Exploring The Everyday is an interview series exploring interesting individuals or companies who are trying to make an impact on the lives of everyday people.
Universal Basic Income is a hot dinner party topic around the country right now. There are a lot of opinions on this topic, and we could spend forever debating the pros and cons of this potential project.
We sat down with Andrew Yang, current 2020 Presidential Candidate, who’s whole platform is based on reimagining the American economy with Universal Basic Income, to chat about the benefits of making this a national policy. On his website, he states that, “new technologies – robots, software, artificial intelligence – have already destroyed more than 4 million US jobs, and in the next 5-10 years, they will eliminate millions more. A third of all American workers are at risk of permanent unemployment.”
If elected president, his first priority would be to implement Universal Basic Income for every American adult between the ages of 18 and 64: $1,000 a month, no strings attached, paid for by a tax on the companies benefiting most from automation, like Amazon and Google.
It’s an interesting proposition, but can he convince enough people to get on board with his vision? Read his interview below and decide for yourself.
*This interview has been edited for length and clarity*
What got you intrigued with Universal Basic Income (UBI) and how do you see that fitting into the 21st century economy?
I started Venture for America back in 2011 with the goal of creating thousands of American jobs in communities around the country. I had never been to a handful of American Cities prior to starting Venture for America. We helped create several thousand jobs in cities across the country, but I realized that we were pouring water into a bathtub that has a giant hole ripped in the bottom. Technology is going to displace many more workers than it’s going to create opportunities for in the coming months and years.
Over the last several years, I’ve been reading books like Second Machine Age, and Rise of the Robots because my mission with vision of America was to create jobs because I thought I should try and figure out what the future of those jobs looks like. In many of those books, they talked about UBI as something that would be necessary down the road. Then I read a book by Andy Stern, who used to run the biggest labor union in the country, called Raising the Floor. He said the future of labor is actually no labor at all, and we’re screwed, that we need to move towards a universal basic income as fast as possible. I was really struck by this because it was no longer academics or futurists or technologists saying this. It was the head Labor guy the AFL CIO, who said, ‘yeah I spent decades arguing for Labor and it’s futile. We need to just call it and move on to something bigger and more modern’. I was like holy cow. If this guy is saying it then it really must be serious.
I had lunch with him in early 2017, right after the election and asked him, ‘what’s happening to try and make universal basic income possible in the here and now?’ He said that no one was taking it up, and this struck me as a really existential problem. During the work I’d done with Venture for America, I saw that much of the country is struggling with the current transition away from manufacturing and other industrial activities, and that’s not even the half of it.
When A.I. really takes off, we’re not just talking about truck drivers, and cashiers, and call center workers, we’re talking about accountants, lawyers, white collar professionals, radiologists, pharmacists, and on and on. What hit me hard thinking about it was, if we try and launch universal basic income too late it might be too late for society to survive. That sounds dramatic, but when you look at what’s happening around us, on average, 130 Americans die every day from an opioid overdose. Our life expectancy has declined for three straight years. One in five prime working age American men has not worked in the last twelve months, and our labor force participation rate is down to 62.9%, the same levels as El Salvador the Dominican Republic. That’s right now in 2018 and year 10 of an expansion when we’ve been plowing hundreds of billions of dollars into the capital markets to try and boost activity.
When A.I. takes off, you could be looking at a collapse of the country. Our political system is completely dysfunctional and out to lunch, it can’t wake up in another era. If you had Elon Musk and Mark Zuckerberg but also McKinsey, Bain, M.I.T. all saying that 30% of American jobs could be automated away in 12 years, which is what essentially all of those organizations are saying, you would have a national call to action at the highest possible level.
But at this point, our government is so backward, dysfunctional and unresponsive that it’s not even on the agenda. So, when you ask how I got put on to UBI, it was over a decade or so of figuring out what was happening in the economy, and in other parts of the country and just how dysfunctional our political system is. If we expect people to wake up one day and see certain red flags, we are putting ourselves at risk. The red flags are with us right now in 2018.
Why do you believe this time different? This country, and the globe, has gone through prior economic and industrial revolutions. Is it simply the rise of artificial intelligence and robotics or is there something else going on?
Well the thing that makes me 100% confident this time is different, is that our labor market is not adapting to what’s happened already. The single biggest change has been the elimination of five million manufacturing jobs over the last 15 years, 4 million of which were due to automation and new technologies. When I studied economics at Brown University, my economics textbook said that if you were to get rid of a large number of manufacturing workers they would be retrained, reskilled, they move for new opportunities, the economy would grow, and we would adapt. So, when I was researching my book, I looked into what actually happened to the manufacturing workers in Michigan, Indiana and in the South.
