Before you write off the concept of a guaranteed minimum income for Americans as coming from a bleeding-heart liberal academic, consider the rationale for supporting the idea.
Also called minimum income or basic income, guaranteed minimum income is a “system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions,” according to Wikipedia.
I am a conservative and libertarian and support the consideration of the idea.
Initially, guaranteed minimum income sounds like the wrong direction and a liberal-progressive policy, but the more you think about it, the more it sounds like a good idea.
Traditionally, a measure of economic growth is the unemployment rate, the lower the better. But the goal of Silicon Valley is 100 percent unemployment.
As technology eliminates jobs and productivity increases, what will happen to the displaced workers who lack the skills for the economy of the future?
WHEN JOBS DISAPPEAR
Take, for example, the driverless vehicle.
Today’s college students could be the last generation to have a driver’s license. In less than three years, most of our vehicles will drive themselves.
What happens to everyone who drives for a living, all those taxis, ambulances and truck drivers?
In the U.S. alone, roughly 3.5 million people drive for a living. Some jobs will be created by driverless technology, but what are all those drivers supposed to do when their livelihood is eliminated?
PRESERVING THE FREE MARKET
It might be cheaper to have a guaranteed minimum income rather than all of the existing federal programs to help those in need. This does not include state programs, anti-poverty programs with a guaranteed minimum income.
In addition, we pay more for goods and services when government attempts to save jobs that should be lost to technology or productivity or no longer serve a purpose.
For example, most states prohibit manufacturers from selling directly to consumers in order to keep middlemen in business.
Why do we need middlemen anymore, unless you are a middleman?
LET MACHINES DO THE WORK
Essentially, technology combined with productivity increases will displace people from work. Rather than deal with social unrest – the lost jobs are never coming back – instead pay people not to work and pay for it with economic efficiency.
In other words, give people free money, and let machines do the work.
Government already is a safety net, and with a guaranteed minimum income, you avoid social unrest or government standing in the way when jobs disappear because of obsolescence or technological efficiency.
Guaranteed minimum income has supporters at the ends of the political spectrum. It’s attractive to libertarians and conservatives.
In 1962, libertarian economist Milton Friedman advocated a minimum guaranteed income via a negative income tax. Plus, a guaranteed minimum income could eliminate much of the enormous governmental administrative cost, as well as programs that require recipients to navigate multiple agencies.
Liberals and progressives see it as redistribution of wealth and believe that there is a greater need for resources for other purposes, such as health and education.
And Silicon Valley hopes a guaranteed minimum income would cushion the blow as technology replaces jobs.
The idea of guaranteed minimum income is not new. Nearly 50 years ago, it started as a revolution in social policy research.
Today, it’s hotly debated in rich and poor, big and small countries.
Switzerland held a referendum on it, and Finland is planning experiments on guaranteed minimum income. India is testing versions, too.
Guaranteed minimum income is a topic that likely will gain more discussion and traction. For example, Facebook founder Mark Zuckerberg’s recent graduation speech broached the topic.
So, when there’s a massive loss of jobs, and if too many hard-working people are displaced by technology and they earn too little to live on, what happens next?
The U.S. government already spends nearly $1 trillion across dozens of separate programs.
Could one solution to the problems be an idea that’s been floating around in economics circle for decades?
Here’s the idea: What if everyone automatically received from the government a guaranteed minimum income instead of Social Security, unemployment or welfare, to name a few?
John D. Rossi III is a business leader, lecturer, accountant and financial planner with more than 30 years of business and academic experience. An associate professor of accounting at Moravian College in Bethlehem, he is president of JR3 Virtuoso Solutions Inc., specializing in financial reporting, taxation, professional training and consulting services. He can be reached at email@example.com.