By Zaid Jilani
July 16 2018, 11:00 a.m.
CHICAGO
ALDERMAN AMEYA PAWAR is worried about the future.
He is concerned that a coming wave of automation could put
millions of people out of work and result in more extreme politics.
Pointing to investments in autonomous vehicles by
companies like Tesla, Amazon, and Uber, Pawar observed that long-haul
trucking jobs, historically a source of middle-class employment, may become
obsolete. More people out of work means more political polarization, says
Pawar.”We have to start talking about race and class and geography, but also
start talking about the future of work as it relates to automation. All of this
stuff is intertwined.”
Balich And Fricilone from Will County say get out and vote for good Candidates that do not support this
Before leaving the race after being outspent
by two billionaire
candidates, Pawar campaigned for the Illinois Democratic Party’s
nomination for governor. One of the themes of
his candidacy was that politicians were scapegoating various racial or
ethnic groups for their constituents’ material problems.
“You know, the British pit Hindus and Muslims against one
another,” Pawar told The Intercept at the time, drawing on his Indian-American
heritage. “Pit people against one another based on class and geography, caste …
this is no different. Chicago versus downstate. Downstate versus Chicago.
Black, white, brown against one another. All poor people fighting over scraps.”
Pawar now believes that a wave of mass
automation will only compound this problem.
“From a race and class perspective, just know that 66 percent of
long-haul truck drivers are middle-aged white men,” he observed. “So if you put
them out of work without any investment in new jobs or in a social support
system so that they transition from their job to another job, these race and
class and geographical divides are going to grow.”
Pawar thinks that one way to battle racial
resentment is to address the economic precarity that politicians have
used to stoke it. He has decided to endorse the universal basic
income — an idea that has been picking up steam across the world.
The UBI is based on a simple premise: People don’t have
enough money to provide for their essential needs, so why not just give them
more?
UBI schemes entail giving a standard cash grant to
everyone — regardless of need. Traditionally, the United States
has addressed poverty by delivering in-kind goods. For instance, the
Supplemental Nutrition Assistance Program, formerly known as the food
stamp program, issues electronic cards that can be used to purchase
certain types of food.
But some economists have countered that simply
giving people money is more beneficial.
Research shows
that cash transfer programs are more efficient overall, as they
sidestep the administrative costs of distributing in-kind goods. The
theory is that people know their own needs and can allocate money more effectively
than the government. Moreover, the hope is that because UBI is a universal
initiative, it will avoid some of the stigma associated with need-based
programs, which have historically been criticized as handouts to the
“undeserving” poor.
Pawar recently introduced a pilot for a UBI program
in Chicago. Under his program, $500 a month would be delivered to 1,000 Chicago
families — no strings attached. Additionally, the proposal would modify
the Earned Income Tax Credit program for the same 1,000 families, so they’d
receive payments on a monthly basis instead at the end of the year — a
process known as “smoothing” that enables families to integrate the tax credit
into their monthly budgets.
The proposal also leaves room for the creation of a
Chicago-specific EITC program.
Pawar has convinced the majority of Chicago lawmakers
to co-sponsor the plan, and he is hoping that the Chicago City Council will
soon work with the mayor to implement it.
My legislation calling for the creation of a Chicago #UniversalBasicIncome pilot has 36 co-sponsors! On to the Commitee on Workforce Development and Audit. Committee chair @40thWard is also a sponsor. More soon! #UBI
My legislation calling for the creation of a Chicago #UniversalBasicIncome
pilot has 36 co-sponsors! On to the Commitee on Workforce Development and
Audit. Committee chair @40thWard
is also a sponsor. More soon! #UBI
“Nearly 70
percent of Americans don’t have $1,000 in the bank for an
emergency,” Pawar told The Intercept. “UBI could be an incredible benefit for
people who are working and are having a tough time making ends meet or putting
food on the table at the end of the month. … It’s time to start thinking about
direct cash transfers to people so that they can start making plans about how
they’re going to get by.”