When workers lost their jobs, they did not behave like the textbooks said that they would. Almost half of them left the workforce and never worked again. Of the half that left the workforce, half of those filed for disability. Now there are more Americans on disability than there are Americans that work construction. Then we saw a surge in suicide rates among middle aged Americans in those facilities, and now, Americans are dying of opiates every hour which is interrelated. So, people who say ‘hey we went through this 120 years ago with the Industrial Revolution’, aren’t taking several things into account.
The first is that the Industrial Revolution itself was rife with conflict and strife where because mass protests killed dozens of people and forced billions of dollars worth of damage, we now have Labor Day. Labor unions came into being in 1886 and we implemented universal high school in 1911, in part, as a response to massive popular unrest. Now, according to Bain, this time will be three to four times faster and more vicious than the Industrial Revolution, which itself was already very difficult to adapt to. From the things that have already happened in the manufacturing sector, it is clear that our labor market is not adapting and it’s actually disintegrating, resulting in political and social dysfunction at epic levels. You see things like declining life expectancy, declining mental health, 40% of American children born to single mothers now up from 15% from when I was growing up.
If you say, ‘hey we’ve been going through this from the dawn of time’, you really aren’t paying attention to what the Industrial Revolution actually looked like at the time. If an entrepreneur were to walk into a VC firm and say ‘I’m launching something and I’m basing it on a fact pattern from a hundred twenty years ago. Here’s my growth curve for horse and buggies’ or whatever it may be, you would think they’re insane! But if someone talks about what’s happening in the economy, and they just blithely trot out ‘industrial revolution, we’ve been through this before’, that counts as an actual analysis? That infuriates me.
Driving a truck is the most common job in 29 states. There are 3.5 million truck drivers, and we’re not going to have a great set of economic opportunities that pay them anywhere close to the $46,000 a year they’re getting paid right now when the trucks are driving themselves. There are another 5 million American workers who work in truck stops, motels, and diners, that rely upon truckers stopping there. We’re still in the early innings and we are falling apart. When it gets into the heart of the transition, there are going to be unthinkable things happening in this country unless we get it together.
Let’s assume for a second that you’ve become president, and you work with Congress to enact some kind of UBI policy. How does it fit more broadly into the kind of work and economic life of everyday people?
It really would be very much an augmentation of what they’re doing right now. Very few Americans are going to quit their job and live on a thousand dollars a month. That’s below the poverty line. The poverty line is $12,490 a year./ Let’s say a server at a restaurant is making $22,000 right now. Then the government says ‘hey, great news! You’re getting $1,000 a month from the Freedom dividend that President Yang and Congress passed’, that person is going to have a choice. They could look at it several ways. One being, they could quit their job and see their pay decline by almost 50%. They’re already having trouble making ends meet now, so that’s not a great option. Or, they can keep their job and make $34,000. Maybe they cut back on one shift, maybe then they can take their kid out once a week or save a buck or two.
The problem that many people have conceptually is that they think that the Freedom Dividend is meant as a work replacement. What it’s meant as is a bridge to a new economy. People are going to be doing exactly what they’re doing right now, but they’ll have more ability to make meaningful choices. If someone’s in a truly exploitative work environment, they’ll have a much better chance of leaving. And if there are people that want to work on something creative and entrepreneurial, they’ll have a much better chance of doing so.
If you look around the country, rates of business formation and interstate migration are both at multi decade lows. Something like the Freedom Dividend would help make our labor market much more dynamic and help people move. Help people possibly seek additional training and reskilling.
There are two talking points that I find aggravating because I think they’re lazy. The first is people who say we have to educate and retrain Americans for the jobs the future. If you look at the current numbers, we’re terrible at it. Looking at an independent studies evaluation of government funded retraining programs shows that their efficacy rate tends to be between 0 and 15%. It’s a miserable experience and fewer than 10% of workers actually qualify. You’re looking at programs that might address 2% of the problem and people present it as if it’s going solve 90% of the problem. What people tend to miss with this talking point is that do they think that someone who didn’t like school 30 years ago all of a sudden is going to like going back to school, or going to be good at some coding boot camp after they’ve been sitting in a truck for 15 years? It doesn’t make any sense.
