Universal basic income (UBI) has existed on the fringes of conventional economic theory for more than a century. It functions as a direct approach to welfare by relying on flat payments to all adult members of a society on a fixed basis. Despite its relative obscurity throughout the 19th and 20th centuries, the recent rise of automation has resulted in UBI’s entry into the political mainstream. The heightened use of automated labor in industrial production systems threatens to displace unskilled labor workers around the country, forcing lawmakers to utilize innovative solutions to keep such workers from falling into poverty. While arguments regarding its feasibility and overall effectiveness remain, UBI’s eventual implementation on a national scale has become much more likely given the necessity for a solution to the rapid growth of automation within American industries.
The "Freedom Dividend," a popular policy proposal by 2020 presidential candidate Andrew Yang, is a UBI model calling for monthly payments of $1000 to all adults over eighteen, regardless of employment status or salary. In the current American system, average monthly benefits across all welfare-receiving Americans rarely exceed $600. Funds are often categorized by required use and crippling welfare traps restrict many welfare receivers. Yang's "Freedom Dividend" serves as an alternative to traditional welfare programs and permits Americans to swap their pre-held benefits for monthly UBI checks. A beneficial aspect of the program is that there is no upper salary limit, and welfare traps do not exist within the system. Therefore, many Americans will benefit from the increased amount of monthly funds, added spending freedom, and flexibility for professional advancement provided by the "Freedom Dividend."
In March 2022, Democratic lawmakers in California announced detailed plans to provide Californians with $400 checks as a part of a new tax rebate program. The motivation behind the program was the rising gas prices, even though Californians without cars were still eligible to receive payment. The recipients would receive prepaid debit cards as their payment, allowing them to purchase whatever goods they pleased. If successful, the California gas rebate program can lead to a more comprehensive adoption of UBI around the country. The program has bipartisan support among California lawmakers but still requires Governor Gavin Newsome’s signature for full implementation. Programs such as California’s $400 gas rebate are clear examples of how UBI is advantageous in offsetting economic inequality on a small scale. Increasing gas prices resulting from the Russia-Ukraine war had a significant impact on many Americans’ financial stability, and the boost provided by the rebate would allow many Californians to remain afloat while prices normalized. This small yet effective measure is popular among both political parties in the California State Legislature and would likely receive similar support nationwide. Framing the distribution of UBI checks as a solution to short-term economic issues, such as rising gas prices, environmental disasters, or health crises, provides a credible rationale for this necessary economic program. The adoption of small-scale UBI policies in response to short-term economic issues by lawmakers and political candidates around the country is imperative to reduce the stigma surrounding UBI. Consequently, the pathway to a nationwide program will become easier. The economic sacrifices needed to finance a “Freedom Dividend” program, such as a value-added tax and increased income taxes, will be more palatable once every day Americans experience the benefits of UBI.
The nation’s current financial climate is not suited for introducing a new $2.8 trillion welfare plan. However, one factor threatens to disrupt American economics in an unprecedented manner: automation. The number of operational robots in American industry has grown approximately 60 percent since 2016, with over 3 million robots currently operating in American factories. Reliance on automation will cause 36% of American workers to face job disruption by 2030, with the majority of those impacted expected to be low-income laborers. This monumental shift away from human labor has the potential to initiate massive waves of economic growth. Product enhancements and decreased costs associated with the automation of manufacturing could boost American GDP by 14 percent by 2030, with a $16 trillion total global impact. However, these profits will not be allocated equally between workers and executives. As inanimate robots gradually replace workers, industry profits will slowly accumulate upwards. Profits shared between masses of factory workers will go straight to the boardrooms. The result of automation will decrease the price of goods, while the accompanying employment disruption will be far more economically significant. Therefore, the economic climate of 2030 will appear far different than it does today. Without proper changes to our current system, the benefits of a potential 14 percent national GDP increase will be monopolized by the already ultra-rich, exacerbating the poverty rates of the already displaced working class. In this inevitable context, UBI emerges as a rational solution. It is evident that national UBI plans as lofty as Yang’s “Freedom Dividend” may not be feasible in our current economic climate, yet small-scale implementations of UBI may provide lawmakers with an effective method of spurring economic equality in their home states.
A federal universal basic income system would socialize and democratize the profits gained from the automation of human labor. By taxing the companies monopolizing the benefits of automation at a higher rate and distributing such profits to all citizens utilizing a UBI system, the benefits of automation would be socialized, and the economic gaps left by the elimination of low-paying positions filled. Increased tax revenue from those benefiting from automation would make nationwide UBI systems far more economically feasible, especially if the economic growth facilitated by automation reaches expected levels. However, increasing support for adopting UBI on a national level will require demonstrating its utility on a smaller scale. As proven by lawmakers in California, UBI can also function as an effective method of mitigating the impact of short-term economic crises. Lawmakers and political candidates who utilize UBI to foster economic stability and equality among their constituents will be increasing their approval and popularizing UBI, the only economic welfare program extensive enough to tackle the potentially devastating impacts of industrial automation.