SIMPLY
GIVING PEOPLE money so they can cover
their expenses seems like a radical idea — especially in
America, where individualism and personal responsibility are
considered chief virtues, and the notion of getting something for nothing is
scorned. But there’s an easy rejoinder — at least to those skeptics who doubt
UBI because they think the money will be squandered on nonessential goods.
UBI-style direct cash transfers have been implemented elsewhere. And they work.
One of the most
effective anti-poverty programs in the 21st century is Brazil’s
Programa Bolsa Familia. Deborah Wetzel, a senior staffer at the World
Bank, called the program a “quiet revolution,” noting that
PBF “has been key to help Brazil more than halve its extreme poverty —
from 9.7 to 4.3 percent of the population.” Moreover, the
program also helped to shrink income inequality by about 15
percent, says Wetzel. One study by
the Inter-American Development Bank noted that the program cost about 0.5
percent of the gross domestic product of Brazil, but was credited with reducing
the infant mortality rate caused by undernourishment and diarrhea by more than
50 percent.
PBF is not a universal program, as payments go only
to Brazilians living below a certain wage threshold. (In 2013, about one
quarter of Brazilians received this benefit). Another key difference is that
unlike PBF, which requires that children of recipient families attend
school and regularly visit the doctor, UBI is unconditional. But PBF is a
useful model for UBI, as both are direct cash transfer programs.
The best domestic example of UBI can be found in Alaska.
Since 1976, Alaska’s state government has maintained the Alaska Permanent Fund, which invests
in financial assets like public and private equities, real estate, and
infrastructure to generate revenues for the state government. The fund, which
is also fed by residuals on oil from public lands, then issues a check every
year to every resident of Alaska. In 2017, that
payment amounted to $1,100.
Back in the continental United States, the 27-year-old
mayor of Stockton, California, Michael Tubbs, started rolling
out a local UBI pilot program earlier this year. The
Stockton program, which is being
implemented in partnership with Facebook co-founder Chris
Hughes’s Economic Security Project, will provide $500 monthly to 100
families. The 18-month study will start in 2019.
In an interview with Politico, Tubbs rejected the argument
that paying people for doing nothing is inherently undignified.
“There’s this interesting conversation we’ve been having
about the value of work,” he said. “Work does have some value and some dignity,
but I don’t think working 14 hours and not being able to pay your bills, or
working two jobs and not being able — there’s nothing inherently dignified
about that.”
If Pawar’s program is implemented by Mayor Rahm Emanuel,
Chicago would be the largest city in America to experiment with UBI. Matt
Bruenig, the founder of the People’s Policy Project and a UBI advocate, is
skeptical that a municipality can run a successful UBI because cities tend to
have limited capacity to collect revenue. However, he does think that the pilot
project has merit.
“This looks like a UBI pilot program, which is a good
idea, just to study its effects and produce data that can help guide other UBI
efforts,” he told The Intercept.
“Our hope, that I know will be born out in this
pilot, is that it will show that when we smooth out the EITC, and we provide a
monthly basic income to 1,000 families, that they will be able to plan for
expenses, they can make decisions about savings, they can make decisions about
investing, they could make decisions about how they could deal with a financial
emergency, just like all families do,” Pawar told us. “And once implemented,
we’ll be able to hopefully scale it.”
To the alderman, the question is not so much whether the
country can afford to implement UBI so much as whether it can afford not to.
“My response to Amazon, and Tesla, and Ford, and Uber … we
need to start having a conversation about automation and a regulatory framework
so that if jobs simply go away, what are we going to do with the workforce? …
If [those companies are] reticent to pay
their fair share in taxes and still want tax incentives and at
the same time automate jobs, what do you think is going to happen?” Pawar
asked. “These divisions are going to grow and, in many ways, we’re sitting on a
powder keg.”
Update: July 17, 2018
On Tuesday, Mayor Emanuel’s former boss, President
Obama, said that a universal income should be part of the political
conversation.
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