ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
search
Close Nav

Not Transformative—Just Expensive

back to top
eye on the news

Not Transformative—Just Expensive

Andrew Yang may be a plausible mayoral candidate, but his basic income plan is dubious. January 22, 2021
Politics and law
New York
Economy, finance, and budgets

Andrew Yang’s political brand is that of a non-ideological outsider hailing from the private sector. Anyone concerned that New York will elect a mayor more left-wing than Bill de Blasio should therefore be encouraged by Yang’s current standing in the polls. Yang ran for president in 2020 on a proposal for a universal basic income (UBI). Basic income is again his main theme as he pursues the 2021 Democratic nomination for mayor.

Maybe Yang would be a sensible mayor, but his reputation as a technocratic problem solver is inflated. UBI advocates are some of the most ideological players on the policy scene. Yang’s plan for a basic income for New York does not reflect a pragmatist’s sensitivity. It departs from standard UBI proposals in ways that may seem to make the plan more realistic—but only by undermining the very premise of guaranteed basic income.

[T]he largest basic income program in the history of the country,” as Yang describes it, his $1 billion plan would give $2,000 per year to 500,000 New Yorkers “living in extreme poverty.” Thus, the plan is not “universal.” The idea behind “universal,” as opposed to means-tested, basic income is to eliminate poverty traps (also known as “implicit marginal tax rates”) that hinder advancement into the working class. In targeting the poor, Yang’s program will reinforce those poverty traps, which are already set to strengthen from the Biden administration’s federal safety-net expansions and from recent and planned city initiatives, such as “fair” transit fares.

UBI is often sold as the cornerstone of a simpler and better welfare state. As straightforward cash, it entails less overhead and fewer perverse incentives than services or in-kind benefits. Moreover, funding can be secured by dismantling all or at least much of the existing welfare state. Simplifying welfare has always been central to the libertarian case for some version of basic income, such as one can find in Milton Friedman’s Capitalism and Freedom and Charles Murray’s In Our Hands.

But Yang claims that beneficiaries of his program wouldn’t lose any other benefits. Basic income, here, would be entirely additive, and the $1 billion in funding would have to be found elsewhere. Yang’s sole gesture to fiscal responsibility is his touting the savings that will accrue to the health-care and criminal-justice systems when people’s lives are transformed by a $2,000 a year raise: “By reducing crime, hospital visits, and homelessness, this basic income program will decrease the costs associated with these social ills and allow the cash relief program to grow over time.” Experienced policy observers know better than to take seriously such saving-by-spending arguments.

Yang also touts immigrant access to his program. Guaranteed basic income, though said to date back to Thomas Paine, is an idea “whose time has come,” per proponents, due to globalism. They see globalism as generally good, but in any case inevitable; we must face up to how it creates winners and losers and compensate the latter. But immigrants are the winners of globalism and thus not the ideal beneficiaries of a basic-income program.

Sometimes social mobility requires geographic mobility. Local relief programs hinder geographic mobility because if you move, you lose access. The New Deal was premised on the need for a nationally oriented welfare state, but federalist considerations have left many programs strongly connected to place, as Henry Olsen explains in his 2015 essay “A New Homestead Act.” One might also consider New York’s generations of experience with affordable-housing policy. If basic income is to be done at all, it should probably be undertaken by Congress, not states and cities.

Though basic income is meant as a response to socioeconomic disruption, it could well induce disruptions of its own. Extremely low-income New Yorkers struggle with the scarcity of low-rent units. The most recent Housing and Vacancy Survey data cite a 1.15 percent vacancy rate for units renting at less than $800. Sending more cash into a supply-constrained system risks creating an inflationary effect. Landlords of housed recipients of basic income will feel free to raise rents a proportionate amount, meaning that the program will be something of a wash for those tenants and would actually make life harder for households not getting basic income.

Maybe $2,000 a year is not enough to cause such major unintended consequences. But if basic income’s unintended consequences are minor or nonexistent, then the intended benefits would be as well. If $2,000 a year for 500,000 people won’t be transformative, then it shouldn’t be ventured, since $1 billion a year is a risky commitment amid a recession and after years of excessive spending under Bill de Blasio.

Photo by Drew Angerer/Getty Images

Up Next
eye on the news

New York’s Homeless Crucible

The issue should be front and center in the 2021 mayoral contest. Stephen Eide December 2, 2020 New York City Reborn, Politics and law

Contact

Send a question or comment using the form below. This message may be routed through support staff.

Saved!
Close