The second talking point is that people talk about the idea that we’re going to do a lot more caring work, and the work that we need more of that machines won’t do as much. So, then you have to ask, what are the economic incentives behind that? Right now, an at home health care aide makes about $25,000 a year, and the turnover rate is 100% because it’s a very draining, demanding job. It’s a physically taxing job because moving an old person to go to the bathroom is actually really difficult work.
Any of those changes would require a wholesale revolution in the way we distribute and measure value and work. And none of those things are going to happen without interventions, literally, at a trillion dollar level. There’s only one entity that can realistically make those things happen, and that’s the federal government now. This is a painful thing to acknowledge, because at this point, we have so little faith in government. We’re used to our government as this flopping, outdated bureaucracy that we all just trying to avoid while we get stuff done. If you look at the scale of the problems, you realize that we don’t have a choice but to have the government get its act together and then, not make all the decisions because that would be problematic, but at least to try and rewire the rules of the economy to give entrepreneurs and businesses a chance to solve the real problems.
If you rely upon our current market to reward and measure the value of human labor, the market is not going to care about millions of displaced cashiers, truck drivers, call center workers, fast food workers, and eventually even accountants and indebted lawyers. The “market” is going to look and say, ‘hey, I know you drove a truck for 10 years and that was great. But now we can do it much better without you’, and it doesn’t matter if that truck driver was high character or low character or hardworking or lazy, none of that stuff matters to the “market”. We need to rewrite the rules of the economy as quickly as possible, and that’s a Herculean effort. But there’s no way to do it without the government.
Some people who are critics of UBI as a of nationwide policy would make the argument that at some level, UBI reduces the incentive to work. What would you say to those critics who say UBI has the potential to disincentivize work, and work is important for human beings, beyond just the kind of economic pay that you get?
I couldn’t agree more of the fact that work is fundamental to human existence. The data indicates that men in particular deal with idleness very badly. Men tend to play a lot of video games, drink and do drugs more than employed men, and volunteer less than employed men even though they have much more time on their hands. The challenge here is to really think about what we mean by “work”. One example I use for this is that my wife is at home with our two young boys, one of whom is autistic, and she’s working much harder than I am. But the market values her work at zero or near zero and it contributes zero to GDP even though we all know that that’s a terrible gauge of what she’s doing day in and day out.
We need to create more touch points for people to be able to do “work”, but we can’t think of work in our current narrow 9:00 to 5:00, punch in punch out sense. We have to broaden it to include things that both people can do, and want to do, and also things that we need much more of. To me, the real misconception is that giving people a measure of economic freedom will somehow discourage them from working. It will actually make them much free, more able to pursue the work that they really want to do. In many instances, whether that’s starting a business, or working on a business, or caring for a loved one, or volunteering in the community, or something artistic and creative. But I couldn’t agree more that we need much more opportunities for work, and work like arrangements, throughout society.
UBI is an interesting policy where there’s actually supporters of UBI as an economic policy across the political spectrum right. There’s a libertarian argument for UBI, a progressive argument for UBI in terms of a broader social safety net. Why do you think that is? How, if at all does that impact how UBI could actually come to fruition as a as a nationwide policy the United States?
Well most people don’t realize the history that universal basic income has had in the here in the US. Thomas Paine was actually for it during the founding of the country. Martin Luther King was for it in the 60s. Milton Friedman was an economist, he signed the letter saying UBI would be great for the economy and society if Americans had a guaranteed minimum income. Alaska had a plan like this in effect for 36 years with the oil dividend. It’s wildly popular in this deep red state.
The Republican governor of Alaska in 1982 asked people of Alaska, ‘who would you rather get the money: the government, who is just going to screw it up? Or you, the people of Alaska?’, and the people of Alaska said, ‘uh us please’. So, like you said earlier, this idea defies political ideology, and because of that, I think it has the potential to not only to help push our economy and society forward, but also to help make our politics more functional.
I’ve been running for President for a number of months now, and unfortunately my estimation of our political institutions has not improved during this time. I mean, if we wait for our current political factions to solve our problems, we’ll be waiting in vain. Something like the Freedom Dividend can transcend party alignment and help reshuffle our current factionalism, to hopefully create an environment where we can solve big meaningful problems.
I’m convinced that UBI is the closest thing that we can do that would be a silver bullet to help solve our social and political dysfunction. Andy Stern said something to me that I agree with, and I think many people reading this will agree with, he said, “our government is terrible at most things, but it is excellent at sending large numbers of checks to large numbers of people”. We have to lean into one of the core competencies our government has by putting economic power into people’s hands. You would help alleviate the mindset of scarcity that is dominating American thought right now and tearing us apart.
