Washington Wednesday: Universal basic income

MEGAN BASHAM, HOST: It’s Wednesday the 13th of November, 2019. Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Megan Basham.

MARY REICHARD, HOST: And I’m Mary Reichard. It’s Washington Wednesday.

Universal basic income, UBI. That’s an economic model that guarantees a certain level of income. 

Proposals here in the United States vary, but in its full form, UBI involves the federal government giving each citizen a sum of money. 

And the word “universal” means the money goes to people regardless of how much they work or contribute to society.

BASHAM: This idea has taken root on the Democratic campaign trail. 

One candidate, Andrew Yang, has made UBI a cornerstone of his campaign. It’s made him flush with cash, while more accomplished candidates are struggling to raise enough money to keep going.

CBS: On Wednesday Andrew Yang’s campaign announced a third-quarter fundraising haul of $10 million. That’s more than three times the amount he brought in for quarter 2.

Yang at least doubled the third-quarter fundraising of 16 other candidates. 

What he calls the “freedom dividend” proposal is a big reason why. It’s really UBI by another name. Yang wants the U.S. government to give every American adult $1,000 per month. That’s $12,000 per year—as long as you’re not incarcerated.

YANG: If you look at what’s happening in America today, a mindset of scarcity has swept most of the country… Now if you put $1,000 a month into the hands of American families, what you see very clearly in the data is you see an improvement in child nutrition and health, you see an improvement in graduation rates, you see an improvement in mental health, you see lower levels of domestic violence, you see lower hospital visits…

REICHARD: Yang’s “freedom dividend” would cost some $3 trillion and require massive tax increases. And it may sound far-fetched. But other candidates are proposing similar policies, albeit more modest.

For example, New Jersey Senator Cory Booker wants to give every newborn $1,000. He calls it a “baby bond.” 

Meantime, the city of Stockton, California is experimenting with UBI. Stockton is a city of more than 300,000 people. So it’ll be worth watching what happens there. 

Here now to talk about it is Hugh Welchel. He’s president of the Institute for Faith, Work, and Economics. 

Hugh, it’s great to have you on the program again.

WELCHEL: Thank you. It’s good to be back.

REICHARD: Well, Andrew Yang is out there making the case for why universal basic income makes sense. He points especially to the era of automation that we’re in right now. And clearly his proposal is grabbing some attention. What are your thoughts? 

WELCHEL: Yeah, it is very interesting. And he’s not the first one. This has been an idea that’s been around for some time. In fact, Thomas Moore mentions it in his 1516 book Utopia. So it’s been around for 500 years. I think probably one of the most interesting examples: Richard Nixon. Believe it or not, his administration studied the idea and tried to get it through Congress and failed. 

REICHARD: Did not know that. What does history tell us about experiments with universal basic income? 

WELCHEL: Most of the time it’s been tried it’s not been successful, for a number of different reasons. And I think people today say it was just the wrong timing—good idea, wrong time. And they’re arguing today that the time is right to try it. 

And I’ll be honest with you, when I first heard it, I thought, well, that’s a very interesting potential program that might do some good. It’s fascinating because both sides of the political spectrum are very interested in it. On the more liberal side, they see it as a social justice issue—a way to combat poverty and inequity, and redistribute wealth. So they like it. 

On the conservative side, they seem to like it because they see it as a way to reduce or eliminate bloated government, social welfare programs. So there’s a little bit for everyone to like. So it’s a very interesting proposal. 

REICHARD: Well, it is interesting. And as Christians, we certainly don’t want people to live in poverty, but how does this concept fit with what we see in the Bible? I’m thinking of 2 Thessalonians 3 where it says, “If a man does not work, he should not eat.”

WELCHEL: No, that’s exactly right. And really if you look at that passage, the emphasis is really on that man who doesn’t want to work. It’s someone who doesn’t want to work. It’s really not talking about people that have lost their job or looking for a job, people unemployed, that are actively seeking work. It’s really—in the Greek text, that it’s people that are unwilling to work. 

Now the reason he says this is very interesting, and I think it goes back to the Old Testament and really to the book of Genesis. Because if we go back and look at the creation story, we see that man was made to work. We see in Genesis 2 it says God put Adam in the garden to work it and to take care of it.

