Coronavirus revives talk of universal basic income for cratered economies

The mocking idea of ​​paying everyone a basic income while machines take people’s jobs is resurfacing as a possible remedy for the savings cratered by the coronavirus pandemic.

Bashed until recently as too costly or too “socialist”, paying people just because they are alive and confident that they will be productive has new support as jobs disappear.

The massive stimulus package envisioned in the US Congress to compensate for the huge blow to the economy would take another step towards the idea of ​​”universal basic income”.

Aspiring Democratic presidential candidate Andrew Yang defended him on the campaign trail, even though his opponents and economic experts dismissed the idea as idealistic and impossible to finance.

Now, with the US economy paralyzed as people lean in their homes, the likes of Republican Conservative Senator Mitt Romney raise the idea.

UBI has been tested in the city of Stockton, in northern California, for about a year, with 125 residents of an economically disadvantaged community receiving monthly payments of $ 500 each to see if it helps reduce poverty. .

Stockton is in a part of the state dominated by agriculture, and the city was so devastated by the 2008 financial crisis that it declared bankruptcy.

Preliminary results indicate that people participating in the UBI experiment spend about 40% of the money on food.

Single mother Lorrine Paradela was able to cut two jobs to one and manage unexpected expenses such as car problems.

“It’s a huge help,” said Paradela of the UBI program.

“This money has given me some peace of mind.” She remembered going home after having worked two jobs, her mind turned on, the bills to be paid and the constant pressure to earn more money.

“Sometimes I went shopping for food but only for my children, not for me,” said Paradela.

According to Mayor Michael Tubbs, Stockton’s UBI program shows that a small increase in income can make a huge difference for people on tight budgets.

“I think in the long run we will see well in terms of people living longer, living happier, less sick, more productive and more able to do whatever you need for society to thrive,” said Tubbs. to AFP.

The UBI program in Stockton is supported by an economic security program created by Facebook co-founder Chris Hughes.

Ideas from the project include rebuilding the middle class by providing allowances to increase the incomes of American households earning less than $ 50,000 a year.

The cost of living in California is so daunting that workers cannot live on a monthly salary of $ 1,000, said Steve Smith, spokesperson for a federation of unions.

One in three American workers is at risk of losing their job to technology in the next 12 years, said Yang.

“To avoid an unprecedented crisis, we will have to find a new solution, unlike anything we have done before,” said Yang during his campaign.

His remedy began with an “unconditional” UBI for all American adults.

In a recent interview with National Public Radio, Yang said the economic impact of the coronavirus pandemic has prompted many politicians and analysts to reconsider their opposition to the UBI.

“It completely muddled and transcended the party lines where Republicans enthusiastically took money directly to the Americans,” said Yang of the UBI.

“Which is obvious and, frankly, the only action we can take that could prevent our economy from collapsing into a new Great Depression.”

However, checks sent as part of the emergency assistance plan would involve a temporary measure, while the actual UBI would be permanent and costly to the government.

Public money should be spent more wisely, with the trend away from tax giveaways for the wealthy argued by supporters of the UBI.

“I haven’t always been a fan of universal income,” said Edward Alden, senior fellow at the Council on Foreign Relations.

“But, its irresistible virtue is its simplicity. It brings money to people in need, and to the economy at large, faster than any other alternative.

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