With the next Presidential election quickly approaching, the Democratic stage is heating up. In fact, as I write this, over twenty candidates are still contenders in the race. With so much competition, it can be hard for candidates to distinguish themselves. However, one candidate has had no trouble sticking out for his differences: he didn’t wear a tie to the debates, he has no political background and his campaign slogan is the acronym “MATH” (Make America Think Harder). No, it’s not your high school Algebra teacher. It’s Andrew Yang.
From his entrepreneurial background to his Asian American identity, Yang is certainly one of the Democratic Party’s more unconventional candidates. Perhaps even more unconventional than Yang’s candidacy itself, however, is his plan to give every American $1000 per month. This proposal, also known as the Freedom Dividend, is a form of Universal Basic Income.
What is Universal Basic Income?
Simply put, the Universal Basic Income refers to “a periodic cash payment delivered unconditionally to all citizens.” The purpose of a UBI is to provide all citizens with sufficient income to meet a universal standard of living that meets the most basic of human needs. The Basic Income Earth Network (BIEN) describes the basic income as a way to give every citizen a livable source of income, regardless of whether or not they are able to contribute to production.
Despite its recent popularity, the UBI is by no means a recent concept. The belief in a minimum income can be traced to the Humanists of the 1500s. So, why this recent resurgence? As the world prepares for an automated future, more attention is being directed toward preparing for the changing tech and labor trends of the upcoming economy. Specifically, supporters argue that implementation of UBI will mitigate the most significant negative economic impacts of automation and prevent an “unprecedented level of crisis.”
Let’s break down the UBI. According to (BIEN), there are five distinct features of any UBI plan:
- Periodic: Paid at regular intervals.
- Cash payment: UBI is given out in cash (as opposed to vouchers or services).
- Individual: Received by each individual citizen– not by household .
- Universal: Everyone gets it!
- Unconditional: There are no prerequisites that must be met for a citizen to receive the income.
What’s the Freedom Dividend?
If you have spent any time listening to Andrew Yang and his policy plans, you likely have heard of the Freedom Dividend. Since the Universal Basic Income is only an income model, the Freedom Dividend can be seen as Andrew Yang’s specific policy proposal.
As described on Yang’s website, “the Freedom dividend is a type of social security that guarantees a certain amount of money to every citizen within a given governed population…. This form of UBI is a set of guaranteed payments of $1,000 per month, or $12,000 per year, to all U.S. citizens over the age of 18. That means you and everyone you know would get another $1,000/month every month from the U.S. government.”
Let’s take a look at how Yang’s proposal fits into the five characteristics of a UBI plan that we previously outlined.
- Periodic: Yes, “once per month every month.”
- Cash payment: $1,000/month (or $12,000 per year)
- Individual: Yes, “all U.S. citizens over the age of 18.”
- Universal: Yes, “everyone you know”
- Unconditional: Yes!
So, does it work?
According to Yang, this is a widely supported plan. Everyone from Milton Friedman to Barack Obama (and yes, Elon Musk) has advocated for it in some way or another. But it almost seems to perfect. So, the issue remains: would it really work? The short answer is we don’t know.
By this point, you’ve likely wondered “but what about ________?” (insert: inflation, increased immigration, communism, etc.) Yang is smart and knows that people will be asking these questions, so he has conveniently provided a comprehensive set of answers to some of the most frequently asked questions about the Freedom Dividend. If you forget that this is a campaign website—littered with persuasive rhetoric—his answers might seem enticing, but external research shows skepticism.
Like anything in politics, the answer isn’t black and white. The studies that have been done on the UBI model bring back mixed results. The one thing that they can agree on? The implementation of a plan like Yang’s would be incredibly expensive. So, now the question becomes, is it worth it? Will Yang’s plan really provide enough value (i.e. in counteracting the negative economic effects of automation) to make up for the plan’s cost?
The Freedom Dividend has received criticism for more than just its cost and potential effectiveness. A recent Mother Jones article examined the tradeoffs of the plan, writing that “Citizens would have to choose between the $1,000 or any existing welfare benefits—potentially including Social Security, disability insurance, food stamps, and housing assistance.” There are also the potential macroeconomic repercussions.
I’m not going to tell you how to feel or what to think— that’s your decision. But this should provide you with enough of an introduction to Yang’s plan to give it some of your own thoughts. A quick Google search will uncover tons of studies and articles about the UBI, and Yang’s plan specifically. With the Democratic stage being so crowded, the responsibility of understanding each candidate and what they stand lies with each citizen.
The third Democratic debates with be on September 12th (and potentially 13th—if enough candidates qualify). Until then, keep reading!