74&W Exclusives


Annie Lowrey


For the second installment of our series of interviews about the Future of Work, we talk with Annie Lowery, acclaimed author and contributing editor of the Atlantic, about the concept of Universal Basic Income (UBI), in which every citizen would receive a small stipend. In this discussion, Annie talks about how UBI is hardly a new concept, the different forms it can take, and the various pilot programs that have been implemented. Annie also discusses the various benefits of UBIs and responds to common criticisms of the concept.

What is it about UBI that fascinated you enough to want to write a book about it?
The reason I wanted to write this book was that [when] you talk about UBI as a concept, it lets you talk about and think about so many interesting things, everything from political economy and how we elect to give different things to different people, to wage structures, to welfare programs, to insurance programs, to entrepreneurship.

And what was it that first spurred your interest in the topic?
I’ve been a reporter based in DC for more than a decade now, and have been writing about labor issues since before the recession started, but then especially when the recession took hold. As I’m sure you remember, it was initially a financial crisis, right? But while there was all this concern about banks and what Washington was doing and how this might be changing investments, this was just an enormously wrenching human tragedy that kind of ricocheted around the world. And so I’ve been writing about labor issues ever since then for one publication or another. When the Swiss referendum on UBI happened, I followed up and visited. And [on] GiveDirectly, the UBI experiment in Kenya, I actually went twice, before folks started receiving the money and then when they started receiving the money. And so the book grew out of that. 

Universal basic income has become a common term that we hear about and read about all the time. But it’s hard to pinpoint a moment when we came from having never heard that term to it being something that is almost omnipresent. When did that happen?
Obviously it’s a really ancient concept, but a lot people’s knowledge of it comes from the guaranteed minimum income experiment that happened during the Nixon Administration. But if not, I think it’s really been in the last five years or eight years that it’s really taken off.

Nobody is talking about giving people a sum of money that would cause them to stop working.

Before we go any further, let’s operationalize this term, “Universal Basic Income,” since it seems to mean different things to different people. Isn’t it more of an umbrella term for various schemes? 
Yeah, UBI is sort of a broad term. So when people think [about] UBI, they generally are talking about everybody -- although who “everybody” is depends on a lot of things – receiving some amount from the government. A standard amount that people talk about is either $500 or $1000 a month. That would probably barely get you out of poverty if you had some slight other form of income, but it’s not really enough to live on except very scantily or if you have very, very, very low other costs, right? Like if you’re living at home with your parents for instance, or something like that. So one really important thing to talk about within that is, are you talking about eliminating other forms of government assistance, or adding it on? What is happening to the rest of this tax and transfer system? So somebody like Charles Murray wants to get rid of everything, including Medicare and Medicaid, just to have this, which would be regressive and a dramatic slashing of the safety net. Whereas if you added that on top of everything else the government does, it would obviously be a big extension. And then there’s also a bunch of related ideas. 

Such as?
Universal cash grants for kids or other vulnerable populations is one idea that people talk about. That’s probably one of the bigger bang-for-the-buck ideas. The United States has pretty horrifyingly high rates of child poverty for a country as rich as we are. It’s something like five times higher than in Denmark. And so that could be eliminated with a cash grant. Another is an idea called a Guaranteed Minimum Income, where basically you would use the tax code to raise everybody up to a certain level of income dependent on household size. There’s something called negative income taxes, although you could also do it through some kind of tax credit system. But that’s less transformative, right? It’s less immediate help for people but in some cases probably perhaps an improvement on what we have, just in the sense that you really would be eliminating the worst forms of poverty with that. And then there’s a lot of other varieties that people talk about. One idea, which comes from a book called The Stakeholder Society, is this idea of giving people a big [sum] – I think it’s like $50,000, but I would have to check to see the exact amount -- on their 21st birthday, and then taxing it back when they died. So that kind of a big lump sum could help you go to college or buy a house, that kind of thing. So those are just some of the options that people talk about. 

Eliminating child poverty is a very reasonable and high-benefit thing to do, and it’s really disgusting that we choose not to.

