Can an unconditional basic income end poverty once and for all?

Chicagoans rallied outside a Wal-Mart store on Black Friday to protest the company's employment policies. [Photo by Bob Simpson]

Chicagoans rallied outside a Wal-Mart store on Black Friday to protest the company's employment policies. [Photo by Bob Simpson]

Often journalists write about raising the minimum wage for low-skill workers and the unemployment of workers displaced by technology as though they’re separate issues. Case in point: McDonald’s workers seek hourly pay increases while Chicago Transit Authority workers lose middle-class jobs to technology upgrades.

But could there be a solution that helps both of these groups of workers? An article in Bloomberg Businessweek magazine suggests there may be. The article, with an abridged online version, presents the idea of an unconditional basic income as an answer to poverty more long-lasting and comprehensive than any adjustments to the minimum wage.

“One up-and-coming solution is what advocates term unconditional basic income — an annual grant of fixed size that goes to every person in a county, rich or poor, regardless of whether they work or not. It’s a big step away from the minimum wage,” the article’s authors write.

The country’s inequality gap is at an all-time high, with the United States boasting the world’s worst income inequality in the developed world, according to an August 2013 study by economists from Oxford University, the London School of Economics and the Paris School of Economics.

Though the Bloomberg article says raising the minimum wage would go some way toward helping the lowest paid workers, such a move wouldn’t help those affected by unemployment. Nor would it keep companies from pushing the cost of an increase in wages onto consumers, the authors argue.

There are several understandings of what a basic income is, and how it would work. The European Citizens’ Initiative for an Unconditional Basic Income describes a basic income as being made up of four criteria: “universal, individual, unconditional, high enough to ensure an existence in dignity and participation in society.”

Bob Bruno, a professor at the University of Illinois’ School of Labor & Employment Relations, points out that the call for a basic income in the United States has a historical basis. In fact, Richard Nixon pushed for a guaranteed income, which he suggested would eventually eliminate the need for a welfare state, Bruno said. Nixon called the proposal a “Family Assistance Plan.” It would serve to “build a foundation under the income of every American family with dependent children that cannot care for itself,” said Nixon in 1969, only months into his presidency. 

These days, a push to increase the minimum wage is discussed with much more frequency than a guaranteed income. Low-wage workers strikes led by the Fight for $15, a proposal by President Barack Obama to bring the federal minimum wage above $9 an hour, and state-level movements have all contributed to record levels of public support for raising the minimum wage, Bruno said. 

In fact, said Bruno, the clear economic case for raising the minimum wage, and the growing movement in support of it, means he expects to see a federal bill to raise the minimum wage by the end of Obama’s term. “America is trying to build a 21st century, first rate economy on poverty wages,” he said, an unsustainable plan.

Does this mean anything for a universal basic income, either on a federal or state level?

Jacob Swenson, a Chicago-based member of the steering committee for People’s Lobby, a progressive lobbying group, said the push for a minimum wage holds a seed of hope for eventually organizing for more comprehensive solutions to poverty, such as the universal basic income.

“We decide what is politically viable,” he said. “The talk we are seeing about a minimum wage could break out to something like proposals for a universal basic income, if progressive candidates and groups are willing to create the interest.”

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