Why America needs both a UBI and a job guarantee
In the era of President Trump, you might expect the left to hunker down. Instead, it's gravitating towards two breathtakingly ambitious ideas.
The first, a universal basic income, is an unconditional monthly cash income to every man, woman, and child in the country. The second, a job guarantee, is an open-ended commitment by the government to provide work, at a living wage and with benefits, to anyone who wants it.
Unfortunately, supporters of the two ideas sometimes line up into rival camps. It's not that a UBI and job guarantee can't go together policy-wise, but critics often see one proposal as absolutely necessary, and the other as questionable or even destructive.
But the UBI and the job guarantee aren't just both good ideas. They're complementary good ideas.
Let's take on the criticisms first.
Among most mainstream thinkers who oppose the UBI, the most common argument is the one offered by my colleague Damon Linker: that simply giving people money without the duty and structure of work wouldn't free people, it would degrade them. Amongst more lefty critics, there are also some technical objections that a UBI could actually increase inequality or inflation.
Meanwhile, some job guarantee skeptics, like John Malesic in The New Republic, offer arguments that are the mirror inverse of Linker's: that we already value work too much and we should pursue its diminishment through a UBI. You'll also find some libertarian Silicon Valley-types who like the UBI, but not the job guarantee, because they think robots will eventually make it impossible for everyone to work, and that job creation should be left to private markets anyway.
Everyone misses something here.
First, numerous studies on UBI-style experiments are clear: People don't squander the money, but invest in themselves and their families, especially their children. Sometimes they participate in the job market a little more, sometimes a little less. But they're certainly not succumbing to drugs or alcohol.
As for the jobs guarantee critique that says we already value work too much, I'm sympathetic but ultimately unconvinced. Malesic's arguments rests on the notion that we unfairly stigmatize people who can't work. That's certainly true, but the question is why. Ultimately, most Americans aren't cruel. They're desperate: They feel like they're fighting over a shrinking pie even when they work because virtually all of the income gains from the last two economic expansions went to the 1 percent. By definition, this means most people are running in place or falling behind in absolute terms.
This is where UBI and the jobs guarantee can work together.
Whatever the job guarantee offers would become the minimum standard across the country. Private employers would have to beat it to hire anyone. So a job guarantee could enforce a national living wage, a national standard package of health benefits, a national work week, etc. Beyond that, a job guarantee would permanently tighten the labor market — employers would constantly be competing for workers, not workers competing for jobs. That would drive up wages, squash inequality, strengthen unions, and improve working conditions.
But a job guarantee wouldn't help you much if you simply can't participate in paid work, which is a big problem for many of the people who make up the ranks of the poor: the elderly, the disabled, students, children, and caretakers. Even in a world where jobs are well-paid and abundant, many Americans wouldn't be able to take them and would need help of some kind. A job guarantee also wouldn't empower you to simply leave the job market, even if you could work, to focus on things like raising a family or volunteer work that's been overlooked by policymakers. (A job guarantee is meant to be versatile in how it defines a "job," but it can't cover all possibilities.) But while the UBI can't reform the job market on its own, it can plug those two holes. Thus the two policies' respective strengths and weaknesses complement rather than contradict one another.
So the real question isn't which policy triumphs over the other, but which should be prioritized if and when the left retakes power in the U.S. And there I think the job guarantee handily beats the UBI.
The biggest reason is that a job guarantee would pave the way for a UBI. Because a job guarantee would remake the experience of work in the public and private sector for everyone, Americans would finally feel like they were benefiting from a growing pie again. That ought to make voters much more friendly to a generous welfare state, not less.
A job guarantee also stands a better chance of getting enacted first. Even a $10,000 UBI would cost trillions annually. But a job guarantee that paid $25,000 plus health benefits, while certainly not cheap, would cost less than some of the big entitlement programs we already have. Which probably makes passing it a lot easier.
A job guarantee is also more resilient on its own. A UBI's effect on the job market would ultimately depend on how Congress sets tax policy, and how the Federal Reserve handles interest rates. Since some powerful people see the policy as a way to protect the wealthy from the restless masses, this could lead to a world where we have a UBI and where aggregate demand remains inadequate, joblessness rampant, and inequality high.
By contrast, a job guarantee would tighten labor markets directly by just creating jobs. And it wouldn't compete with private employers by upping its own wage offer, so the potential for inflation is lower. Its success is less dependent on other policy choices.
Finally, I do think some UBI fans have their basic political theory backwards. Giving people the freedom to consume goods and services at some minimally decent standard, without having to bow to the demands of an employer, is very important. But to really empower people, to make our society egalitarian and democratic in the deep sense, requires giving everyone a say in production — how we, as a society, deploy our resources and labor.
That's something the job guarantee is uniquely equipped to deliver.