Is there one of these schemes that you favor?
In terms of what I think is best, [my] book is not very prescriptive about this sort of thing. I really go back and forth. But you know, if you’re looking at solvable policy challenges, I would say that eliminating child poverty is a very reasonable and high-benefit thing to do, and it’s really disgusting that we choose not to at the moment. So I like that one. But I also do think it’s really, really important to maintain or even increase progressivity in the system. So you need to make sure that you’re giving more help to poor people than you are to rich people. Which is something that UBI does not do naturally. But that just means that you need the support of other policies.

Speaking of progressivity, the word “universal” would suggest that you could wear a top hat and have a monocle and still receive this government stipend. Under the most commonly advocated models, everybody does receive the monthly payment, irrespective of wealth and other income, but then it’s offset by taxation of the rich. So is that really universal income, or isn’t it just wealth redistribution?  
It sounds like the question is, “At what point are you just taking money from rich people and giving it to poor people?” And one would presumably be doing that with UBI. But there is a difference, and I think it’s an important difference. So let’s take a person who’s quite high-income. Say that we have our imaginary person who’s making $200,000 a year. But we’re in a UBI scheme. So they’re given $1,000 a month and then it gets taxed back. Let’s say that it comes out of their monthly paycheck, right? And in fact, because their earnings are high enough, the additional taxes on them are actually like $1100 a month, right? So they are receiving $1,000 but they are paying $1100 in tax. On the one hand, that’s pretty much what our system does already in a lot of ways. But the difference there is that if that person goes through a traumatic life event, if they need to leave a partner, if they want to quit their job because their parent is dying, then they actually have that thousand dollars a month. It’s there. It’s a form of social insurance. And so, yes, generally the argument for giving it to everybody is so that it would be universal. It would be providing help regardless of circumstance, regardless of income. But that by using the tax system in tandem, you’re not instituting some kind of regressive regime. Because right now obviously low-income families receive vastly more help than high-income families.

But let’s stay on that point for a moment, because it seems like the perception of taking money from the rich and giving it to the poor with no strings attached is going to have difficult political repercussions. Isn’t it going to be a really tough sell to people whose hackles go up at terms like “redistribution?”
I think if you’re having the taxation argument, you’ve kind of already lost here. I mean, the government is progressive. It taxes rich people more heavily and provides in-kind services and cash transfers to the poor. That’s what it does, and it’s really important that it does that. Even the most libertarian folks I know defend doing that. And there’s actually a really strong case that the government could be more progressive, needs to be more progressive. Our tax system and transfer system has not kept up with the growth of income and wealth inequality, which is part of the reason why you’ve seen so much fragility among lower-income families. So if the question is, “Is this just a way of taking away your wealth?” Like, “Sure! Yeah. That’s the best part of what the government does.” I don’t even know why that’s even a question. That’s already what we’re doing, right? 

Our tax system and transfer system has not kept up with the growth of income and wealth inequality.

What about the moral hazard argument, the idea of my hard-earned taxes paying for somebody to get something for nothing?
The fact is, especially if you look over an individual’s lifetime, everybody pays in and everybody gets out. Even the very poorest people are still paying sales taxes. They tend to pay a lot of fees, right? Like court fees. So they're still paying in. And really rich people are still getting things out. It’s just often obscure to them. So something like a 529 college savings plan or a home mortgage interest deduction, that’s the government giving a rich person cash. It’s just administered through the tax code [and] designed in a way that it really doesn’t seem like a kind of welfare payment. But it really [is], right? There’s this idea that “giving” them more of your tax money through these breaks like the home mortgage interest deduction is somehow philosophically different than a low-income person receiving SNAP. But it’s just not true. And the system is kind of designed that way. There’s a political scientist I really like named Suzanne Mettler who did this study that showed that if you ask high-income people if they use government programs, they say no. But they all do, right? They get the home mortgage interest deduction, they use the 529 plan, you know, you name it. If you ask a low-income person, “Do you use a government program” they absolutely know. Because the social welfare programs come with a lot of stigma, they're very in-your-face, you're receiving an actual check or card. So, yeah. My response to that, is, “Yes, this is about taxing people, taxing some people and giving to others. It’s the Robin Hood effect.”