So we’re here to do work that brings flourishing to God’s creation. And I would argue all work is really designed to do that.

The problem is we have kind of corrupted this Biblical view of work—if you go back to the first century, there were two views of work, two cultural views of work. One was the Greek view, which basically said work’s bad. Leisure’s good,

The flip side of that was the Hebrew view of work and it kind of grows out of the Old Testament understanding of work. And that basically said that all work is good work. 

In fact, this picture you see of God in the very beginning, creating the heavens and the earth, he’s working. It’s a picture of God with his hands in the dirt, making something, actually making something out of nothing. We can’t do that, but he expects us to make something out of something he’s given us. 

So, that’s what work is about. And so you take that away what are you left with? 

REICHARD: Right, that’s the kingdom view of work and the purpose of man. Well, Hugh, I want to get back to what we began with here, which is universal basic income. We needed the kingdom basis for how to think about this. 

So I want to ask you now: we’ve seen the official unemployment rate drop to historical lows; we’ve also seen an uptick in the labor participation rate. Now that’s a government number measuring how many eligible adults are in the workforce. And it’s above 63 percent right now. So that’s good news. 

But could universal basic income take away incentive for young people especially to join the work force? 

WELCHEL: Yeah, it’s really hard to say, and it really depends on how you set it up. For example, a guy named Charles Murray, he suggested a plan where everyone would be given $13,000 a year. And out of that $13,000 you’d have to take $3,000 of it and use that to buy your medical insurance. 

Now, I don’t know many people that’d be satisfied living on $10,000 a year. So, obviously, there would still be a lot of incentive for people to work and continue to work. But there are other people talking, you know, $30-35,000 a year to certain people in certain circumstances. That would be enough for a lot of people just to go to the beach every day. And I think that not only has some tremendous negative implications to people personally, but to society as a whole. 

REICHARD: There was a recent poll by Hill/HarrisX found 49 percent of registered voters support some kind of “government-issued living stipend.” That’s up by 6 points since the last time these pollsters asked the question, in February. So again, this idea seems to be gaining traction. How can Christians talk about this issue in a helpful way within their circles of influence?  

WELCHEL: Yeah, I think what we have to do is take the long view and really begin to talk to people about the importance of work and really kind of this Biblical view of work. 

It’s interesting if you read in the book of Ecclesiastes, in the third chapter, it says this, “What does the worker gain for his toil? I know that there are, there’s nothing better for man to be happy and to do good where he lives, that everyone might eat and drink, find satisfaction in his work. It is a gift of God.”

And I think Paul echoes that in Thessalonians when he says, make it your ambition to live a quiet life. You should mind your own business and work with your hands just as we told you so that your daily life might win the respect of others, and so that you would not be dependent upon anyone. 

That Biblical view is very different than what we’re talking about is the government’s gonna take care of everybody. At the end of the day this is just really one more way to redistribute wealth. And I think there’s a lot of misunderstanding about wealth redistribution and why we should do it and why or maybe why we shouldn’t do it. 

We’ve written a lot about that here at the institute and if you look at the top 20 percent of wage earners against the bottom 20 percent—if you just look at what they made—there’s a 17 to 1 difference, between the top 20 percent, bottom 20 percent. Look at the bottom 10 percent, goes up to 60 to 1. 

And so a lot of people use those statistics to say we’ve got to even the playing field. But the problem is, they’re not telling you the whole story, because that does not take into account taxes, nor does it take into account the incredible amount of wealth distribution we do through welfare. 

Now, when you take the taxes away—and the taxes are mainly on that top half—and then you add the welfare back in, which is at the bottom of half, it drops that 60 to 1 down to 3.8 to 1. 

And so, you know, they say the numbers don’t lie, but you have to be careful with the way people use numbers. So one of the things we talk a lot about is that this huge need to redistribute wealth in the United States is not as big as a lot of people would like you to believe.

REICHARD: Hugh Welchel is the president of the Institute for Faith, Work, and Economics. Hugh, thank you for your time today.

WELCHEL: I’m glad to be here.

(AP Photo/John Minchillo) Democratic presidential candidate entrepreneur Andrew Yang participates in a Democratic presidential primary debate hosted by CNN/New York Times at Otterbein University, Tuesday, Oct. 15, 2019, in Westerville, Ohio. 

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