poverty are viewed within this country who are really just trying to make it and who are trying to put in place the supports that they need for themselves and their families to actualize their dreams. That’s the first thing about African-American.
Then the other part is why mothers. Once again, it goes back to the demography of the population that we primarily work with. The majority of the individuals that we serve at Springboard are women, are mothers, and they are mothers between the ages of 25 and 44 with multiple kids who, once again, are trying to figure out how to survive and thrive, and how to raise their kids and how to keep themselves safe. They’re also at the same time while they’re trying to survive, they’re also dreaming about a greater future for themselves and a greater future for their families, and are really working tirelessly to try to make that dream come into fruition.
Owen: I’ve had a lot of conversations about race and poverty in our social benefits system. Some people say, let’s just talk about poverty, the color of your skin shouldn’t matter. Other people say, no these two things are inherently intertwined and you can’t ignore that. You’re getting into that in your last answer, but how do you approach that question?
Aisha: For me, it’s obvious. If folks have that idea of, why can’t we just talk about poverty without race? To me, that’s a whole lot of privilege rather than an answer. Think that you can have one without the other. Unfortunately, the two within this country are interwoven. We cannot have a conversation about poverty without talking about the systems that have systematically kept an entire population of people impoverished within this country. The two go hand in hand.
The systems and the policies that we have in place were designed with the understanding that we have serious issues with race. As that being the reality, since we have these serious issues with race that garner our social service systems, poverty and race go hand in hand. You can’t have one without the other. To me, it’s an asinine concept. If it makes you uncomfortable to talk about race in your conversations about poverty, you may need to do a little more homework in understanding.
Owen: Maybe along those lines, what appeals to you about basic income?
Aisha: So much appeals to me about basic income. To me, the most appealing aspect of basic income is the dignity that it would allow our families to have, not having to show up at an office and do paperwork to make it seem that you are trying to make yourself seem worthy for this hand out that’s being blessed upon you from this higher up. The ability to restore dignity to our families, that’s really exciting to me. This aspect that individuals will know when exactly is coming and what exactly it will be. That’s exciting because just the consistency of it is really exciting because so many of our individuals that we work with, the jobs that they have are hourly based jobs. With that, it’s not consistent from week to week or month to month. The inability to plan when you don’t know what your check will look like from week to week is really hard.
Just really allowing this consistency for our families, that’s really exciting to me. Then the other piece is, probably the most exciting of all of this, is really giving the breathing room that our families need to dream and to really think about possibilities, because, unfortunately, time and time again, what we are hearing and learning from our families is that their light is beginning to be diminished just a little bit because of the fact their life is so hard.
It’s really hard for me to envision a world where I’m not allowed the freedom to dream and where I don’t actually believe that my dreams could actually come true. Just allowing for the small moment in time for our families to begin to have the ability to dream again and to really put some steps into place to move towards those dreams.
Owen: Speaking of things that are maybe hard to imagine if you’re not living them, could you say a little bit about what it’s like to be on all these social benefit programs where you have to go in. How much time does that take, and how much of a burden is it on someone to continually re-up on these programs?
Aisha: It takes a lot of time. You could spend an entire day at your Department of Human Services office trying to get your SNAP benefits reinstated. It takes a lot of time as it relates to just this actual physical time of it all. Also there’s a lot of mental acrobats and gymnastics that’s required as well because you’re always trying to make sure that you are staying within whatever guidelines that exist for that particular service that it is that you’re receiving.
That’s all exhausting and time consuming, and you have to think about in a lot of instances are these individuals who may have to go to the Department of Human Services to get their benefits or something reinstated or to make sure that their benefits continue to be put in place. That is the time where you will have, in some instances, you have to take off work. If you were working that day, and we’re talking about folks who have hourly jobs, that’s a day where you may not get those wages. It’s a lot that just goes into all of that.
For us, what we have heard, and I keep saying we’ve heard because so much of what it is that we do is in conversations with our residents, with our families. We don’t do anything without their input. In a lot of times, so much of what we’ve heard from our families is really just the lack of dignity included with those situations of having to go to the Department of Human Services and try to help your caseworker empathize with what it is that you’re experiencing. All of those things are pieces where a little piece of your dignity is taken away.
Owen: Well, those are the questions I had for you. Is there anything else you’d like to add?
Aisha: Yes. We’re just really excited about the Magnolia Mother’s Trust. We’re excited that this innovation is coming out of Mississippi, that in a lot of times when you hear about Mississippi, it may not always be something positive regarding the state. We’re excited to be within this state piloting this innovation with extremely low-income African-American mothers. We’re excited about being a part of the guaranteed income community and having an opportunity to learn alongside all of the other amazing partners who are taking the bold risk and big leaps of faith to pilot guaranteed income projects around this country.