But in terms of this fear of “paying people to do nothing,” there have been pilot UBI programs in the US and in other countries. How much is that moral-hazard argument just fear-mongering and stigmatizing, and how much is it supported by the data from those programs?
We know that when you give people cash without a work requirement or without tying it to work, like the earned income tax credit, we know that there’s a reduction in work effort. But it’s a lot smaller than you might think. And when you look at who actually stops working or pulls back from work, it tends to be the parents of young children, older people who retire or partially retire a little bit earlier than they might have otherwise, young people who stay in school, and unemployed people who take longer to find a job, often improving their job [quality]. So all of those things are going to reduce GDP. They're going to reduce the employment population ratio. But I’m not sure that those are socially bad reasons to pull back on work. And yes, work is important. But I’m not sure it’s the end-all/be-all of people’s lives. And so that’s what I kind of say to people who think, “You’ve got this money, all of a sudden you’ll stop working.” Nobody is talking about giving people $5000 a month, a sum of money that really would cause people to stop working. And so there is absolutely a sum of money that you could give people that they would stop. But this is not it. And in fact, the payment would be designed in most cases to be so low as to act as a real support for people without reducing the incentive to work too much.

It sounds like there’s a gap where people might say, “Okay, I can go get a job doing X,Y or Z, but I still wouldn’t make near enough money, so it’s almost pointless. My financial demands can't be met by just going out and getting the jobs that I can get, so what’s the point?” But a UBI might give just enough to incentivize me to say, “Hey, you know what? With this, I can go out and take that job and pay for the things I need.” Is that accurate?
Yeah. Exactly. The other thing it would do is it provides people with a way to turn down really bad jobs. So if you have, say, 500 bucks a month to fall back on, you might say no to a job at $8.25 an hour with really bad hours and working conditions. So this provides more power to workers as opposed to some big income support programs we currently have like the EITC, which you only get if you’re working. But again, I’m certainly not saying that there’s no effect on work. There is. But it’s not going to cause this huge degradation of the labor force. There’s just nothing to suggest it. There’s an economist named Ioana Marinescu, who did [what] I think [is] the best survey of the evidence. And it just shows it really conclusively.

The amount of money people need to have on hand to provide a true financial buffer is really small.

Speaking of the benefits of a UBI, there must be societal, non-financial, advantages such as decreases in crime that would accrue to everyone, no matter what income bracket they’re in.
Yeah. I mean, I think about this as being a form of insurance. Social insurance. I don’t always like talking about it as kind of a welfare thing because I don’t think that’s what it is. It’s a benefit of citizenship. People sometimes describe it as a citizen’s dividend or a citizen’s benefit. And it’s a form of insurance. We know that the amount of money people need to have on hand to provide a real true financial buffer is really small. It’s often just a couple hundred bucks, to keep your car from getting repossessed, to be able to pay your landlord so that you don’t get evicted. So this would help with that. It would provide a form of financial security that we don’t have. And then I think there’s all these things that we can’t measure but might be true, right? What if you have an abusive partner? Like, what if this helps you to leave an abusive relationship? Again, that’s not a GDP assessment. Maybe it makes people happier. Maybe they're getting their wages stolen at work and this helps them just quit their job and be like, “You know what? I’m not doing this.” Maybe it makes people more entrepreneurial. Maybe it lets people do more care work. You know, a parent is dying and maybe you can take six months off. I know so few people who would be able to do that right now.  Maybe there’s more of the sense of security that something like Social Security provides. Maybe there’s less crime. So there’s all of these intangibles that I don’t think we have great data or statistical evidence on. It’s not a silver bullet, and you’re going to need many other policies to ensure that this doesn’t just get eaten away by inflation or rent, or to make sure that we’re investing in the economy in other ways. But insurance is a really powerful thing.

