The Major Arguments Against Andrew Yangs Universal Basic Income Plan

The Major Arguments Against Andrew Yang's Universal Basic Income Plan

Universal Basic Income (UBI) has been a subject of extensive debate among policymakers and public figures. Andrew Yang's proposal for a UBI aimed at addressing economic insecurity and promoting social welfare. However, several major arguments have emerged against this plan, which are critical from both economic and social perspectives.

Similarity to Earned Income Tax Credit

One of the primary criticisms of UBI is its similarity to the Earned Income Tax Credit (EITC). The EITC was introduced by southern politicians to help employers continue paying low wages, as raising the minimum wage would cut into their profits. The employers were essentially asking the federal government to subsidize their low-wage workers, a strategy that some critics argue could undermine the purpose and effectiveness of a UBI.

Similarly, UBI reduces the pressure on low-wage employers, potentially leading to a decline in wages and a reduced incentive for these employers to improve working conditions. This can hinder the formation of unions and prevent workers from negotiating for better wages, which is contrary to the goals of promoting workers' rights and economic equity.

Automation and Employment

Another significant argument against UBI is its perceived relationship with automation. Critics argue that automation has been a source of declining employment in manufacturing since the 1920s. While some proponents argue that artificial intelligence (AI) will further exacerbate job loss, others contend that the current level of investment in new technology is relatively low due to excess capacity and low demand.

A solution proposed by some critics is to reduce the workweek to four days or 28 hours without any loss in income. This approach can help workers take back some of the productivity gains made since the 1970s. It would also force employers to hire more people, spreading the work among more workers, which could lead to an increase in job opportunities and better wage conditions.

Financial and Practical Concerns

Further, UBI is extremely expensive, and it does not provide a basic income for all segments of the population. Children and families will not receive UBI, which is a significant drawback. It also benefits companies like Walmart, allowing them to continue exploiting low-wage labor. The cost of UBI could be several times the EITC, which already partly addresses low-wage issues.

Moreover, UBI does not compensate for increases in prices, meaning that the nominal value of the UBI will not keep pace with inflation. This could result in rising rent and lower wages in real terms. Additionally, homeless individuals may continue to struggle with housing and basic needs, despite receiving UBI.

Socioeconomic Implications

Some opponents of UBI argue that it ignores the fact that historical employment trends have never been more advantageous to workers. The number of employed individuals has never been higher, which implies that UBI is not necessary to address unemployment or underemployment.

Furthermore, the argument that UBI denies the existence of undervalued jobs is a valid concern. Many low-wage jobs are critical to maintaining social and economic stability, and these positions often pay less than their economic contributions warrant. Reducing wages or dismissing these roles through UBI could lead to further economic and social instability.

Conclusion

In summary, the arguments against Andrew Yang's Universal Basic Income plan are multifaceted and encompass economic, financial, and social dimensions. While UBI has the potential to address certain problems, its current form does not sufficiently address the issues of wage stagnation, automation, and the lack of a comprehensive support system for all workers. Alternatives such as reducing the workweek or other targeted measures might offer a more sustainable and equitable solution to the challenges facing the workforce today.