Thoughts on an Unconditional Basic Income or a Minimum Wage Increase

In the 21st century it is entirely reasonable to house and feed every human being on the planet. The current system lacks the ability to make this goal a reality. Countless buildings sit empty and/or inhospitable and good food is consistently thrown out. Due to the abhorrent nature of the socioeconomic system we occupy, two inspiring ideas have emerged.

The Fight for $15 campaign promotes a minimum wage hike to compete against rising costs of living and seeks to secure a living wage for the hard-working people of this nation. They make the respectable claim that the current minimum wage employees cannot make enough to properly survive off of their current pay. This movement has grown in strength and has already had success on some ventures.

Similarly, the idea of a basic income wishes to grant people with enough money to provide for their basic necessities such as shelter or food. For the sake of simplicity, when I discuss basic income, I am talking about the specific form of unconditional and universal basic income that appropriates a value of money calculated to fulfill a person’s absolute necessities. The unconditional and universal aspects implies that it becomes a right for everyone (in the nation) to have this basic income. There exists other forms of basic income such as a scaled down version that guarantees a minor, but not livable, wage per month. This has been rather ineffective in earlier studies and is entirely impotent towards the goal of meeting basic needs.

Will either of these two respectable ideas help in reaching the stated goal of finding a way to meet everyone’s basic needs for survival ensuring food, shelter, and other necessities?

Fight for $15/hr

A rise in the minimum wage is a much more popular and seemingly feasible argument in comparison to unconditional basic income. It is a highly debated topic and one cannot walk throughout the city of Chicago without noticing signs and advertisements for this idea.

Whenever I see this topic debated, it never ceases to amaze me how selfish people become. Try it out for yourself. Post some articles about a minimum wage hike and hear the common (selfish) arguments:

  • Illegals need to stop taking our jobs.
  • Minimum wage workers should (or should have) obtained better skills to acquire a better job.
  • Minimum wage jobs are meant for teens and as entry-level jobs.
  • You make what you deserve! Why pay more for flipping burgers.
    -etc.

Beyond the utterly selfish notion of these arguments, these arguments fail to understand the system constraints that we all live within. There are only so many jobs to go around, there exists countless hurdles for people to become ‘skilled’ or ‘educated’, many will not get the chance due to their economic background, and so on. This post is not about the structural violence that exists, but I wanted to point out how defensive people become on this issue. Raising the minimum wage is about securing shelter and necessities for all working human beings.

But this is one of my complaints against the hike in minimum wage. A rise in minimum wage would be a great thing (at least temporarily) for the minimum wage workers, but it would not succeed in establishing necessities for every human being. I see no reason as to why we must stop at people who work/have jobs. Unemployment exists and will likely be escalated through any minimum wage increase resulting in more people without the ability to house or feed themselves.

I see a few possible economic outcomes of a minimum wage increase. Business owners, when forced to increase minimum wage, will have to respond by securing additional profits someway. The first way would be to increase prices of their supplies. One might argue that in doing so, the competition will win out over the business that raises prices. The problem is that the only companies that will not need to raise prices to meet the new labor hike will be big businesses who make major profits and can take the hit of a labor increase (Think Wal-Mart vs. small-town stores). Once competition is taking care of, the larger stores are free to increase prices. Additionally, oligopolies exist and I see no reason to suggest why a few dominating firms won’t agree to raise prices on similar products together in order to ensure market success (think: Gas station oligopolies). This inflation will spread throughout the market and soon enough a wage of $15/hr will be as utterly useless as the current minimum wage.

ipod
Replaced by Ipods?

Perhaps you are not convinced on the inflation argument. The next way to ease higher labor costs would be to invest and purchase technology that replaces the minimum wage worker. Technological unemployment is continuously becoming more prevalent in society and a minimum wage increase would ensure that companies consider the merits of the cost of robots vs. the cost of human beings. When your employees go from making $8/hr to $15/hr the price of paying upfront for technology becomes more appealing. Here, all it would take is for one competitor to invest in machines for the chain reaction to begin (example: if company A embraced machines to perform 95% of duties, then competitor company B would have to do the same or remain at a strong disadvantage).

With this being stated, I do support a minimum wage increase. We are no better off than the slaves of the past. We are wage slaves and our masters are more protected than ever. It is crucial that we band together and find a way to make livable wages a reality if we are stuck in this terrible system. It is not right that anyone working a 40 hour a week job, whether a fast food clerk, a Wal-Mart greeter, or a CEO, be destined to nourishment and shelter problems in the 21st century. My complaint to the movement advocating such means is that this isn’t enough. Noting the earlier argument, a minimum wage increase would only have temporary net positive gains at best, and at worst put more people out of employment. I would urge the movement here to fight for a basic income, or better yet, a new system.

An Unconditional Basic Income

Much like the common selfish arguments against a rise in minimum wage, there exists a number of myths about a basic income and how it would affect society. One of the major myths about basic income is that people would have no motivation to work or volunteer.

An excellent discussion on the possibilities about basic income and the myths surrounding it by Federico Pistono is presented here:

If you are interested in another talk, check the TEDxMaastricht talk here.

Unfortunately, I do see some major issues with a basic income. An unconditional basic income would likely work well in a small society or a more civilized larger society, however the United States has ~320 million citizens. Some simple math would show that if you give every citizen $1000 dollars per month, the amount of money needed to fulfill this basic income would be nearly $4 trillion per year. This is a shocking number to consider and has to make one wonder on what type of inflation we would then produce. It is argued that with eliminating the failed and/or useless social programs that we have running today, we would be able to fund the basic income. Even if this is so, the inflation problem is a reality and injecting this amount of money into the economy would likely serve to raise prices dramatically.

I also have doubts on whether it would be able to be funded by simply eliminating the failed social programs. A progressive tax on the rich would be a possible way around this (something I am most certainly for), but short of a revolution, I don’t see what the current hierarchy would allow such a plan.

The idea that we can simply print the money necessary is also faulty as that is direct inflation and does not add value to the economy.

The next problem with an unconditional basic income in the context of the current society is that no one would want to do the dirty jobs. No, I’m not even talking about the day retail jobs at a grocery store, or a simple cashier job. I’m talking about the really problematic jobs. The overnight fast food crew (or well, the overnight ____ job), jobs picking up other people’s trash, etc. The counter argument is that robots are here to steal these jobs. I do like this idea very much, but until this becomes a reality, we will still need people to take care of these very dirty jobs. A combination of robots and the minority of people who surprisingly might enjoy these type of jobs would quell the problem, but it is completely dependent on the technology at hand. Permitting that the technology for these jobs does become available, it begs the next question: Why not automate even more jobs?

Conclusion

While I support the two inspiring ideas for societal change, I believe they both fall short of addressing the root causes of the problem. Very similar to the recent marriage equality movement, I feel one day soon one of these movements will reach victory. Similarly to the movement for equality, what is being fought for is misguided and ultimately misses the root cause of the problem. We are quickly approaching a time where a new system is needed. The current hierarchy will not give up easily, and I wish these movements focused on overthrowing the system rather than trying to exist within it. However, my support for these two ideas stems from them being a possible stepping stone during these transition stages and temporarily allowing people to have their basic needs met.

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