Still, plenty of people in the US are resistant to the idea. Is the fear of universal basic income a particularly American fear, or are there a lot of places around the world where they have the same concerns that Americans do about it?
I would say that there is a deep skepticism of welfare that is inextricable from our history of slavery and the realities of racism. It’s one of the primary reasons that we don’t have the kind of safety net that some of the social democratic countries in Europe have. It’s why we didn’t develop the same kind of programs that they did. I think that there’s just a lot more comfort in Europe with these big government safety net programs. There’s a lot more comfort with really high taxes. The US is a low-tax country by OECD standards. So, compared to the standards of other rich countries, the thing that the US does way less of is taxing and redistributive funding. If you look at pretax/pre-transfer measures of inequality, like the Gini measure, the US is actually not unusually high on those. It’s post-tax, post-transfer. We do way less to ameliorate it and way less to end poverty even among very vulnerable populations like people with disabilities and kids. And so that’s where we’re different. And I think it has to do somewhat with our sense of self-reliance, our kind of manifest destiny culture. But I think race is also a really big, important part of that.

We talked a little about some of the pilot programs that have taken place. Have any of those given way to more permanent programs?
In middle- and low-income countries, unconditional and conditional cash transfer programs are enormously popular and very important. They do tend to be means-tested, so they're aimed at poor people, but they're very big. Brazil, Mexico, Ethiopia, South Africa, all of these counties have them. They’re less controversial there, because there’s much more of an understanding that the reason that you're poor is because the country is poor. Every generation of people there has been poor up until you. So they’re really, really important. The countries tend to be way less concerned about moral hazard and getting people to stop working. It’s much more pressing to get people out of extreme poverty there. And then while there’s been a number of pilots in high-income countries, none that I know of has yet become a permanent policy change. So there were the SIME and DIME experiments in the US in the 70s, a huge set of experiments on income maintenance that were done and were kind of abandoned by the Nixon government because he had other issues. And then a big Canadian experiment which now looks like they’ll close early for political reasons. They did an experiment in Finland, which is still not over. So, yeah, no rich country has implemented UBI. No poor country has implemented UBI, but there, many have large unconditional cash transfer programs which are very UBI-like.

A lot of recent articles and discussions of UBI have centered on this idea of “Universal Basic Income: An Idea Whose Time Has Come.” Do you think that the mainstreaming of the discussion of UBI might have come out of the financial crisis, from that time you were just describing, when the government was bailing out the big automakers and the concept of too big to fail entered the mainstream lexicon? A lot of people were wondering, “Well, hey, if you do this to corporations, what about for people?”
Yeah, I think that it’s in some ways a counter-reaction to that. I’m sure you remember there was all of this concern that if you bailed out individual homeowners who were underwater on their mortgages that you would create this moral hazard and everybody would just be leaving their houses, that it would be destructive to the foundation of the economy. So here they bail out the banks, which is legitimately something you need to do during a financial crisis, but they chose not to bail out homeowners. All they would allow you to do was refinance. They wouldn’t actually do principal reduction. And there was a lot of examples of that, where there was this feeling that corporations were directly being helped, but for people, that help was more diffuse. 

Yet now we’re out of the recession, and yet UBI is as hot as ever.
I think that we’ve now had this extraordinarily long recovery, and in many ways a good one -- kind of slow, but at this point it’s advanced to a pretty good stage. Unemployment at around 4 percent. Yet people just still feel really financially fragile. I think they're looking around and they're saying, “Hey, corporations are sitting on literally trillions in capital. The stock market is doing great. So if you’re a stock owner, you’re doing great. But I still can’t pay my student loans. I don’t want to get married and have a kid because I can't imagine what would happen if I wanted to work less.” So just imagine if we tipped into another recession. And maybe it’s not even a bad recession, right? The Great Recession was an unusually awful one. People would be going into that recession in a lot of ways, on paper, in worse shape than they were coming into the Great Recession which started at the end of 2007. You look around, and the economy’s fine now, right? I’m not saying it’s not. But there’s this feeling of, okay, if this is going to keep not working for a lot of people, maybe we need some kind of more creative, athletic response. Maybe there is a failure here that we as a group of people want to step in to correct.

This is about taxing some people and giving it to others. It’s the Robin Hood effect.

