Economist Tyler Cowen and former world chess champion Garry Kasparov (now the chairman of the nonprofit Renew Democracy Initiative) co-authored an opinion piece this week in Bloomberg arguing that "a pandemic is providing a tragic preview of some of the conditions UBI was conceived to address."
Though they worry about the cost of such a program, "And, though there are some important qualifications, Covid-19 is making UBI look better..."
Job creation during the pandemic is as slow as many UBI advocates feared. Even in health care, where one might expect employment to be rising dramatically in the midst of a pandemic, it is sluggish... In response to an unemployment level unseen since the Great Depression, the federal government has instituted cash transfers, which in some cases result in unemployment payments that are higher than wages. This is a radical experiment. It is being called stimulus, inaccurately, when it is a humanitarian program designed to tide people over during economic duress — and it draws explicitly upon UBI-like ideas.
In contrast, many European countries have been guaranteeing wages in the hopes of "freezing" the economy and then "defrosting" it when it is safe to return to work. Yet some recent U.S. estimates suggest there will be 3 new hires for every 10 layoffs caused by the pandemic, and furthermore 42% of the new layoffs will be permanent. (In post-pandemic America, there will be less need for waiters.) That suggests the American UBI-like strategy is likely to outperform the European approach, because the world is changing rapidly and labor will need to be reallocated accordingly...
Representative Alexandria Ocasio-Cortez as well as Senator Mitt Romney have argued that UBI is an appropriate response to a pandemic, though Ocasio-Cortez favors making it permanent.... Covid-19 is illustrating that some aspects of a UBI may be more necessary and more workable than previously thought.
The New York Times also reported today that "three dozen influential figures at labor unions, think tanks and other progressive institutions have convened a weekly virtual meeting — known as the Friday Morning Group... one of several brainstorming-and-planning initiatives underway in Washington" to consider responses to new economic challenges, "including mainstream proposals like major new spending on public health and child care and less widely supported options like creating a universal basic income or offering a federal jobs guarantee."
Mary Kay Henry, president of the Service Employees International Union, which represents more than a million health care workers, said she had briefed Democratic lawmakers in both the House and Senate about her organization's view that it was time to "change the rules of the economy for the long term," including a powerful expansion of the rights and employment benefits of lower-income workers.
And former Democratic presidential candidate Kamala Harris "has endorsed a plan called the Monthly Economic Crisis Support Act," writes an editor at the conservative and libertarian think tank the Heartland Institute, "which would send $2,000 per month to Americans who make less than $120,000 per year. Married couples would receive $4,000 per month, as well as $2,000 for each child... the checks would be sent for up to three months after the coronavirus crisis ends."
But that editor calls it "a preposterous plan," adding "is it such a logical leap to assume that some on the left are using the coronavirus crisis as an opportunity to introduce another 'temporary' welfare program...?"
Read more of this story at Slashdot.