What’s more important to you? Becoming president, or having UBI become a national policy? How does running for president impact that?
I’ve seen enough to know that nothing happens without a fight. The fact that I’m out here establishing a vision that people can get behind, is to me, a necessary step for change to happen. I think that my campaign, and universal basic income, are going to be very much tied together. But if you were to ask me, ‘how would I feel if other political candidates were to start embracing universal basic income?’, I would be thrilled. I’m running for office as an entrepreneur to solve the biggest problems of our time, and if other people get on board with my solution, then that’s victory.
I’m certainly not some narcissist who has dreamt about living in the Oval Office, living in the White House and measuring drapes. If we solve the problems of our age, and my kids don’t have to worry about the great trucking riots of 2025, then that that’s going to be cause for celebration.
You’re president in 2021, you work with Congress, we enact the freedom dividend. How do we pay for it?
The big trap we’re in right now as a society is that the companies that are going to benefit the most from big data and A.I., and autonomous vehicles, are the biggest tech companies who are great at not paying a whole lot of taxes. Google’s move is to say it all went through Ireland. “Nothing to see here”. Amazon’s move is to say it didn’t make any money this quarter. No tax was necessary. And I don’t begrudge these companies for what they’re doing, because they’re doing what their shareholders require them to do. And that’s just the way our system is structured. But it’s going to be very bad for the American people, because more and more value work is going to get sucked out of many communities, and the public’s going to see very little in return.
What we need to do, is we need to join every other advanced economy, and have a value added tax which would give the public a tiny slice of every Google search and Amazon transaction. Because our economy is now so vast, up to 19 trillion dollars, up 4 Trillion in the last 10 years alone, a value added tax would generate almost a trillion dollars in revenue. Combined with our current welfare spending on 126 welfare programs, plus all of the new tax revenue from economic growth from putting a thousand dollars into consumers hands every month, plus the cost savings in incarceration, health care, homelessness services, and the benefits from having a better educated, mentally healthier, more productive population, would be enough to pay for a thousand dollars a month for every American adult.
People who are reading this know that investing in your people in an organization is the right thing to do because if you can make them stronger, more productive, the organization benefits and performs better. In the public sphere, we take the opposite point of view where we regard people as costs. And we want to avoid paying for them or investing in them in any way possible. A prison guard in New Hampshire once said to me that we should pay people to stay out of jail because he sees just how much mammoth waste there is in the penal system. And he’s right. It’s shortsighted for us to try and treat everyone like a cost, because we end up paying for it anyway, and we pay for it in much darker, and more expensive ways. Whereas, if we regard ourselves as owners, and assets, and investments, and we invest in people, we’ll get that back, and then some.
Even conservatively, the Freedom Dividend is very affordable. If we put ourselves in position to benefit from the gains of A.I. and new technologies.
The big picture question here is let’s say by 2050 UBI is a nationwide policy. What does the daily economic life of the average American look like 10, 20, 30 years from now if all goes according to plan?
If all goes ideally after I’m president for eight years, and we build a new human centered economy with measurements that include things like environmental quality, and how much people enjoy their jobs, and mental health, and childhood success and all these other measurements, because GDP is antiquated and we need to upgrade from that. The average American would be working a little bit less than they are now, but then instead of measuring their time just like a 9 to 5 basis, they have several projects they’re engaged in in the community and they get awarded for them in different ways. That there is a greater degree of flexibility and people are thinking about ways to contribute, and there’s a much higher degree of entrepreneurship and creativity baked into the average worker’s time because they’re not as confined by demands of a job that frankly oftentimes is somewhat punishing and boring.
Many of the most punishing and boring jobs we will have eliminated due to technology that will be in position to improve people’s lives, and not be a cause of concern and stress about the future, it’ll be the reverse. So that’s the best case scenario. I do think it’s possible because we’re in a rare position where we’re now creating enough wealth where we could make the average American’s life significantly better and less stressful. If we can progress from our current mindset of scarcity to a mindset of relative abundance.
The message I would leave is that this is no longer a speculative argument. This is all immediate here and now. Some people have called me a futurist and I violently disagree with that characterization because I’m a present-ist. In twenty eighteen, all of this is happening and we need to wake up the American people and start making progress as a society. So if you want this to happen we’re going to have to make it happen together. And if anything I’ve said throughout this interview made you nod, or that you agree that that our economy is evolving in fundamental ways, visit Yang2020.com and make a contribution, tell your friend about the campaign. But we’re going to have to fight for a better version of the future, because if we sit around and wait for our politicians to figure it out we’ll be waiting forever.