And of course, all this ties into the main topic of our series, which is the Future of Work. When we spoke with Glen Hiemstra, the founder of Futurist.com, we talked a lot about the fear of automation, of the robots taking over in the workplace. How much is the current popularity of the UBI concept tied to these concerns about automation?
Quite a bit. You know, so much of the interest in this comes from Silicon Valley and from this belief that we’re [experiencing] a really epochal economic change and that that’s going to necessitate changes in how our government works and our safety nets work and our social insurance programs work. Our safety net structures are roughly modeled on the English ones. England developed its safety net programs when feudalism was giving way to capitalism and mercantilism in the Tudor era, in the 1500s. And so what happens is you have a transition where serfs are all of a sudden becoming wage employees. It leads to lots of unemployment, loss of property. And so they empowered local parishes to raise taxes and to provide welfare payments. Or work. Or orphanages. And so you know, this system comes over to the US, and that’s the roots of our system. And so I think the idea for Silicon Valley is that we are seeing capitalism give way to something else. You know, in this machine age, that we’re going through another kind of industrial revolution and it’s going to really change the nature of work and we’re going to need different policies to support people through it. 

And do you think people are right to fear massive unemployment due to automation?
You know, it’s really hard to see that in the data. Productivity is really low. Unemployment is low. So it’s not like we’re in a world of mass joblessness and where there’s a lot of hard evidence that the robots are taking all our jobs. But I do think it’s true that if that were to happen -- if you were to see the kind of particular cocktail of rising unemployment, rising productivity, rising GDP -- that would be really frightening for people. And it’s very possible that that could happen. And yeah, that’s where I think it’s going.

It’s hard to imagine what that would look like.
I think it’s worth noting that as a kind of holistic system, wage labor itself is a really ancient thing. I’m currently reading a book on ancient labor studies, and there’s evidence of wage labor among the Babylonians. But as a kind of encompassing economic reality for most people, it’s only a couple of hundred years old. Slavery is much older than that. Indentured servitude and feudal economic relationships are much older. And so, you know, it’s not crazy to [imagine that] a couple hundred years in the future, we’re going to look at this system of wage labor and be like, “Man, that was really messed up.” Like, “Man, that doesn’t really work now that the Singularity is here and we’re all living on Mars or whatever.” So it still feels pretty airy to me, but I think it’s really fascinating to think about.

It’s not a silver bullet, and you’re going to need many other policies to ensure that this doesn’t just get eaten away by inflation or rent...

That’s far into the future. Looking at the so-called Hype Cycle with regard to UBI, how do you think this conversation is going to go in this country over the next several years?
Even if UBI feels just a little bit outside of where we’re discussing things, you have a very polarized climate in which the left is being much less timid in its policymaking. You know, think about how radical it was that Barack Obama was like, “We want to have an insurance system that covers everybody.” And now it’s like, “Medicare for all, or nothing. And also, free college. And also, you know, abolishing ICE. And also a bigger EITC. And also childcare benefits. And also mandatory sick leave.” I think we’re just in a place where there’s so much of a sense of, like, “Be bold, be big, be gymnastic at the heart of the issues instead of sort of tinkering around the edges.”

Can you picture a scenario or a catalyst that would push UBI all the way forward as a serious policy consideration?
You know, there’s going to be another recession at some point, and I would be shocked if it did not come with a jobless recovery. And I would be shocked if it did not come with even more concern that a lot of average folks were never really made much better off, never really felt like they got their heads above water in this past one. And I think that that will really throw open the window, the Overton Window, to start thinking about how the government needs to be doing more. In the recovery, there was a lot of funding for states and local governments to do some creative policymaking with the recovery funding money. One of the ways they did this was through a program called TANF-EF, Temporary Assistance for Needy Families Emergency Fund. And a bunch of states and cities took some money and they used it to subsidize wages. That was a hugely successful but really tiny program that really helped a lot of people, helped unemployment rates from going higher. And while it’s dangerous to hope on Congress, which is America’s worst institution, I would hope that in a future recovery, they would maybe say, “Lets just try this, see what happens.” Do it just for kids if it feels like too much to do for parents. Because it’s hard for local governments to raise the money to do this on their own. They don’t have a federal income tax lever and they have to balance their budgets. So I think I would be excited, and I think that that’s one way that this conversation could go forward.


Annie Lowrey is a contributing editor for The Atlantic and the author of Give People Money, a book on universal basic incomes published by Crown in 2018. 

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