Jim: That was Owen talking to Aisha Nyandoro of Springboard To Opportunities.
Owen: I love how they’re really embracing the uncertainty of cash in this program and how she is so excited by the fact that we don’t know what’s going to happen to these women, these families. There’s good reasons to be excited because we have really ample evidence of just how effective cash is and how people, by and large, are quite responsible with it when they are given cash.
Jim: Well, and also how completely ineffective so much of the programs in Mississippi are. I thought– the thing here that I found most inspiring is that the rationale behind this is entirely based on Aisha’s firsthand experiences. She has been working with these people for years and has talked to them to really understand what is it they need to be successful. That is what drove her to this. It wasn’t coming from this kind of pie-in-the-sky, 10,000-foot-view of, “Oh, this should be some future system that we want across the country.” It was responding to a real direct need that she was seeing right in front of her.
Owen: Thinking about this also from the Economic Security Project’s point of view, I’m interested in how focused they are on narrative because 15 people, you’re not going to get a robust data set where you can have a control and all that, but you will get 15 really interesting stories. That, as we’ve discussed before, is such a huge part of bringing this idea into the broader conversation that we’re having.
Jim: Absolutely, that we keep running up against these so deeply ingrained myths in our culture. This idea of the “Welfare Queen” that is not based on any reality but was something that was concocted over time as a way of demonizing people who are receiving support and that Aisha sees this as a direct way to push back on that, that the stories we get here, if we can really lift those up and humanize the people who are receiving the support, that could act as a very visceral and emotional counter to those misconceptions.
Owen: Yes. So much of what she’s contrasting this program with is that support that these people are getting and how much of an emotional toll that it has on them and also that they have to spend the day at the benefits office proving that they are needy enough to get these benefits. Yes, very exciting and looking forward to seeing what comes out of this.
Jim: Yes, we’ll have to keep a close eye and see what stories do emerge.
Alright, that’ll do it for this episode of the Basic Income Podcast. Thank you to our producer, Erick Davidson. If you like what you hear, please do rate and review us on Apple Podcasts or the podcast service of your choice. And please, please do tell your friends about this. Any folks you know who you think might be interested in basic income. We’re always trying to reach new people. We’ll talk to you next time.
MacArthur Fellow Ai-jen Poo on What Basic Income Would Mean to Domestic Workers (Rebroadcast)
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Ai-jen Poo, Director of the National Domestic Workers Alliance, Co-director of Caring Across Generations, and MacArthur Genius Award recipient discusses the challenges faced by domestic workers in the U.S. and how a basic income could dramatically change things in that space.
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Episode Transcript
Owen: Hello, and welcome to the Basic Income Podcast. I’m Owen Poindexter.
Jim: And I’m Jim Pugh.
Owen: Our guest this week is Ai-jen Poo. She’s the executive director of the National Domestic Workers Alliance, recipient of the MacArthur Genius Grant, and co-director of Caring Across Generations. Welcome, Ai-jen.
Ai-jen: Thank you, great to be with you.
Owen: Why don’t you start by telling us about the National Domestic Workers Alliance and the work you do there?
Ai-jen: Sure. My work is alongside the millions of workers, mostly women, who go to work every day in our homes, and they care for some of the most important parts of our lives, our kids, our aging loved ones in our homes. They make it possible for millions of us to go to work every day knowing that our families are in good hands. Our work is really about making sure that this work is valued, respected, and protected, and, for the millions of workers who do this work, to be able to know that these jobs are good jobs with family-sustaining incomes and jobs that you can really take pride in and support your family on and one generation can do better than the next.
Now one of the things that started happening about five years ago is we started realizing that this workforce is growing at an incredibly rapid pace and that has to do with some pretty major trends in our demographics and in families and in our workforce.
To be clear about what those are, essentially the Baby Boomer generation which is this massive generation, culture-driving generation is aging rapidly at a rate of four million people per year turning 70 and also living longer than ever before because of advances in healthcare and technology. Then the Millennial generation which is the largest generation in history and most diverse, by the way, is also starting to have families of their own, turning 35, and having four million babies per year.
We suddenly need more care than ever before and therefore a stronger caregiving workforce. My work has been, especially now that we’ve launched this Caring Across Generations effort, it’s about creating the kind of solutions that allow for families to afford and have access to good care while making sure that the workforce that does the care has the respect and the kinds of quality jobs they deserve.
