Andrew Yang on which would more broadly help the most Americans: universal basic income or higher wages
- Paul Constant is a writer at Civic Ventures and cohost of the “Pitchfork Economics” podcast with Nick Hanauer and David Goldstein.
- In the latest episode, Hanauer spoke with New York City Democratic mayoral candidate Andrew Yang.
- Hanauer and Yang have different views on whether a universal basic income or higher minimum wage would be best for more Americans.
- See more stories on Insider’s business page.
Most progressives — really, most Americans — agree that income inequality is a tremendous problem. For over 40 years, the vast majority of profits have gone to the wealthiest 10% of the economy, and a gigantic portion of those gains have been scooped up by the wealthiest .01 percent. The $50 trillion dollars that used to go to the American working class has now been leveraged to a fraction of the population, and that disparity is now obvious to everyone.
In this case, though, identifying the problem is the easy part. A lot of very smart people have many different ideas about how to alleviate income inequality, and many of these ideas aren’t compatible with one another. So decisions will have to be made about how to get that money back in the pockets of ordinary Americans.
For Nick Hanauer, the host of the “Pitchfork Economics” podcast, the first step to address income inequality was easy. In Washington state, Hanauer became one of the leading voices in the Fight for $15, which called for a $15 minimum wage. Now that it’s been endorsed by almost every single high-profile Democratic politician, $15 seems obvious, though Forbes in 2013 characterized it as a “near insane” proposition.
In the latest episode of “Pitchfork Economics,” Hanauer describes those early days of the Fight for $15 to former presidential candidate and current New York City mayoral candidate Andrew Yang. And Yang is in agreement with Hanauer’s assessment that raising the minimum wage is good for the economy.
“Just about everything out of your mouth, I’ve always agreed with,” Yang told Hanauer. “But I think you would agree with me, particularly during this pandemic, that the extremity [of America’s income inequality] is accelerating and getting worse.”
Yang’s approach to fixing the economy
The entrepreneur and New York City mayoral candidate is perhaps the most high-profile proponent of the universal basic income (UBI), in which the government would send every American a check that they could then spend however they wish.
“If I had a choice between something like universal basic income and a higher minimum wage, I would choose universal basic income,” Yang said. “But if I don’t get universal basic income, then I’m all for raising the minimum wage.”
“I’m on exactly the other side of that trade,” Hanauer said. “I really do believe in capitalism. I do believe that it is a great economic system — the best ever devised.” At the same time, Hanauer rejects the idea that “the whole system will come tumbling down if companies are required to pay their workers enough to live in dignity without food stamps.”
Yang told Hanauer that when he considered getting into public life, “I looked at the political possibility of changing the labor standards along the way you suggest.”
Universal basic income versus a higher minimum wage
Yang believes that the idea of a UBI is simpler and more suited to the modern world than reforming and updating the suite of labor standards instituted in the first half of the 20th century. He considers automation to be the leading problem for American workers in the 21st century, and believes that a significant portion of the American workforce will be made obsolete once technologies like self-driving cars and trucks finally mature.
If Yang’s dire prediction is correct, and millions of Americans are forced out of work and essentially considered useless to the labor force, a UBI might be better-suited to solve that crisis.
Hanauer, however, believes that the coming wave of automation is not significantly different than the uncountable waves of automation that workers have lived through since the dawn of civilization. The invention of assembly lines, industrial farming equipment, and personal computing caused disruption in their fields that temporarily put people out of work, but all three technologies created jobs in the long run.
Hanauer believes that the real battle is to make sure that the newly created jobs pay enough that workers can afford to fully participate in the economy, because their consumer demand is what creates more jobs.
A meaningful path forward
The problem with internal debates among progressives is that there is no one right answer, and that these economic ideas are largely exclusive of each other — no politician that I know of is simultaneously calling for expanding the minimum wage and also establishing a regular series of UBI payments for all Americans.
The path forward can only be found through good-faith, informed debates like this, deliberating what action is possible, which outcomes are preferable, and who is persuadable. The debates of today are the crucibles that shape the policy of tomorrow.
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