Universal basic income [UBI] is a temporary bandage for a hemorrhaging economy clinging to life support with no relief in sight.
Policy makers both nationally and in CA are considering the UBI put forth by former presidential candidate Andrew Yang. This measure would attempt to counter the growing number of unemployed residents who have lost jobs that are considered non-essential due to the Covid-19 outbreak.
Policy makers have a habit of ban-waggoning as seen with CA now introducing a bill that would provide an income of $1,000 to every adult over 18 years of age. This was a proposal introduced by Yang and discussed by the plethora of business and economic pundits that clamor for a platform to express their conjecture. UBI is comical at best and there are several reasons it won’t work. This is not the first time this idea has come up, as Yang said “I know this may sound like a gimmick, but this is a deeply American idea.”
The City of Stockton tested out their version of a UBI to see how residents would spend the money. There is a preconception that free money will be spent frivolously according to Stockton Mayor Michael Tubbs “In this country, we have an issue with associating people who are struggling economically and people of color with vices like drug use, alcohol use, gambling.” Most of the residents spent the money on food, clothes, and utility bills.
The idea that a $1,000 would help is valid but comical in that it provides the basic necessities for a small population of people like Stockton. But even in Stockton, residents still have to struggle with rent and miscellaneous costs. If they are unemployed, the $1,000 doesn’t relieve them of the rising cost of housing.
The number of Stockton residents 18 and older is roughly 164,687 or 67.6% and multiplying that times $1,000 amounts to $165 million annually. With a UBI plan applied to Los Angeles City, not county, where 77.3% of residents are over 18 years old, the number is astronomical. In Los Angeles City, there are approximately 31 million residents over the age of 18. Multiply that number by $1,000 and L.A. will have to pay $30.6 billion dollars per year to residents. Looking at the GDP [gross domestic product] of Los Angeles which amounts to $941.06 billion, it would appear at first glance that Los Angeles could afford $31 billion.
Los Angeles is considering rolling out their own version of a UBI plan which would pay every resident over 18 years old $500. Applying the above math, at $500 per month, L.A. is still stuck with an annual bill of $15.3 billion. This number relies on residents who are accounted for but excludes the 60,000 homeless we have in Los Angeles.
It certainly doesn’t help residents build savings which is one reason amongst many that residents have a near impossible time getting ahead financially. When looking at the budget of Los Angeles for 2019-2020, the total budget is $10.71 billion, so where is the City of Los Angeles going to pull this magical bunny rabbit of a UBI plan from? Everyone knows Los Angeles is the land of entertainment and this proposal is by far the most entertaining act thus far.
When policy makers yammer about how they are going to follow the lead of Yang and roll out a UBI which they simultaneously criticise, they rely on the public digesting soundbites and not doing their own due diligence in researching what a UBI would mean both literally and economically. In America according to Karl Widerquist, an economist at Georgetown University, “The conditional programs inherently use poverty as a threat. That’s Cruel. Shouldn’t we be ashamed of ourselves?”
Any UBI that came about in any major metropolitan city let alone any major city in CA would not only cripple the economy but act as a slap in the face to every resident who lives paycheck-to-paycheck. Policy makers can keep their political shillings since the chasm in economic disparity is only growing at an exponential rate. Residents of CA don’t need a UBI, they need more opportunity to earn better wages, regulation of residential costs, opportunity to save money, and policymakers who understand the plight of the economically disenfranchised.