Jim: Can you tell us a bit about what are some of the biggest challenges that are facing domestic workers today?
Ai-jen: Sure. We still in the 21st century, have a hard time really treating this work as real work. It’s oftentimes referred to as help or companionship, and what that results in is this way in which this work remains in the shadows. Despite it being a real profession for millions of people, it’s treated as less than real work and that limits our ability to get access to the kinds of training and benefits and security that we deserve, and it certainly is reflected in the wages.
A lot of people don’t realize this, but for example, for the home care workforce which cares for the elderly and people with disabilities, the annual median income for a homecare worker is $13,000 per year. That is so far from a family-sustaining wage and so you think about these millions of workers who are working incredibly hard, doing incredibly important work, and earning poverty wages. That’s the lot for so much of our workforce.
Jim: Can you tell us a little bit about some of the campaigns that you’ve been fighting in order to really secure more rights and more economic justice for people in the space?
Ai-jen: Sure. Starting back in 2003 in New York, I started working on trying to create basic protections for this workforce in our nation’s labor laws. A lot of people don’t know this history but in the 1930s when we passed the labor laws that were a part of the New Deal, which are the cornerstone of protections that we all take for granted when we go to work, Southern members of Congress refused to support those labor laws getting enacted if they included domestic workers and farm workers, which is a part of a very dark history of racial exclusion in this country.
To this day, many of those exclusions remain. In the early 2000s, we set out to try to transform those exclusions and put real protections into place, state by state. We had our first big victory in New York where we passed the first Domestic Worker Bill of Rights in 2010, and now seven states have passed legislation. But I will say that just having the minimum standards on the books is far from enough to make these jobs, good jobs.
That’s why we launched Caring Across Generations five years ago to bring together all of the family caregivers, our seniors who need support in order to live independently, people with disabilities together with the workforce to say, “We need a whole new investment in caregiving in this country that allows for people to actually afford care, because it’s quite expensive, and that allows for these jobs to be really good jobs.”
Right now, we’re fighting for what we call Universal Family Care in the state of Maine and Michigan, which is essentially the idea that every single working family should have access to economic support to afford child care, elder care, and paid family leave. That would enable them to go to work and fully participate in the workforce and reach their full potential without having to choose this horrible false choice between work and family. In the 21st century, it just feels like we really need that. In Maine and Michigan, we’ve got this really exciting campaigns for universal family care.
Owen: Perhaps along those lines, you signed the belief statement for the Economic Security Project saying that we should explore basic income to guarantee economic security for all people. What motivated that decision?
Ai-jen: Well, I’m really passionate about the idea that most of the social contract that we have in place and the policies and systems that support our democracy and our economy to work properly are policies that were born of a very different age. A time when our economies were locally based, regionally based, and nationally based whereas now, it’s a globalized economy. A time when manufacturing was the base of this economy and now it’s very much a service driven economy.
So much has changed about the way that we live and work in this country. I think we need a new framework for and we need to rethink our social contract at its core to be reflective of the realities facing working families today in this country. I believe it entails a new set of universalisms. Social insurance programs like unemployment, for example, were created at a time when people had stable long-term employment and intermittent periods of unemployment.
The whole framework were set up to support that need of intermittent unemployment. Today, in more and more places, what we’re seeing is periods of long-term unemployment and intermittent and temporary employment. We need a different safety net and a different framework for thinking about meeting those needs in the economy.
For us, we’re obsessed with caregiving because we’re just seeing how we’ll never get to gender equality in the workforce, we’ll never get to a place where workers, men and women, can really realize their potential in our economy if they’re constantly being forced to make impossible choices around caring for the people they love and going to work. We think that’s a really big piece of the puzzle too, and universal basic income, universal family care, like a new framework for workers to have a voice, these are all pillars that need to be redesigned.
Jim: On that note, can you tell us a bit more about what impact do you think the universal basic income might have on the domestic worker space?
Ai-jen: I think part of it, it’s similar to family care whereas we live in such insecure economic times in that more and more workers are dealing with jobs that are temporary, part-time, independent contracted. There’s much less of the stable long-term employment as I mentioned. What that means is that you’re really living paycheck to paycheck and really struggling, and you’re on the brink.
Anything could go wrong: a car accident, a stroke in the family, any number of things could go wrong and create a kind of crisis that makes it impossible for you to then restabilize. It can trigger a spiraling of economic insecurity and into poverty that’s incredibly difficult to get out of. What something like family care support or basic income can do is make what should just be a temporary moment of need, keep it a temporary moment of need as opposed to a long-term crisis.
