The evidence is clear: in the United States the middle class is disappearing and income inequality is growing steadily. Americans in the top 1 percent average over 40 times more income than the bottom 90 percent.1 Over the last three decades wages of typical American workers have stagnated. “Between 1979 and 2007, paycheck income of the top 1 percent of U.S. earners exploded by over 256 percent. Meanwhile, the bottom 90 percent of earners have seen little change in their average income, with just a 21 percent increase from 1979 to 2015.”2
In October, Amazon raised its employees’ minimum wage to $15 per hour – a tremendous breakthrough that will positively impact 350,000 of the company’s workers. It is a bold move that we should surely celebrate.
Yet somehow the announcement loses its luster when compared to this statistic: Jeff Bezos’ net worth is 2,687,125 times the median US household income and equivalent to 0.85% of US GDP. 3 As the CEO of Amazon, Bezos’ annual salary is $81,840 – quite modest considering that in 2017 the median CEO salary was a whopping 12.1 million.4 The top five highest paid CEOs’ annual salaries range from 47.9 million to 103.2 million (the top five are all men; of the S&P 500 leaders in 2017, only 25 were women, with the highest paid woman CEO earning one third of her male counterpart, but I digress).
Bezos’ net worth comes not from his salary, but from his shares of stock. In a twelve month time period, Bezos’ net worth grew by $82.6 billion (yes that’s billion with a b). That is $19 million an hour. “Presuming his wealth creation continues at a similar pace, Bezos will “make” the annual salary of one of Amazon’s newly minted $15/hour employees every 11.5 seconds.”5
In addition to the stunningly pronounced income disparity, add to the equation the automation of millions of American jobs, which our economy is ill prepared to withstand. According to a 2017 report by McKinsey Global Institute, automation could kill 73 million U.S. jobs by 2030; that is one-third of the American workforce 6 There has not been this kind of disruption in the traditional labor model since the Industrial Revolution.
Could this disruption be the catalyst for the advent of Universal Basic Income? Andrew Yang thinks so. This former CEO, corporate attorney and Founder of the nonprofit Venture for America has declared his candidacy for President in 2020 on the platform of a “Freedom Dividend,” $1000.00 per month for every adult in America paid for by a new tax on companies benefitting most from automation. In an interview with Conscious Company magazine Yang states, “The Roosevelt Institute found that giving everyone $1,000 a month would increase buying power by more than $2 trillion per year and grow the economy by 12 percent while creating 2.5 million new jobs.”7
UBI is not meant to replace jobs, rather it acts as a transition fund that keeps people functional, while they look for another job, go back to school or start their own business.
Yang states it is the first transitional step in building a new economy and evolving to the next form of capitalism. When it comes to the objection that we can’t afford it, Yang says, “It’s ridiculous. Our economy is enormous. GDP is $19 trillion.”8 One objection Yang realizes he does have to overcome is the human mind itself. He states, “We’re programmed to see resources as scarce. This seems too good to be true, so we start searching for objections and obstacles.”9
SOME OF THE MANY BENEFITS OF UBI INCLUDE:
• It encourages people to find work
• It reduces bureaucracy
• It increases bargaining power for workers
• It increases entrepreneurship
• It improves the physical and mental health of recipients
• It helps people make smarter decisions.
• It increases art production, nonprofit work and caring for loved ones
• It improves labor market efficiency
• It improves relationships 10
UBI is not a magic bullet; for example it does not address the concentration of wealth in the top 1 percent. But it is an idea worth considering. Before you dismiss this as some crazy radical idea, know that this is by no means a new idea. Sir Thomas More advocated for it in the early 16th century. There have been many UBI supporters in the recent past including John Kenneth Galbraith, Ralph Nader, Milton Friedman, Dr. Martin Luther King, Jr. and Richard Nixon. In his 1971 State of the Union address, Nixon considered his plan to “place a floor under the income of every family with children in America” the most important item of legislation on his agenda.11 It passed the House, but not the Senate. One last thought: in case you are thinking to yourself that you don’t have to worry because you are not a truck driver, or employed in fast food or retail, think again. Yang makes it clear, “Software makes it very, very possible to automate many jobs that have previously been considered white collar… Accountants, lawyers, radiologists, pharmacists — many of these roles can be automated. I just met with a CEO of an advertising company who said that 80 percent of advertising jobs are being moved into algorithms and software.”12
One thing is for sure: we are in the midst of some of the biggest changes humanity has ever seen – on many fronts. It is up to us as global citizens to take responsibility to educate ourselves, and to get up off of the sidelines and get in the game in a way that makes sense for each of us.