Owen: You mentioned before that the population of people in need of domestic workers is rapidly increasing. Do you see other changes in the domestic worker space these last few years and going forward into the future?
Ai-jen: There are so many changes. Already the Bureau of Labor Statistics says that home care aides, home care workers are the fastest growing occupation in our entire economy and the estimates are that by the year 2030, if you take all of the workers who are providing child care in different settings and all the workers who are providing elder care and support for people with disabilities in different settings, that that combine will be the single largest occupation in our entire economy.
We’re talking about the care economy, far from being marginal and in the shadows. It’s actually going to be defining of our entire economy. We all have a stake, beyond the fact that we all have families and we all want to work, we all have a stake in this work becoming dignified life-sustaining work because it sets such a huge tone for the rest of our workforce.
I’m of the belief that, in the ‘20s and ‘30s manufacturing jobs were dangerous, low paid, precarious jobs. We collectively as a country transformed those jobs into good jobs with the pathway to real economic security and stability. Our task of the 21st century is to look at the low-wage service jobs like care jobs and actually do the same and make the same transformation happen. We’ve done it before, we can do it again.
Jim: Ai-jen, you mentioned that universal basic income would service one pillar in a larger new social contract that we could be moving towards. Can you tell us a little bit more about what else would be part of that contract, and also how you’re thinking strategically about moving towards it?
Ai-jen: Absolutely. I think that universal basic income, universal family care, this idea that every single working family would have some economic support to afford child care, elder care, and paid leave when they need it to care for their families, and portable benefits and three ideas that really deserve some oxygen and some real resources behind pilots and demonstration projects. They’re at the level of ambition that is appropriate. We’ve got some major challenges in this country with unprecedented levels of inequality, and I think we need bold solutions.
I also think of really important piece of this is going to be worker voice. We have a situation in our economy where 75% of the workforce earns less than $50,000 per year and meanwhile there’s so much wealth being generated. We have to figure out how workers have more of a voice and can share, where more workers can share in the prosperity that we’re collectively generating as a nation.
That has to do with voice, it has to do with having new forms of organization like ours, the National Domestic Workers Alliance. There’s lots of groups out there that are experimenting with different kinds of organizational forms to give voice to working people.
Owen: I’m wondering as the domestic worker population increases and as there’s more urgency around these issues if you’re finding that they get more attention or if that’s not happening yet?
Ai-jen: Great question. To some extent, it is happening partly because our movement is growing and partly because more and more families are really struggling with the need for care, whether it’s childcare or elder care. So more people are feeling the burn and the need in a way that feels right there at the surface.
I also think that the fact that more women are in positions of leadership in the private sector and in government can give voice to the challenges of doing work and having ambition and having responsibility in wanting to contribute in the workforce and then not having the support we need at home for our families. That’s becoming more and more a part of the conversation. We saw that during the election cycle in 2016. I think we’re going to continue to see that.
Jim: Those were all the questions that we had, but anything else you’d like to add?
Ai-jen: I will say that one of the things that is really important to me is in this period of a lot of political polarization and change that we preserve the space for big bold ideas like the universal basic income and universal family care and portable benefits. These are all ideas that need oxygen and resources to become real. We need to take them to their next level.
We don’t have everything figured out, but we need to start building from the ground up, which is why we’re really excited to be championing these campaigns in Maine and Michigan and folks are doing amazing work on the ground building constituencies behind these ideas and why I’m excited to be a part of the Economic Security Project.
Jim: Great. Well, thank you so much for chatting with us.
Ai-jen: Thank you.
Owen: That was Ai-jen Poo, executive director of the National Domestic Workers Alliance, recipient of the MacArthur Genius Grant, and co-director of Caring Across Generations on the Basic Income Podcast. Also, thank you to our producer, Erick Davidson. See you next week.
The District of Columbia recently commissioned a study on various ways to address poverty, including a negative income tax and a minimum guaranteed income. Jim and Owen spoke with DC Councilmember David Grosso, Council Budget Director Jen Budoff, and the two primary authors of the study, Susanna Groves and John MacNeil, to discuss the findings of the study and its implications.
How UBI Was Added to the California Democratic Party Platform, featuring Rocky Fernandez
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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 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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Episode Transcript
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.
Y Combinator's Basic Income Study, featuring Elizabeth Rhodes
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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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Episode Transcript
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.
Basic Income Q&A: Inflation, Predatory Lending, and the Meaning of Work
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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.
Basic Income and the Disabled Community, feat. Annie Harper
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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.
